Zara Article

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noopurJournal of Fashion Marketing and Management
Emerald Article: Postponement and supply chain structure: cases from the textile and apparel industry Hassan Chaudhry, George Hodge

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To cite this document: Hassan Chaudhry, George Hodge, (2012),"Postponement and supply chain structure: cases from the textile and apparel industry", Journal of Fashion Marketing and Management, Vol. 16 Iss: 1 pp. 64 - 80 Permanent link to this document: Downloaded on: 19-12-2012 References: This document contains references to 19 other documents To copy this document: This document has been downloaded 704 times since 2012. *

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Hassan Chaudhry, George Hodge, (2012),"Postponement and supply chain structure: cases from the textile and apparel industry", Journal of Fashion Marketing and Management, Vol. 16 Iss: 1 pp. 64 - 80 Hassan Chaudhry, George Hodge, (2012),"Postponement and supply chain structure: cases from the textile and apparel industry", Journal of Fashion Marketing and Management, Vol. 16 Iss: 1 pp. 64 - 80 Hassan Chaudhry, George Hodge, (2012),"Postponement and supply chain structure: cases from the textile and apparel industry", Journal of Fashion Marketing and Management, Vol. 16 Iss: 1 pp. 64 - 80

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...Introduction: In 1975, Zara was founded by Amancio Ortega who is still their largest shareholder and wealthiest man in Spain. Ortega started in 1963 with clothing factories and expanded over time to retail and manufacturing. He believed that all functions should be linked in the apparel industry because consumer demand was very difficult to forecast. In 1985, two important events occurred. The first was the formation of a holding company for Zara and the other retail chains. The second key event was that Jose Maria Castellano Rios joined the company as their IT manager and shared Ortega belief’s that computers were critically important in enabling the type of business they were looking to build. Castellano became Inditex’s CEO in 1997. In addition to believing in the importance of computers, Ortegano and Castellano agreed on two other topics regarding the company: Zara must respond quickly to the needs of their customers and the two and other senior managers must leverage the intelligence and trust the judgment of the employees throughout the company, which is why stores were given the freedom to order what they thought they would be able to sell. Inditex operates 1,558 stores in 45 countries out of which 550 stores are a part of Zara chain and generates 73.3% of Inditex’s sales. Zara offers a large array of new style clothes for Men, Women, and Children couples with moderate price point. Women’s clothing accounts for 60% of Zara’s revenue. Zara has developed the......

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...ZARA COMPANY PROFILE Zara is a Spanish clothing and accessories retailer based in Arteixo, Galicia, and founded in 1975 byAmancio Ortega and Rosalía Mera. It is the flagship chain store of the Inditex group, The world's largest apparel retailer, the fashion group also owns brands such as Massimo Dutti, Pull and Bear, Uterqüe, Stradivarius and Bershka. It is claimed that Zara needs just two weeks to develop a new product and get it to stores, compared to the six-month industry average, and launches around 10,000 new designs each year. Zara has resisted the industry-wide trend towards transferring fast fashion production to low-cost countries. Perhaps its most unusual strategy was its policy of zero advertising; the company preferred to invest a percentage of revenues in opening new stores instead. This has increased the idea of Zara as a "fashion imitator" company and low cost products. Lack of advertisement is also in contrast to direct competitors such as Uniqlo and United Colors of Benetton. Zara was described by Louis Vuitton Fashion Director Daniel Piette as "possibly the most innovative and devastating retailer in the world." Zara has also been described as a "Spanish success story" by CNN. Amancio Ortega opened the first Zara store in 1975 in a central street in downtown La Coruña, Galicia, Spain.[4] Ortega named his store Zorba after watching the classic film Zorba the Greek, but apparently there was a bar that was called the same, Zorba, two blocks away, and...

