Case study Zara
- 2. ZARA is a Spanish clothing and accessories retailer based in Arteixo, Galicia. Founded in 24 May ,1975 by Amancio Ortega and Rosalía 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 10,000 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. 1763 stores , 78 countries worldwide. Zara has continually maintain its mission to provide fast and affordable fashionable items . Inditex (Industria de Diseño 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. Zara welcomes shoppers in 86 countries to its network of 1.763 stores in upscale locations in the world's largest cities. Zara's approach to design is closely linked to their customers.
- 3. Around the world Zara 1.763 Zara Kids 171 Pull & Bear 817 Massimo Dutti 630 Bershka 899 Stradivarius 794 Oysho 529 Zara Home 364 Uterqüe 91 TOTAL 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. •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. Competitors of inditex
- 4. • 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.
- 5. 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 inventory .
- 6. Forecasting Extensive market research Quick input and output response Frequent new styles Near – term forecasts Customer feedback
- 7. 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.
- 9. 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 .
- 10. 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.
- 11. Zara produce a unique and sophisticated range for children’s . 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
- 12. 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.
- 15. 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.
- 16. Zara available in now all sizes.. Small boutiques Mid sized store Colossal sized Department store
- 17. 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 group’s revenues. Indidex ;annual report: sales distribution
- 18. 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 labeled as one of the most innovative retailers in the world.
- 19. Strengths 1.Cost leadership strategy 2.Efficient distribution 3.Information technology 4.Fast delivery of new products ,and trends Weaknesses 1.Centralized distribution system 2.Doesn't spend much money on advertising 3.Zara only has one manufacturing and distribution centre in the world Opportunity 1.Global market penetration 2.Online market 3.Distribution centre in us Threats 1.Local competitors 2.Global competitors 3. Zara based in Spain and has a huge no of stores in Europe will dent in revenues. SWOT analysis
- 21. 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
- 22. MIS • Product distribution system • Improving inventory system • Stores ordering system Marketing • R & D • Market & location of stores • Market penetration • Consumer behavior analysis
- 23. •Zara’s 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 . Zara Target .&.price
- 24. 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 Zara’s business model, we aim to contribute to the sustainable development of society and that of the environment with which we interacts.”
- 25. 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 Inditex’s income, and, therefore, ma kes it the pillar of Amancio Ortega’s –the 3rd richest man.
- 26. 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 an unique brand that, instead of creating an exclusive brand. Now that major fast fashion competitors are adopting Zara’s model, Inditex will be -necessarily- bringing to the fashion retail industry.
- 28. 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 customers most innate needs and desires and tie these to successful innovation strategies, which ultimately lead to these new and unique approaches to their business.
- 29. Thank you !!