This chapter discusses basic supply chain and operations strategies. With such fast paced production, expeditous inventory management, and social media networks that are exploding with followers, zara has been able to successfully develop an internal and profitable supply chain strategy like no other. Synergy between business and operations strategy zara s strategy is growth through diversification with both horizontal and vertical integration. Zaras strategic capabilities and value chain analysis. Rethinking their supply chain strategy, zara will face.
Details of the constituents of an operations strategy are explored in more detail in chapters 5 through 14. The analysis and recommendations of zara s strategic plan strategic position is concept which is concerned with the impact on the strategy of the internal resources as well as competences, external environment as well as the influence and expectations of the stakeholders. In consideration of optimizing development and training costs, the current pricing strategy is suitable for zara. Strategic analysis pulling together both the external and internal factors impacting on zara as an organisation, it is then possible to establish a strategic plan for the future, in order to ensure the ongoing success of this substantial fashion retailer. Zaras product development capabilities are essential to zaras business strategy and future success.
Zaras strategy with choosing where to put stores is to identify highstreet retail areas in major metropolises. Operations management of inditex and its retail zara. Later, in 2007, the first online store was launched to sell zara home products inditex, 2012. To do this, it will be used the operation strategy matrix, that defines on the vertical side the performance objectives of the company and on the horizontal side the different areas in which decisions can be made. Subsequently, efficient and responsive supply chain strategies are distinguished. Kohan, based on the 4es model of marketing, where experience replaces product, exchange in new price, evangelism is now. Conflicts more capacity variety cost meeting targets better forecasts economical operations other strategic criteria. Doc zaras operations strategy wilbert makori academia. Oct 14, 20 zaras business success with its flexible approach is demonstrated in its stock market success as well. Mar 23, 2012 the company reports that not only did it seek out prime real estate along established shopping corridors hello zara flagship on fifth avenue in nyc, it also changed up its retail strategy to.
It offers jeans, trousers, tops, skirts, knitwear, tshirts, shoes, bags and accessories. Another aspect, the business strategy should focus on those opportunities that provide them with a long term competitive advantage bethel, 2016. Responsive strategies of zara improve the efficiency of information exchange in every level of supply chain those are customers, store managers, designers and market specialists. Zara s fast fashion operation obliges its inhouse design and production teams to work with a limited set of preselected fabrics and materials. Zara uses operations research to reengineer its global mit. Such is the craze of this brand among the fashion enthusiasts. The authors analyzed the stock performance of zara, the gap, and limited brands. Is it only zara s fast fashion approach, or a combination of retail strategy and fast fashion thats driving growth in the country. It provides the basic information of these organizations and how the operation strategy. Marketing mix of zara zara marketing mix and 4 ps of zara brand. Configurations of manufacturing strategy, business. Cons business strategy of zara general information pros core compentencies of zara low quality minimal advertisement low in store inventory attractive prices up. Operations strategies drive a companys operations, the part of the business that produces and distributes goods and services.
Zara s procurement team doesnt work on the number of finished clothes but on the quantity of raw materials needed to manufacture the clothes. How retailers use emotion to make you spend more cnbc. Threat of climate change from fast fashion is heating up. Fast fashionzara final version free download as powerpoint presentation. Zaras quick response capacity is made possible by the fact that it controls the 3 main stages of its operations that define the competitive edge of the company. Understanding internationalization patterns of zara. Here, we will discuss the strategic implementations of zara under the context of porter.
This will provide a plan for the design and management of the operations function in ways that support the business strategy. Fast fashionzara final version strategic management. With limiting their production of their inventory items, zara reduces their risk of stockpiling unwanted clothes. This strategy minimizes zara s total cost because it reduces the percentage of markdown merchandise compared to its competitor. Another marketing strategy of zara is focuscost strategy 3. No other european retailer has expanded so quickly and so successfully beyond its own borders. This will include specifically focusing on zara and its business operations to comprehend the strategies that inditex has employed to separate it from its competitors in the fast fashion industry. Fast new product design is a key enabler of zara s strategy. Threat of climate change from fast fashion is heating up by consuelo williams.
