Preview

Zara case operation management

Best Essays
Open Document
Open Document
3726 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Zara case operation management
Case Study Analysis- Zara
ABSTRACT
This paper is based on case study on operation management and positioning strategy of Zara, one of the world’s fastest growing manufacturers of fashion clothing. Also a world leading fashion retailer brand of Inditex. The case study outlines how Zara transforms from a local clothing retailer it into a global successful brand. It addresses few components in the case study, such as the products and process control and integrate business model used in Zara. The case also reveals the competitive strategies that Zara has opt in order to deal with its local and international customers. The strategies to retain and maintain market share have been explored. Furthermore the financial and business performance of Zara is discussed in comparison to literature findings in terms of business models, competitive strategies and the use of technology and quality control processes with consistent and flexible operations in business.

INTRODUCTION
Operation management plays an important part in a company; Focus on overseeing, designing and controlling the process of production (Stevenson & Hojati, 2007). By doing this, company want to make sure by using less resources and create greater efficient in terms of meeting customer requirements (Zeng, 2003). The customer is at the heart of the business model. A customer focused business is deisgned according to the needs of customers and satisfy these needs at best, timely nd appropriately (Lambert, Lewis, & Stock, 1993). As a world leading fashion brand, how does Zara manage to meet customer demand and methods they adopts to manage these large amount of demand and operation over world.
This paper presents a case study of a world’s leading fashion retailer Zara, which implementing in-house production and speed delivery over the world. In this article, it will outline and analyze the positioning strategy and operation management of Zara.

BACKGROUND OF COMPANY
The founder of Zara is Amancio



References: Balakrishnan, S., & Wernerfelt, B. (1986). Technical change, competition and vertical integration. Strategic Management Journal, 7(4), 347-359. Christopher, M., & Towill, D. R. (2002). Developing market specific supply chain strategies. International Journal of Logistics Management, The, 13(1), 1-14. Danskin, P., Englis, B. G., Solomon, M. R., Goldsmith, M., & Davey, J. (2005). Knowledge management as competitive advantage: lessons from the textile and apparel value chain. Journal of Knowledge Management, 9(2), 91-102. Hill, C. W., & Jain, A. K. (2007). International business: Competing in the global marketplace (Vol. 6): McGraw-Hill/Irwin New York, NY. Lambert, D. M., Lewis, M. C., & Stock, J. R. (1993). Customer-focused strategies for motor carriers. Transportation Journal, 21-28. Melville, N., Kraemer, K., & Gurbaxani, V. (2004). Review: Information technology and organizational performance: An integrative model of IT business value. MIS quarterly, 28(2), 283-322. Powell, T. C. (1995). Total quality management as competitive advantage: a review and empirical study. Strategic Management Journal, 16(1), 15-37. Robertson, P. L., & Langlois, R. N. (1995). Innovation, networks, and vertical integration. Research policy, 24(4), 543-562. Stevenson, W. J., & Hojati, M. (2007). Operations management (Vol. 8): McGraw-Hill/Irwin Boston. Ward, P. T., & Duray, R. (2000). Manufacturing strategy in context: environment, competitive strategy and manufacturing strategy. Journal of Operations Management, 18(2), 123-138. Zeng, A. Z. (2003). Global sourcing: process and design for efficient management. Supply Chain Management: An International Journal, 8(4), 367-379.

You May Also Find These Documents Helpful

  • Good Essays

    INFO0331

    • 778 Words
    • 4 Pages

    There are several ingenious steps taken by Zara that proves both profitable and unprecedented. Zara has used technology to revolutionize their business, from buying the unprocessed cloth to determining which color die to use and what to make with that cloth. The technology process continues on the manufacturing lines and all the way to the final sale. But it does not stop there, it goes beyond the point of sale to question the reasons why a purchase was not made after a client expressed an interest in an item. The point of sale system provides real time data which is given immediate attention. PDAs are actively gathering information which is constantly been taken into consideration. The design strategy is another intuitive step. They do not follow custom catwalk fashion shows, instead they design based on customer demand. Manufacturing and logistics is a key contributor to their highly acclaimed success. The ability to have a product ready and on the shelves in ten days vice the competitor’s time of approximately three to nine month is where the strength of flipping their dollar lies and is accomplished mainly through vertical integration and technology orchestrated coordination of supplies. Deliver to replenish and deliver new stock is an expedited process, in some cases deliver is made overnight. Items placed on the shelves are readily picked up and nothing is ever marked down in a sale. Zara identify and manufacture the clothes customers want, get those products to market quickly, and eliminate costs related to advertising, inventory missteps, and markdowns…

