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Competitive Advantage Of Zara's Success

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An advantage that firms has over its competitors, allowing it to generate greater sales or margins and/or retain more customers than its competition. There can be many types of competitive advantages including the firm 's cost structure, product offerings, distribution network and customer support (Jay Barney 1991). It is very crucial for a firm to have sustainable competitive advantage for long term growth. A firms capabilities and internal resources are the main sources of competitive advantage. In order for a business to stand above the rest of its competition, it’s important that they develop a strong business model. Without a strong business model, companies fail to gain market share and fall behind. A business model that stands out compared to the rest of the competition will also gain more market share as they are operating differently then the rest of the companies.
Zara, is one of the largest international fashion companies. It belongs to Inditex, one of the world’s largest distribution groups. While Zara originated in Spain, it has stores in 86 countries today - in Europe, the Americas, the Middle East, and Asia. In 2012, Inditex reported total sales of US$20.7 billion, with Zara representing 66 percent of total sales (US$13.6 billion). The brand is renowned for it’s ability to deliver new clothes to stores quickly …show more content…

Firstly, Zara stocks clothing in scanty quantities. When a clothing design runs out, it runs out. They don’t order more stock in. “They’ve trained consumers not to wait for it to go on sale,” says Don Huber. (Bryan September 06, 2012). Secondly, Zara’s factories are based in Europe, so new designs can get into stores in as little as two weeks. Other retailers are faced with the disadvantage of having their products shipped from China and facing a lag time of more than two

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