Zara is a successful international retailer which, in less than 30 years, has transformed itself from a Spanish local brand into a truly global brand. We will be discussing Zara’s internationalisation process with a special focus on the factors that contribute to its reputation in the retail industry. Zara is one of the world’s most successful fashion retailers operating in 93 countries, owning 90% of those stores. Zara operates a vertical integrated strategy, to follow this strategy companies are required to have a high amount of control from their headquarters. Zara has a proven integrated materials management system.
They must be able to understand the similarities and the differences of customers from strict cultures and liberal cultures. At the same time, Zara take in consideration the industry analysis the most compelling evidence, Zara adopted a strategy that helped the company to survive in this competitive industry is the fact that Zara is a vertically integrated retailer. It controls most of the steps of the production designing, manufacturing, and distributing. This tactic allow the company’s self-containment throughout the stages of materials, manufacture, product completion and distribution to all of its stones with locations around the worlds, in a very short period time. Other strategy Zara used after reading the industry analysis is diversification.
FURTHERMORE : THE way that Zara creates value to its customers is by pricing clothes differently depending on the location. The cost of clothing from Zara is cheaper in Europe and more expensive in Asia and North America because the North American and Asian countries are able to afford the latest clothing designs compared to
this in turn gives then the best advantageous to lead the relative market and industry and emerging as the leader in fashions Conclusion The Discount of Zara is about 18% of its total operation range, where half of the level its competitors as Zara operates with decent level of sharing data and integration between retailers, manufacturer and third party researchers as essentials & also Zara has an effective way of aligning right supply chain strategy is to match product uncertainty. Postponement strategy can considerably reduce inaccurate forecast risk and do a responsive supply chain strategy. The marketing officials of ZARA are very well trained and experienced and doing their best to generate 100% results as well. ALSO Over all the main strategy of ZARA as they don’t depend on others but do all expertise by themselves only so they are unique in the science that they are all in all and getting maximum competitive advantages.
The company has a short time frame within which an idea is implemented. For instance, Zara designers may conceive a particular design that may seem fashionable at the current time and ensure that clothes are within the retail outlets within ten days. The speed of innovation and invention favors the versatile customers who love moving with the fashion trends. Zara, however, ensures that it releases few clothes to test the market thus saving the company on huge inventory costs that would lead from a dead stock. Notably, Zara has shied away from the top-down decision-making approach because the company understands that the employees are more inclined to understand the consumer trends.
Quality is the most important performance factor for Zara Because this company is literally focused from the beginning on delivering the best brands with the best quality for their customer in KSA. So the customers of this company can easily judge the operation of Zara . If Zara met the customers' expectations then they have achieved a competitive advantage , and this quality will affect the internal product of Zara by reducing their cost and by increasing their dependability. Reducing cost : It means that the Zara company is making less mistakes therefore they will need less time for correcting the mistakes and this will reduce the cost of their operation . Increasing dependability: If there is less mistake because of the the good
(Ferdows & co. 2014 p8) Zara also works hand in hand with over 1600 worldwide suppliers (a third from Eastern Europe, i.e. Bulgaria, Turkey, Romania, and the rest from Asia.) Those suppliers appear to have an essential role, and therefore be of extreme importance in preserving the very flexible, and fast supply chain. Most supplier prefer working with Zara, as they are a stable provider of considerate orders. Mr. Alvarez highlighted the importance of trust, and understanding between supplier and Zara, he explained that Zara tries to remain loyal to its supplier as long as good products are delivered, and timing is respected.
Zara’s relationship with customers. Zara created and maintained a good relationship with the customers. This was through manufacturing clothes that meets the demand, the clothes were delivered on time and at an affordable price of about $27 (Gallaugher, 2010) and shipped very fast to the stores. The company also engaged the customers in product design by asking them questions regarding color, length of clothes among others. As Azhari Osman pointed out during the discussion, technology played a cardinal role in establishing and maintaining customer relationship.
In terms of differentiation, ZARA’s “fast fashion” philosophy is unique, which create demands and lead the trend in the garment market. They respond very quickly to the demands of target customers and focus on young fashion. In production, they design quickly, production quickly and update quickly. They are always the fastest compared with their competitors. In cost leadership aspect, ZARA conducts little advertising and vertically integrated manufacturing operation and distribution system based on information system.