    • 778 Words
    • 4 Pages
    Good Essays
  • Good Essays

    Zara Case Write-Up

    • 1277 Words
    • 6 Pages

    The business idea of Zara is to link customer demand to manufacturing, and to link manufacturing to distribution. And based on this general idea, Zara has several essential elements for its business model. First, speed and decision making, which means that in the external level, Zara need to respond very quickly to demands of target customers, and always keep in style. While for the inside, Zara treasure intelligence and judgment of common employees who enjoy a great deal of autonomy. Second, its marketing, merchandising and advertising strategy. Zara does not spend on virtually advertising, while it spends heavily on stores, and no selling online because of the nature of its DCs and complication of online selling. Also, Zara has clear positioning that its clothes are always in style and not for durable use. Third, Zara has lots of stores and large scales, which has promising financial achievements as well as potential growth point. In general, Zara has a business model of preferences for speed and decentralized decision making.…

    • 1277 Words
    • 6 Pages
    Good Essays
  • Satisfactory Essays

    zara case study

    • 670 Words
    • 3 Pages

    The close relationship between manufacturing and retailing make Zara different from the others specialty apparel retailers. His motto could be « fast and fashion ». Zara controls all phases of production of its clothing from design to distribution. A choice taken by the will of the company to « adapt to the client's request in minimum time.», for Zara, the most important thing is time.…

    • 670 Words
    • 3 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Strategic Management

    • 251 Words
    • 2 Pages

    Even though one might believe that the system used by Benetton and such other collections such as GAP is superior due to the lower labor costs by the outsourcing to other countries and other reasons, in reality the process used by Inditex, the worlds third largest clothing retailer, to produce the Zara brand is much better because even with higher labor costs, transportation and shipping involve in the manufacturing process and shipping finished product to stores, costs are still lower and the product is in one place for production. Thus Inditex has greater responsiveness and flexibility. Inditex uses a network of several smaller manufacturing companies that provide needed materials and provide more flexibility. In addition, Inditex owns all its own shops and is not operated in retail franchises that are owned by third parties. This extra “hands on” approach allows Inditex to have a lot more control over both production and sell of product and allows them to have more direct consumer contact to improve their product or know what the consumer wants. By combining high fashion, rapid response to sales feedback, and low costs—giving the consumer low pricing, Inditex definitely has the superior…

    • 251 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    Bibliography: Andrew, M., Vincent, D., & Anders, S. (2004, 12 17). Zara: IT for fast fashion. Craig, A., Jones, C., & Nieto, M. (2004, April 2). ZARA: Fashion Follower, Industry Leader. Business of Fashion Case Study Competition . Ghemawat, P., & Nueno, J. L. (2003, April 1). Zara: Fast fashion. (2008). Inditex Annual Report. Render, B., & Heizer, J. (2005). Operations Management (8th ed.). Pentrice Hall. Shingo, S. (1989). A study of the Toyota Production Syste. Productivity Press , 187. Zara s Business Model. (2010). Retrieved April 17, 2010, from 123helpme: http://www.123HelpMe.com/view.asp?id=97642…

    • 1968 Words
    • 8 Pages
    Powerful Essays
  • Better Essays

    Zara International was a retail shop originated in La Coruna, Spain in 1975. It was clothing and accessories shop and imitated the latest fashion trends and sold them at a lower cost. It became Zara International after entering Portugal in 1988 and then the United States and France in the 1990s. The distributor for this brand is Inditex and is considered the most successful retail chain in the world. Zara has a business strategy that is very different from the retailers nowadays. If a customer orders a product Zara’s distribution centers can have the items in the store within 24 to 48 hours of receiving the order, depending upon the country. The business plan that Zara’s executives made was very innovative and played a great part in the success of this retail chain. Not only has it been successful and profitable in the past, they are successful in the present and have been expanding their brand all over the world…