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...ZARA: Fashion Follower, Industry Leader Business of Fashion Case Study Competition Amanda Craig, Charlese Jones and Martha Nieto Philadelphia University April 2, 2004 ZARA: Fashion Follower, Industry Leader Table of Contents Introduction………………………………………………………………….1 Financial Analysis and Comparison…………………………………………………….…………....1 Strategic Advantages………………………………………………………………...2-3 Strategic Drawbacks…………………………………………………………….….. 3-4 Possibilities for Failure…………………………………………………………………....…..4 Recommendations/Conclusion………………………………………………5 Calculations and Financial Statements……………………………………….……………….Appendix A Articles: The Recent Status of ZARA.……………………………………….…………………...Appendix B Works Cited Works Referenced The global apparel market is a consumer-driven industry. Also, globalization and new technologies have allowed consumers to have more access to fashion. As a result, consumers are changing, competition is fierce, and companies are evolving to meet these demands. Zara, a Spanish-based chain owned by Inditex, is a retailer who has taken a new approach in the industry. With their unique strategy, Zara has the competitive advantage to be sustainable. In order to maintain that advantage and growth they must confront certain challenges that face traditional retailers in the apparel industry. Financial Analysis and Comparison To prove Zara has the prospect of sustainable growth in the international apparel market, it is important to understand and compare the financial......

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...ZARA Discussion Question 1: Why does Zara's business model appear to be better adapted to the recession than Gap's? Why and how does Zara's business model make it more resilient to business cycles? Zara’s business model is better adapted to the recession than Gap’s because of its lean inventory system. Firstly, the lean system allows Zara to offer a much more up to date line of fashions. With its lean inventory and its fast and effective logistics system, Zara is able to avoid the profit damaging markdowns that Gap constantly battles with due to its high inventories. Gap struggles in this aspect since they have large inventories and are forced to store much of their inventory in warehouses. This forces Gap to offer generic products that are less susceptible to changes in customer demands. The lean system that Zara practices also enables the company to quickly and easily adjust to seasonal fads and fashions that continuously occur in this industry. From the article it sounds like Zara practices an international strategy. Zara focuses on centralizing its core activity of providing the most up to date fashions at a low cost, and decentralizing its operation. Zara has effective mechanisms for diffusion and adaptation, which are the required assets and capabilities for this strategy. Discussion Question 2: By the same token, what kinds of business conditions might expose hidden weaknesses in Zara's business model? The article mentions the issue of Zara's complexity....

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...THE CASE OF ZARA: PLANNING AND STRATEGIC CONTROL Alexandra Iacob University of Huelva HUELVA, SPAIN 2015 Abstract Zara is a retail company belonging to the Spanish company Inditex Group. Currently, Zara has 1,808 stores in 86 countries. This paper will analyse Zara’s business model, based on innovation and flexibility, as well as logistics chain and the various tools used to recognize the continuous changes in fashion trends and turn them into a product marketable within a few weeks. Compared with the competition, Zara has three distinctions: vertical integration to achieve a faster turnaround time; rapid expansion; and use of the store as the main tool for promotion, with low spend on advertising. This company offered a product design and quality, low price. In addition, resources and competences have allowed develop a different business model, where all processes from product design, to manufacturing, distribution and sales are carried out within the same organization. Key words: Strategic Management, Strategy, External Environment, Michael Porter’s Generic Strategies, Vertical Integration, Balanced Scorecard, Globalization Culture Introduction Company Background Four letters that make up a fashion brand known around the world. Zara is a Spanish brand of clothing and accessories and the foundation of Inditex’s success as well as their first retail format. Inditex S.A. is a Spanish multinational group of textile manufacturing and distribution established in 1975 in...