The company has laid out a strategic environmental sustainability plan 20162020 with elements to improve reduction of ghg emissions listed below 2. Operations strategy, 2nd edn, financial times prentice hall, harlow. Pdf this chapter discusses basic supply chain and operations strategies. Even through zara adopted alternative market entry modes such as joint ventures or franchises, the dependency on zaras centralized system ensures that zara can appropriate the most significant portion of available rents from their markets. For the full body shape woman target consumer, zara brand name is the fashion expert brand character for your wardrobe productcompetitive frame that helps you look the best you can brand promise because it takes the high fashion trends and adapts them for the real you supportadvertising positioning statement for zara. Operations strategy underlies overall business strategy, and both are critical for a company to compete in an everchanging market. Zara, basics have increased from less than 20% in the late 90s to 40% or more nowadays. Aug 04, 2017 a case study analysis of zaras operations strategy zara is the largest division and flagship brand of the spanish retail group inditex 1. Oct 26, 2015 zara controls most of the stages on the chain supplying, designing, manufacturing, and distributing its products 2.
The objective of this presentation is to obtain board approval on the proposed operational strategy for gap and any possible changes to the recommendations and conclusions drawn by the executive team. Comparison of the operation strategy of the organizations. Business strategy of fast fashion a case study of zara. Inditex, the parent company of the brand zara have a strong portfolio of 8 brands which is helping the company in nurturing each brand with its experience and strong financial base. A framework for operations strategy how operations can be used for competitive advantage in todays world. An indepth case approach is adopted based on extensive secondary research. Operations management is in regard to all operations within the organization responsible for creating goods and services that organizations pass to. Zara has followed an optimal combination of all these. Analysis and recommendations of zaras strategic plan bartleby. Zara s success is as much a result of its history and location, as of its counterintuitive business strategies. Pdf analysis of the keys to zaras inditex successful business. Zara s strategic capabilities and value chain analysis please read this carefully first the intended purpose of our research papers is that they are used as models to assist in the preparation of your own research papers. Operation zara dan ikea case operations strategy of zara.
A case study analysis of zaras operations strategy. Zara strategic plan 2015 by grisell rodriguez on prezi. A framework for operations strategy mit opencourseware. Pulling together both the external and internal factors impacting on zara as an organisation, it is then possible to establish a strategic plan for the future, in order to ensure the ongoing success of this substantial fashion retailer. Therefore, the strategy of fast fashion make zara successful and their operation management and supply chain are. Next to zara, the rest of the labels the groups own are bershka, massimo dutti, pull and bear, stradivarius, oysho, zara home, zara kinds and uterque. Therefore, the strategy of fast fashion make zara successful and their operation management and supply chain are their competitive advantages. Michael porter, a harvard economist, suggests that there are. An example of successful operations strategy in the retail industry is the strategy employed by zara which is discussed in this critique. Zara is the basis of inditexs success and their first retail format established in 1975 and the brand is the generator of about twothirds of the entire groups sales by offering fashion products that are trendy. A case study analysis of zaras operations strategy zara is the largest division and flagship brand of the spanish retail group inditex 1. The objective of this paper is to analyze and evaluate the operations strategy of zara. This strategy is embraced to focus on the operations which can enhance cost efficiency while boosting service delivery and value proposition.
After 38 years of operation, zara now has 1,830 stores in 82 countries across europe, america, africa, and asia. Strategic partnerships and cost of production in comparison to competitors, zaras business strategy, in regards to strategic partnerships and cost of production, provide for a strategic competitive advantage. Feb 10, 2017 thank you for watching, hope you guys enjoy it. The adoption of case study evaluation is highly suitable to find out to identify the implications of supply chain implications in global sourcing strategy of zara. In the first part, operations strategies as well as the strategic fit are discussed.
Doc the strategic management analysis of zara relative. Once a business strategy has been developed, an operations strategy must be formulated. Zara positions its goods as highend products with low price. You wont find a zara next to walmart, but more likely near higher end fashion retailers. Configurations of manufacturing strategy, business strategy, environment and structure peter t. To implement its sc strategy, zara redesigned its inventory. We neither endorse nor tolerate any form of plagiarism. Operation strategy of coca cola 2990 words bartleby.
Zara is a spanish fashion chain stores, which is one of the largest international fashion brands of inditex. Ideas inspired by urban hot spots, fashion shows, and store customers are transmitted to the creative teams. Pdf inditex is the largest fashion distributor and retailer in the world, with eight. The key to zara s ability to establish an agile supply chain rests on the following unique approaches. May 02, 2016 zaras pricing strategy not only the value proposition is evident, but also is affordable to most customers.
Challenges and recommendations louna sbou term paper business economics business management, corporate governance publish your bachelors or masters thesis, dissertation, term paper or essay. The intent of the meeting was to discuss zara s current strategy and. Zara is the groups most geographically diverse retail concept with 80% of its full line stores located outside of spain. Pdf operations and supply chain strategy researchgate. A case study analysis of zaras operations strategy uk essays.
