Despite these limitations, however, the parent company of Zara, in Inditex, has built an extremely well-performing value chain that is by far the most responsive in the industry. Store size and location affected the number of employees in it. Since then they have expanded operations into 45 countries with 531 stores located in the most important shopping districts of more than 400 cities in Europe, the Americas, Asia and Africa. Zara, the most profitable brand of Spain clothing retail group Inditex, has leveraged its unique strategy to achieve success and will be expected to maintain a sustainable growth in the fashion industry. Consumers can adopt fashion changes through similar people, which are known as opinion leaders, or, for example, through mass-communication channels such as music television which highlights current trends. Throughout this expansion Zara 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.
Finally, unlike other retailing sectors, apparel retailing remained relatively globalized. To attract its consumer base, Zara focuses heavily on the brick-and-mortar design and location of the stores as well and creates the illusion of scarcity for its products. A 3500 words essay, for example, cannot be compared to one with less or more words. How does this strategy contribute to its competitive advantage? The whole process would be time consuming, and implementing the new system would be very difficult as the reliability of the system is not certain. We believe that the best solution would be to copy the European business model. It was founded by Amancio Ortega Gaona, still president and shareholder in 2002 in the region of Gailicia in Spain, a place with tradition in apparel and full of individual workshops that however lacked an organized industry association to control and manage these activities.
Designing fast fashion The Duchess of Cambridge is one of Zara's most famous fans, wearing a blue dress from the high street store the day after her wedding to Prince William Image: Getty Another thing that sets Zara apart from the competition is that, unlike most other retailers, they don't just produce one product range per season. Inedited operates 1,558 stores in 44 countries, of which 531 stores are part of Ezra chains. So where did it all begin? This allows for local factors to be considered in each market, but gives Ezra an excellent line of communication and ultimate control of all operations. This kind of out-sourcing activity enhances the global cooperation as well. Overall, the company shows net margin continuously growing indicating profitable growth.
The time it took for designing, manufacturing and distributing was by far the shortest among anyone in the industry along with its competitors. Low cost and mark et share are the major reasons why Zara wants to expand globally in order to remain competitive while other companies become global. The fashion industry is a fast changing industry with new trends appearing on daily basis. Social media has created a generation of shoppers who are obsessed with newness. However, with the expansion of Zara in A sia and North America, inventory management problems will be more complicated and complex as more stores are added on. Other intermediaries were branded marketers who outsourced apparel production sold under their own brand name and branded manufactures that also sold products under their brand name, but owned some manufacturing too. It has opened his first store in 1975 in La Coruna in Spain.
The in-house designs are sourced this way, through representatives in each country bringing forth new fashion concepts for the upcoming season. The fact that all the stores are directly connected to the main system which in ollects all the data is a great way for analyzing things that are going on in different stores. The lead times would change. This connects well with the knowledge flow model as it is bound to lead to successful globalization. Please place the order on the website to order your own originally done case solution.
Due to the vise policies and brilliant of the management it flourished and expanded at a very brisk pace and is now one of the most dominant and profitable brand chains of the Inditex brands. Most other retailers commit 100% of their designs ahead of a season, and are often left with excess inventory that they then have to discount heavily at season-end. The decision making process is based on the judgment of employees throughout the company instead of relying on a small set of decision makers; the majority of the decisions were made by store managers and as a result they placed orders for the items rather than simply accepting and displaying what headquarters decided to send them. A massive success story Zara has shops around the world Image: Reuters Today Inditex operate more than 7,475 stores in 96 markets, making them the world's largest and most influential retail group. In addition to that, they continuously introduce new items throughout the year, allowing them to be ahead within the industry. So what is so special about this division of manufacturing? Firstly, everything is connected through centralized hubs. With vertical integration, it benefits Zara in cost aspect, however, it involves some risks.
Fashion markets are synonymous with rapid changes and short product life cycles. The present system followed by Zara has been very effective and very easy to maintain, which as a result has persuaded the company to continue without any change in the present system so far. Their pay is target driven and they can double their salary through bonuses. Although these can be seen as the American precursors to the fast fashion empire, these mall stores were unable to churn out new clothing trends nearly as fast as what we've come to expect these days. But when you look at the heart of Ortega's business you start to see what a true retail visionary he is. This enables them to manage one of the most efficient supply chains in the fashion industry, and to create the fast fashion category as a market leader. This strategy resulted in particularly low cycle times giving Zara a competitive advantage over its competitors.
Finally, the company should employ highly effective automation process in its downward supply stream. In 2001, Inditex sold 26% of its shares to the public, although Amancio Ortega kept more than 60% and also adopted a social strategy that involved dialogue with employees, suppliers, non-governmental organizations and local communities. Zara will no doubt continue to assess its business model and, if needed, adjust it to meet the changing needs of its customers. How does Zara's business model set it apart from other retail competitors? In order to achieve continuous and employee involvement. We believe that by offering the online store first they would get much greater understanding of the market as a whole. How sustainable is this advantage? We also have to keep in mind that Zara is Just a fashion imitator. The nature of the industry is discussed in terms of its volatility, complexity and dynamism.