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... Sunder       Elements  of  Dynamic   Capabilities  of   ZARA                                 Prepared  by,   Ashis  Lamba  (005EPGP2014)   Bhupender  Singh  (007EPGP2014)   Chandan  Singh  (008EPGP2014)   The   success   of   Zara   in   the   fast   changing   fashion   industry   relies   on   its   core   capability   in   responsiveness   to   customers,   which   in   turn   is   derived   from   a   bundle   of   capabilities   including   swift   copy   of   current   designs   in   fashion,   advanced   information   systems,   just-­‐in-­‐ time   production   and   shop-­‐floor   led   stock   control   that   combine   together   for   success.   Therefore,   the   emphasis   of   dynamic   capabilities   is   on   the   ‘integration’   of   resources   and   capabilities   in   light   of   a   firm’s   strategic   direction.     Here   in   this   article   we   try   to   analyze   elements  of  dynamic  capabilities  of  Zara  as  we  go  through  its  various  functions.   Zara  Business  Model     The  dynamic  capability ......

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...Title of the Report: Zara Case Study Report Name: SeJun Lee Executive Summary Zara is one of the largest international fashion companies in the world, and it belongs to Inditex, one of the world‟s largest distribution groups. This study reviews Zara`s external environment and analyses its internal organisation to make recommendations for improving its core competencies against competitors such as H&M and GAP. This study first reviews the Zara enterprise in terms of PEEST environmental factors, Porter‟s Five Forces and the fast fashion industry life cycle (ILC). The liberalisation of European Union import quotas has had a positive political impact on the fast fashion retail industry. However, rapid style changes generate waste. In addition, recent financial crises have made customers more sensitive to price and tending to buy lower priced goods. However, young people and new Asian customers are more attracted to fashionable clothes. Also, new technology is quickly adopted to survive in a fast-moving market. Using Porter‟s competitive analysis of five forces, the threats of new entrants and substitution are low, and customers‟ and suppliers‟ bargaining power are moderate. However, the intensity of competitive rivalry is quite high because similar fashion firms are competing. Fast fashion has a shorter life cycle for products than most industries. This spurs both creativity and product innovation but demands more efficiency and advanced technology......

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Zara's largest fashion retailers by owning eight brands - Zara, Pull & Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home and Uterque. There are over 6,700 stores worldwide. It is started as textiles maker by Amancio Ortega Gaona in a small workshop back in 1963. After 12 years, Inditex is official a dressmaker when the first Zara store is established in 1975, located in La Coruña, Spain. The main goal of Inditex is to offer highest quality products to all its customers. All Inditex processes are following their code of conduct where 4 main principle is applied. There are clear to wear and safe to wear, tested to wear, green to wear and right to wear. These are the foundations of the Group's environmental and sustainable strategy. To ensure the stability of the global operation, Inditex has 11 logistics centre for each of the brands to make sure the merchandise are distributed twice a week. There are new designs are coming out once a fortnight in Inditex. It is also one of the company that practicing fast fashion. In 2014, the net profit of Inditex had grown 5 percent to 2.5 billion euro (Spain. Inditex S.A.,2014). Inditex is maintaining the aggressive strategy in 2015. Alexander's (2015) article indicates that, Ortega's net worth hit $80 billion as stock in his holding company Industria de Diseno Textil (Inditex) reached an all-time high of 33.99 Euros per share. As mentioned above, the first Zara store is opened in La Coruña in 1975. In 2014, 64% of......

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...1.0 Introduction: Zara is the flagship chain store of Inditex group which is owned by Spanish tycoon Amancio Ortega. It’s a Spanish based company essentially known for its clothing and accessories which was founded in 1975 (Mo, 2015). Zara believes in following the fast fashion policy, unlike its competitors. The discipline in Zara’s supply chain management has played vital role in its success (Anonymous, 2005). Zara follows vertical integrated strategy where it has total control of number of business activities such as manufacturing, sourcing, and distribution and retail stores, it allows the organization to accomplish greater flexibility, less stock and fashion risk. The main object of this report is to analyse Zara’s current supply chain and to propose suggestions for their central distribution and alternate solutions for their logistics management costs and their labour cost. 2.0 Zara’s Supply Chain Management 3.1 Supply Chain: Zara is the biggest and most successful chain of Inditex, the design and production is situated in La Coruna in Spain. In order for Zara stores to be able to offer front line style at moderate costs requires the firm to apply a solid impact over the whole supply chain network which incorporates design, purchasing, production, distribution and retailing. Zara utilizes its quick supply chain management to offer the most recent style outlines accessible in stores only fifteen days......

