Zara case study

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Prof: Ahmed El Melegy


Ammar Al-Areqi 4491

Zara Case Study

1. Discuss the nature of competition and demand in the apparel industry?

While most apparel manufacturers were migrating manufacturing to Asia to gain cost efficiency, Zara recognized that speed, flexibility and innovation were key to establishing a stronghold of the market. Although manufacturing in Spain and Portugal has a cost premium of 10 to 15 percent, the local production means the company can react to market changes faster than the competition, ensure tighter connectivity between design and manufacturing, and produce greater flexibility in product distribution

2. What are Zara core competencies and competitive capabilities?

 has remained focused on its core fashion philosophy that creativity and quality design together with a rapid response to market demands will yield profitable results. In order to realized these results Zara developed a  that incorporated the following three goals for operations: develop a system the requires short lead times, decrease quantities produced to decrease inventory risk, and increase the number of available styles and/or choice. These goals helped to formulate a unique value proposition, to combine moderate prices with the ability to offer new clothing styles faster than its competitors. These goals helped to shape Zara’s current business model.

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a. The high turnover of its products.

b. Low level of inventory due to fast supply chain- 1 week final production cycle, two day outbound logistics, fast adaption of leading trends.
c. Effective distribution system
d. Commitment of its employee’s
e. scanning the fashion trends, market trends and meeting the consumer demands relating to fashionable clothes.
f. Flexible production system.

3. How does Zara model differ from its competitors? What are the pros and cons of the current model? 

Zara’s core business model is vertically integrated, it specializes in speed and efficiency and the fast fashion trend. Zara’s approach to information technology is ...

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