COMPANY PROFILES

Zara is the flagship chain store of Inditex Group owned by Spanish tycoon Amancio Ortega, who also owns brands such as Massimo Dutti, Pull and Bear, Oysho, Uterqe, Stradivarius and Bershka. The group is headquartered in A Corua, Spain, where the first Zara store opened in 1975. Zara has resisted the industrywide trend towards transferring fast fashion production to lowcost 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

ZARA- Business Model

Zaras business model can be broken down into three basic components:
1. 2. Concept: To maintain design, production, and distribution processes that will enable Zara to respond quickly to shifts in consumer demands. Capabilities: It maintains tight control over their production processes keeping design and manufacturing in-house or with some strategic partnerships located nearby . They have strategic agreements with local manufacturers that ensure timely delivery and service. Thus, maintaining the flexibility necessary to design and produce over 12000 new items annually. Value drivers : for Zara are both tangible and intangible in the benefits that are returned to all stakeholders.

3.

Tangibly Inditex, the parent company of Zara, has 11.02% net margin on operations. Intangibly, customer loyalty and brand recognition have provided significant value to Zara.

How Zara manage the strategy of distribution....?

Strategy
Elements supporting Zaras business structure and strategy are interlinked and interdependent. The following three factors stand out: Extensive market research Locating various business function Communication and information Technology

STRATEGIES
Target market Zaras target market is people from teens to adults, men and women. Product assortment Zara is broadly and deeply assorted. Procurement Establishing merchandise sources, policies and practices. Prices Zara product price is affordable

Services Prepurchase service, postpurchase service, ancilary service.

Strategic Advantages
Zara has been able to achieve excellent financial status due to its core competencies that provide the chain with a competitive advantage over traditional retailers in the industry Zara is an apparel chain that works differently from traditional retailers. Generally, a traditional retailer outsources all of its production while focusing on distributing and retailing those goods. This is due to the fact that the global apparel industry is highly-labor intensive rather than capital intensive

Retail Environment
Zaras managers and sales associates are in charge of transmitting the sales analysis, the product life cycles, and the store trends to the designers. This allows the designers in Spain to develop the right products within the season to meet consumer demand

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SWOT ANALYSIS

Question for Zaras ?

On which way can the fact that zara has a single distribution centre be an advantage? Centralized control, avoid misunderstanding or conflicts. Manageable time scheduling, focused on one rather than managing several different time schedules. On which way can this be an disadvantage? Diseconomic of scale in long term, the costs is getting higher and higher. Because of managing distributions on their own, designing and production process might not be in its optimum level.

Recommendation
Design Cooperate with vary range of designers so Zara can maintain its competitive advantage to be the fast fashion but remain more and more creative. Production Cooperate with any channel of production all over the world so new improvements in operation technology can be applied into Zara instead of keep using the old ones. Distribution Making more distribution centres so they will enable Zara to be more faster, effective, and efficient in distributing their products to the retailers. Advertising Advertising might be important in the future when competitors are becoming more competitive and demands are declining.

CONCLUSION
To be successful an organisation must have a clear competitive strategy Distinctive competences based on critical success factors in the value chain are the source of competitive advantage Each element of the value chain can serve to increase value A clear understanding of customer needs In increasingly competitive markets new ways of hearing, understanding and responding to customer needs

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