Highlight what are the strengths, weaknesses, opportunities, threats of zara. A case study on zaras operation management strategy 1 mohammed mansur. Keywords supply chain management, agile supply chain, zara case study. One of the major strength of the company is that it is able to respond very quickly to the changing needs of the customers. Zara s case study zara is a fashion label and fashion chain stores established in 1975 by the spanish group inditex own by amancio ortega. The product strategy and mix in zara marketing strategy can be explained as follows. Its as if by proxy, some of that high fashion rubs off on zara, though the prices are much more affordable for its audience. Marketing strategy of zara zara marketing strategy. The study is thoroughly checked for internal validity with a proper balance in the structure of design and adoption of appropriate research instruments. Explain the target market and active customers of zara focus on the potential customers value proposition and the reasons why people prefer zara. Jun 08, 2016 how retailers use emotion to make you spend more. How zaras winning strategy is disrupting the indian. Utilizing zara s strong brand image, zara home was introduced in 2003, providing housewares.
This presentation covers the main characteristics of zara, a general view of fast fashion indystry, porters five forces analysis, competitors external environment as well as a complete internal analysis regarding. It starts with an introductory casestudy considering supply chain strategies in the apparel industry. Uniqlo operations fashionable and highquality clothes that anyone can wear anywhere, any time thats what uniqlo is all about. Here is my report, the strategy of zara, which you asked for on july 12, 20. This study analyzes the business strategy of fast fashion through zara, a successful fashion brand from inditex spain. Zaras power is not easily duplicated as they control a significant portion of the value chain. Rethinking their supply chain strategy, zara will face three.
Oct 02, 2016 zara is a spanish fashion chain stores, which is one of the largest international fashion brands of inditex. To distribute merchandise to its stores, zara uses a supply chain consisting of two. While it may not be possible for another company to exactly duplicate the conditions under which zara flourished, one can certainly learn from its experiences, and its business structures. Business strategy of zara core competencies are resources and capabilities that create the firms competitive advantage. Analysis of zara s fastfashion retailing strategy with fit shelley e. The present essay deals with the operations management of zara. Various authors in operations literature have used different terms to describe such manufacturing capabilities, although they have most often been referred. Ideas inspired by urban hot spots, fashion shows, and store. Zara is a wellrenowned name in the field of clothes and accessories, all across the world. Business strategy communicates the competitive nature of the business, from who they should serve, what needs should be met, and development of the organizations core competencies parnell, 2014. Process view supply, technology, demand, and innovation 9 ardavan asefvaziri jan1011 zaras operations strategy fast product design.
Supply chain strategy think of the supply chain strategy as a bridge between business strategy and sc operations. The magic of zara has much to do with its tight supply chain, doiron. This detailed case study will provide the complete knowledge of operation management and its criterias. Zara has used almost a zero advertising and endorsement policy throughout its entire existence, preferring to invest a percentage of its revenues in opening new stores instead. The third marketing strategy of zara is positioning strategy 4. The strategic management analysis of zara relative to the case in developing countries. Zaras business operations and strategy how and why it. Zaras secret to success retail its pricing strategy t1.
Rethinking their supply chain strategy, zara will face three challenges challenge 1 understand zaras current supply chain strategy challenge 3 craft a future. Marketing, operations and general management department. As we all know, the global apparel market is a consumerdriven industry. The top section of the fashion triangle corresponds to the true fashion products. It means zara opens its first few stores in a country to get an understanding of a market and. Also, globalization and new technologies have allowed consumers to have more access to fashion.
Luxury brands have to admit zara has a strong position in the global market. Mar 18, 2016 the products of mango are also similar to zaras in style, pricing and quality, however, mango is very different from zara in organizational strategy as mango is based on a franchising system, and in marketing strategy, relying heavily on advertising campaigns. Supply chain operations sco manages three clear aspects. Strategic plan 2015 presented by grisell rodriguez conclusion this strategic plan expresses zaras continued commitment to its mission and vision, to give the customer an exclusive choice of fashion by providing a quicker turnover of new stock than other fashion retailers. Sep 02, 2018 competitive advantage in the marketing strategy of zara strong parent company.
It is a popular fashion designing and manufacturing company, which has been declared as the most efficient market responding enterprise. In addition explain the external benefits of these five objectives. Zara is one of the leading luxury fashion labels in the world. Zaras successful supply chain management strategy social. The primary aim of a business in the competitive business environment, underpinning its goals and objectives of sustenance and growth, is to develop an edge over rival firms building on its resources and competencies.
32 326 1071 191 1622 1193 845 395 984 5 470 1530 1006 737 800 1351 889 460 676 839 1634 1171 187 40 632 621 375 274 1228 861 220 172