ZARA -

A Case Write-up

Submitted by Saurabh Sao, MBA 2014-16, Jindal Global Business School.

BUSINESS OVERVIEW
ZARA is a Spanish clothing and accessories retailer based in Arteixo,
Galicia. Founded in 24 May, 1975 by Amancio Ortega and Rosala Mera.
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 11,000
new designs each year.
Zara was described by Louis Vuitton Fashion Director Daniel Piette as
"possibly the most innovative and devastating retailer in the world. Zara
has over 2,100 stores strategically located in leading cities across 88
countries. Zara's designers and customers are inextricably linked.
Specialist teams receive constant feedback on the decisions its customers
are making at every Zara store. Zara's approach to design is closely linked
to their customers. This feedback inspires Zara's creative team which is
made up of over 200 professionals.
Zara has continually maintain its mission to provide fast and affordable
fashionable items. Inditex (Industria de Diseo Textil) of Spain, the owner
of Zara and five other apparel retailing chains, continued a trajectory of
rapid, profitable growth by posting net income of 340 million on
revenues of 3,250 million in its fiscal year 2001.
Around the world:
Zara
Pull & Bear
Bershka
Oysho
Uterqe
Zara Kids
Massimo Dutti
Stradivarius
Zara Home
TOTAL

1.763
817
899
529
91
171
630
794
364
6.058

Inditex is a global specialty retailer that designs, manufactures, and sells

apparel, footwear, and accessories for women, men and children through
its chains around the world. Zara is the largest and most internationalized
of the six retailers that Inditex owns. By the end of 2001, Zara operated
507 stores around the world, including Spain.
Competitors of inditex:

Gap, H&M and Benetton are considered Inditex's three closest comparable
international competitors. Zara, is relatively perceived as more
fashionable than all the other three and prices less than Benetton and Gap
but higher than H&M. In these four competitors, Benetton and Gap place
at relatively less fashionable and higher price, while Zara and H&M is
more fashionable and price lower.
Zara has developed a highly responsive supply chain that enables delivery
of new fashions as soon as a trend emerges. Zara delivers new products
twice each week to its 1,763 stores around the world. Rather than
subcontracting manufacturing to Asia, Zara built 14 highly automated
Spanish factories, where robots work around the clock cutting and dyeing
fabrics and creating unfinished gray goods, the foundations of their final
products. Zara has also created a partner network of more than 300 small
shops in Portugal and Galacia to handle the finishing work where, the gray
goods are transformed into dresses and suits. Inditex SA grew revenue
10% to $19.15 billion for its fiscal year ending January 31, 2012.
Inventory
Launched approximately 11,000 new items per year, Compare to 2,000
4,000 for H&M and GAP. Zara always focus on reducing time. Zara holds 6
days worth of inventory, while H&M holds 52 days, and Spanish Retailer
holds 94 days of inventor.
Forecasting

Extensive market research

Quick input and output response.
Frequent new styles
Near term forecasts
Customer feedback

Key success factors of Zara:

Short Lead Time = More fashionable clothes
Lower quantities = Scarce supply
More styles = More choice, and more chances of hitting it.
PRODUCT
Zara stores have men's clothing and women's clothing, each of these
subdivided in Lower Garment, Upper Garment, Shoes, Cosmetics and
Complements, as well as children's clothing (Zara Kids). Currently their
sizing on women's clothing goes to a US size 12 or a UK size 14.
Zara Mens and Womans
Zara produced a range with better fabrics and more "womanly" cuts, Zara
Basic essential fashion-fix pieces and fashion for younger women.
Lightness to the garments, with looser silhouettes seen on flowy dresses,

sarong pants, pleated culottes, softly-constructed blazers and silky tops.

Zara discover delicate cherry blossom prints on green silk dresses,
kimono-inspired shapes at Zara Basic and Oriental watercolor prints on
slim pants and chiffon tops. Zara produced a range of lightweight cotton
tops and paisley- print shirts, paired with comfortable cotton twill shorts,
cropped linen pants and linen blazers. The collection features hints of
ethnic Asian touches like robes, beads and string tie belts that provide
hippie- bohemian detailing.
Zara kids
Zara produce a unique and sophisticated range for childrens. Zara kids
clothing is a great place to shop and It felt secure in finding fun, unique,
great quality clothes there at a reasonable price point. Zara kids clothing
offers a whole new lifestyle for children, which serve to be tomorrow's
fashionistas. Indeed they can be a bit more expensive as compared with
adult clothing, but the brand's collections are truly worth
Zara Foot Wear
Zara Foot Wear, are one of the leading manufacturers offering a wide
array of ladies foot wears that are beautifully crafted. Their range include
ladies sports sandal, formal sandal, fashionable sandals, bellies, designer
sandals, shoes, high heel sandals, flat sandals and flat bellies. Established
at Dehradun, in Uttaranchal, in the year 2004. Under the guidance of Mr.
Shafiullah Khan, who has with him extensive experience of footwear
industry? His able handling of the operations and dedicated support of our
team help us in delivering ladies fashionable sandals and shoes. ZARA is
able to design classic designs like desert boots or brogues over to
espadrilles, sneakers and loafers. The pieces convince not just through the
design but through material, suede, perforated leather or premium canvas
and details, like pearls, studs, leather strings or fringes.
Zara Bags and accessories
Zara Home
Zara Home specializes its textile collections bed, table and bath linens
are complemented by dishware, cutlery, glassware and decorative
accents. Zara Home stores offer inspiration in a range of themed display
environments: Contemporary, Classic, Ethnic and White. Zara Home
constantly updates the merchandise in its shops to include the hottest
trends in home decoration. Zara Home was founded in 2003 and it now
has 364 stores in 37 countries.