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...does Zara employ? List all the benefits that Zara receives by having adopted this system. Zara employs a Corporate Vertical Marketing System. Zara has managed to build a system that is controlled from a single place and that it allows it for quick response, decision and problem solving. Because Zara’s parent company Inditex owns most of the resources needed for the process of clothing design, production and distribution it is able to “control most every aspect of the supply chain, from design and production to its own worldwide distribution network” (Armstrong & Kotler). Vertical Marketing System Introduction In an organization, effective marketing strategies play an important role in boosting the performance of the business. In the integration of the corporate leaders in pursuit of their financial objectives, the creation of marketing system has been established. The creation of vertical marketing system is introduced and defined as a distributing channel in which the manufacturer, wholesaler, and retailer act as a single system. An organization that can control the product and services until it reached to the end consumers is the plain example of vertical marketing system. Apparently only few of the businesses around the world successfully managed this type of system. It may define as a difficult approach to maintain the sales and effectiveness but it serves as the strongest point of the organization to boost the various areas within the organization. Zara......

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...Personal Website on Marketing Issues Sunday, December 28, 2008 Zara operation management, A business case! 1- Executive Summary Operations management is in regard to all operations within the organization related activities including managing purchases, inventory control, quality control, storage and logistics. A great deal of focus is on efficiency and effectiveness of such processes. An example of successful operations management in retail sector is obvious in Zara business model which is elaborated and discussed here by a team of MBA Strathclyde students. From one shop in La Coruña, the Zara empire has expanded to more 50 countries. While other giants in the business squeeze their profit margins by manufacturing in bulk and lowering prices, Zara understood that most of the customers are willing to pay for clothes if they feel they are getting exclusive and fashionable clothes. The company can design, manufacture and get a piece of clothing on the shelves in almost two weeks. This rapid supply chain allows Zara's copies to be in their stores before designers even have them in theirs. In summary, Zara has closed the loop from manufacturing to customers’ hands. They are obsessive about control. Mr. Ortega the CEO of the Inditex, the parent company of Zara, once said that the secret to retail success is to 'have five fingers touching the factory and five touching the customer'. 2 - Introduction Zara is the flagship brand of the Spanish retail group,......

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...Number | Contents | Page | 1. | Introduction to ZaraHistory & Company BackgroundCompany Profile | 23 | 2. | Case Summary : ZARA The technology Giant of the Fashion World | 7 | 3. | Discussion: Question 1Question 2Question 3Question 4Question 5Question 6 | 899101010 | 4. | Conclusion | 11 | 5. | Reference list | 11 | History and Background of Zara Marked as the first prestigious venture of the Inditex group the first store of Zara, the chain of Spanish fashion stores came into reality on central A Coruña Street in 1975. In 1985, Amancio Ortega integrated Zara in a new holding company, Industria de Diseño Textil, INDITEX S.A. The Zara fashion concept was well received by the public later in 1976, allowing it to expand its network of stores to the other main Spanish cities. During 1981-1988 with the growing popularity Zara started new ventures by multiplying in number not just in Spain but around the world. Today Zara is present in 73 countries, with a network of more than 1,540 stores, ideally located in major cities. Its international presence clearly shows that national frontiers are no impediment to sharing a single fashion culture (, 2011). Today Zara is the largest and most internationalized of the six retailers that Inditex owns which are Zara, Massimo Dutti, Pull & Bear, Bershka, Stradivarius, and Oysho (, 2011). The role of the corporate centre at Inditex’s headquarters is that of a “strategic controller”......

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