Zara Business Strategy

Zara Business Strategy

Introduction

Zara is one of the most popular fashion brands with Spanish origin belonging to the Inditex group. The company was found in the year 1963 by Amanico Ortea Gaona and by the year 2005 its holding group Inditex became world's fastest growing manufacturer of fashion clothing that was both affordable and trendy. It has over 2000 stores all over the world and plans to make that number double by the year 2011. The success story of Zara is based upon its business strategy that fostered creativity, innovation and flexibility in its business model and that is what differentiated Zara from it competitors and provided it with an edge and competitive advantage both at a local as well as at an international level. The very first shop of Zara was opened in the year 1975 in the city of Spain which is to date the home and central location to its headquarters. Currently Zara is operating its business with more than 400 stores in five different geographical regions (Inditex; Murphy, 2008).

Discussion

Business Strategy

Zara defines its target market as “Young, educated one that likes fashion and is sensitive to fashion” (UK Essays). The business strategy of Zara focuses on gaining competitive advantage over its rivals through integration of is production, manufacturing, logistics and customer handling staff that is its store managers. It is the performance of these key activities in the supply chain area that actually speeds up the turnaround time of Zara's clothing from its manufacturing site to the stores within a matter of days while the normal delivery time for clothes from manufacturing facility to the point of sale is 9 to 10 months which makes it hard for its competitors to match to the positioning and branding strategy of Zara. In their words it is the creativity of the designers. Zara's ability to produce quality designs as per the demand of consumers and not only according to the market trend and rapid turnaround time has enabled Zara to expand its business in international market at a very fast pace. Zara has a clear focus and vision with regards to tapping into the fashion market. For that reason it has aimed at reducing the regular turnaround time of supply chain which was around 9 months to one to two months.

Another major reason is the focus of Zara's designers on what customers prefer and demand rather that following the regular fashion trend. When customers visit Zara stores, store managers or sales staff makes it a point to note what they prefer or like and communicate it to the head quarters with the help of their personal digital assistance device that has been given to every store manager for quick communication and increased efficiency. Within a matter of minutes the information is passed on to the designers and they are able to respond the needs of the customer in the quickest possible manner. This close focus on the needs and desires of the customers and spontaneous delivery is one ...