Zara Case
Competition Strategy
ZARA-case
1.a:
Strengths
- Internalized cross-border functions,
- Affordable prices
- Quick response
- Strong real estate network
- Wider vertical scope than competitors, owned much of its production and most of its stores.
- Galica’s geographical position from the prespective of transport costs
- Originated design and finished goods in stores within four and five weeks in the case of entirely new designs and two weeks for modifications of existing products.
- Just-in-time system, lower warehouse and inventorie costs
- Positive “word of mouth” advertising
- The stores were typically located in higly visible locations
- Low leasing cost
- Designer-style garments and accessories with broad, rapidly changing product lines; relatively high fashion content; and reasonable but not excessive physical quality.
- Zara placed more emphasis on using backward vertical integration to be a very quick fashion follower than to achieve manufacturing efficiencis by building up significant forward order books for the upstream operations.
Weaknesses
- Lacked Italy’s fully developed thread-to-apparel vertical chain (including machinery suppliers), its dominance of high quality fabrics (such as wool suiting) , and its international fashion image.
- Centralized logistics model might ultimatey subject to diseconomies of scale.
- Little advertsing did not create too strong prefence for the Zara brand
Opportunities
- Cross-border homogeneity in fashion
- The advantage of outsourcing due to its labor intensive feature, to lower cost
- Proximity matter due to its effect of reducing shipping costs and lags,
- MFA (Multi-Fiber Arrangement) avoided market from fake products
- The increased concentration of apparel retailing in major markets
- Quick respond had led to significant compression of cycle times, enabled by improvements in information technology and encourged by shorter fashion cycles and deeper markdowns,
ZARA-case
1.a:
Strengths
- Internalized cross-border functions,
- Affordable prices
- Quick response
- Strong real estate network
- Wider vertical scope than competitors, owned much of its production and most of its stores.
- Galica’s geographical position from the prespective of transport costs
- Originated design and finished goods in stores within four and five weeks in the case of entirely new designs and two weeks for modifications of existing products.
- Just-in-time system, lower warehouse and inventorie costs
- Positive “word of mouth” advertising
- The stores were typically located in higly visible locations
- Low leasing cost
- Designer-style garments and accessories with broad, rapidly changing product lines; relatively high fashion content; and reasonable but not excessive physical quality.
- Zara placed more emphasis on using backward vertical integration to be a very quick fashion follower than to achieve manufacturing efficiencis by building up significant forward order books for the upstream operations.
Weaknesses
- Lacked Italy’s fully developed thread-to-apparel vertical chain (including machinery suppliers), its dominance of high quality fabrics (such as wool suiting) , and its international fashion image.
- Centralized logistics model might ultimatey subject to diseconomies of scale.
- Little advertsing did not create too strong prefence for the Zara brand
Opportunities
- Cross-border homogeneity in fashion
- The advantage of outsourcing due to its labor intensive feature, to lower cost
- Proximity matter due to its effect of reducing shipping costs and lags,
- MFA (Multi-Fiber Arrangement) avoided market from fake products
- The increased concentration of apparel retailing in major markets
- Quick respond had led to significant compression of cycle times, enabled by improvements in information technology and encourged by shorter fashion cycles and deeper markdowns,