Zara available in now all sizes.

Small boutiques

Mid-sized store
Colossal sized Department store.

Zara brands success Zara is one of the most well-known brands in the
world and is also one of the largest international fashion companies. They
are the third largest brand in the garment industry. The Zara clothing line
accounts for a huge bulk of its parent groups revenues. Inditex; annual
report: sales distribution
Zara is known to use teams of designers instead of individuals. Zara has
to face a lot of competition from H&M, Gap and Benton internationally.
Fortunately Zara is considered to be more fashionable than the rest of the
brands despite the fact that its price is less than Benetton and Gap. H&M
is still cheaper than Zara but is equally fashionable as Zara. Gap and
Benetton are less fashionable and more pricy.
Zara started out with low priced products which were pale imitations of
high end fashion products. This move led to Zara being a smashing
success and allowed them to expand by opening more stores in Spain.
Zara is unique in the way that it does not spend money on marketing and
instead concentrates on opening new stores instead. Their brave
experiments have led them to be labelled as one of the most innovative
retailers in the world.

SWOT analysis
Strengths
1.
2.
3.
4.

1.Cost leadership strategy

2.Efficient distribution
3.Information technology
4.Fast delivery of new products ,and trends

Weaknesses
1. 1.Centralized distribution system
2. 2.Doesn't spend much money on advertising
3. 3.Zara only has one manufacturing and distribution centre in the
world
Opportunity
1. 1.Global market penetration
2. 2.Online market
3. 3.Distribution centre in us
Threats
1. 1.Local competitors
2. 2.Global competitors

3. Zara based in Spain and has a huge no of stores in Europe will dent
in revenues.
BUSINESS STRATEGIES

Production & Distribution

Maintain quality
Cost leadership
Can offer more products than other
fast distribution system

Design

Ability to produce new products

Coordinate with R & D stores to get new trends
Feedbacks
Customers response

MIS
Product distribution system
Improving inventory system
Stores ordering system
Marketing

R&D
Market & location of stores
Market penetration
Consumer behaviour analysis

Zara Target & price

Zaras consumers are young, highly sensitive to latest fashion
trends.
Zara sells apparel, footwear and accessories for women, men and
children.

 Zara offers fashion at affordable price by following the most up to

date fashion trends .
VISION
ZARA is committed to satisfying the desires of our customers. As a result
we pledge to continuously innovate our business to improve your
experience. We promise to provide new designs made from quality
materials that are affordable
Mission Statement Through Zaras
business model, we aim to contribute to the sustainable development of
society and that of the environment with which we interacts.
BRAND POSITIONING
Zara among others, has about 3,000 stores worldwide H&M, based in
Swede n, has 2,500 (when you include its smaller lines of stores); and
Mango, based in Spain, 2,400.Zara accounts for nearly 70% of Inditexs
income, and, therefore, ma kes it the pillar of Amancio Ortegas the 3rd
richest man.
Zara controls and coordinates perfectly all the process and allows
reducing the times to minimums. Zara provided a considerable number of
products, which were more than rival corporations in the fashion industry.
It produced approximately 11,000 different products per year, while its
major rivals only produce 2,000 to 4,000. Zara spent four to five weeks on
the process of designing a new product and getting finished products in its
stores. So, Zara already was the leading brand in `fast fashion. Zara could
redesign existing products in no more than two weeks. Zara is indeed a
unique brand that, instead of creating an exclusive brand. Now that major
fast fashion competitors are adopting Zaras model, Inditex will be
-necessarily- bringing to the fashion retail industry.

CONCLUSION
1. Zara has an unordinary supply chain, which gives them a highly
competitive advantage.
2. Zara has successfully introduced a new, unique business model into
the apparel manufacturing and retail industry.
3. Zara choose to handle design, production, and distribution in-house
and concentrate the whole production close to their headquarters in
Spain.
4. By entire process, Zara can react much faster than its competitors
do to both the ephemeral trends in the world of fashion and the
capricious tastes of its customers.
5. Zara have achieved their success by thinking out of the box.
6. Their success is directly related to their ability to understand their
customer most innate needs and desires and tie these to successful

innovation strategies, which ultimately lead to these new and

unique approaches to their business.