    • 992 Words
    • 4 Pages
    Better Essays
  • Good Essays

    M&S & Zara Company

    • 846 Words
    • 4 Pages

    Spanish retailer Zara has hit on a formula for supply chain success that works. By defying conventional wisdom, Zara can design and distribute a garment to market in just fifteen days. In Zara stores, customers can always find new products—but they're in limited supply. This makes the customer eager to visit the store more often and in an urgent manner. Whatever is sold will not be back again. Such a retail concept depends on the regular creation and rapid replenishment of small batches of new goods. Zara often beats the high-fashion houses to the market and offers almost the same products, made with less expensive fabric, at much lower prices.…

    • 846 Words
    • 4 Pages
    Good Essays
  • Best Essays

    25. Simchi-Levi, D.; Kaminsky, P.; Simchi-Levi, E. (2008): Designing and Managing the Supply Chain: Concepts, Strategies and Case Studies. 3rd Ed. Boston. ISBN 0-07-128714-0…

    • 3034 Words
    • 13 Pages
    Best Essays
  • Powerful Essays

    Zara: The Leading Brand

    • 3304 Words
    • 14 Pages

    Zara has successfully built a worldwide famous brand thanks to its premium locations as well as a unique management system of design, production and supply chain. Unlike other fashion brands, it takes Zara only 10 to 14 days from the time it designs new clothing until it arrives in stores.The case describes the implementation of the fast-fashion concept by Zara and analyzes the components of its flexible integrated business model . Furthermore it reports on the international expansion of Zara, identifying phases and modalities of expansion.…

    • 3304 Words
    • 14 Pages
    Powerful Essays
  • Powerful Essays

    Zara Customer Care

    • 3322 Words
    • 14 Pages

    This report is about ZARA which is a global brand of clothing owned by the Inditex Group. It is the world's third-clothing retailer, one of the world's four major fashion chain (the other three are the United States of casual fashion giant GAP, the Swedish fashion giant H & M, German parity giant clothing chain C & A), has more than 2,000 stores in 70 countries around the world. It was established in 1975 by Spanish fashion designer and tycoon Amancio Ortega. The first store opened in Galicia, Spain, where it is now headquartered. The company is very unusual in the fashion retail world and incorporates many pioneering concepts. The company takes just two weeks to get its products on its store shelves after designing them, compared with six months for its competitors. It does not advertise, preferring instead to use money on opening new stores. Zara also owns and controls every stage of production from design, manufacture, supply and sales. A Louis Vuitton spokesperson described it as “possibly the most innovative and devastating retailer in the world”. (Baidu.com 22, June, 2012)…

    • 3322 Words
    • 14 Pages
    Powerful Essays
  • Good Essays

    Herlo

    • 290 Words
    • 2 Pages

    Zara’s ability to distribute stock within 24 to 48 hours depending on global location also contributes to Taylor’s scientific management theory. One of the four guiding action principles of the scientific management theory states that you must “develop for every job a ‘science’ that includes rules of motion, standardized work implements, and proper working conditions”. Zara has created a science that works well for the company through their ability to efficiently perform and complete tasks. The parent company of Zara, “Inditex Group” has shortened the time from order to arrival by a complex system of just-in-time production and inventory reporting that keeps Zara ahead. Inditex also controls design, production, distribution, and retail sales to optimize the flow of goods without having to share profits with wholesalers or intermediary partners. They also have followed Taylor’s second guiding action principle, “carefully select workers with the right abilities for the job”. The company employs more than 200 professional designers to help keep up with the latest fashions, thus, following the guiding action principle. Another element of a classical management approach apparent in Zara International’s management is the bureaucratic aspect of “clear division of labour”. The jobs at Zara are well defined, and workers become highly skilled at performing them – that way, the employees are able to be good and quick with receiving the latest fashions within such a short amount of time. In conclusion, Zara International applies the classical management approaches of Taylor and Weber’s foundations of a scientific management and a bureaucratic…

    • 290 Words
    • 2 Pages
    Good Essays
  • Good Essays

    Success Factor for Zara

    • 1117 Words
    • 5 Pages

    One of Zara´s distinctive key success factors is their valuable and planned integrated logistics and supply chain management. This allows them to further develop and deliver a competitive marketing mix. In a marketplace where customers expect to find the latest designs that are still in fashion, Zara is an outstanding example of how to make that possible. It usually takes at least six months in the textile industry for an idea to be transformed into a product and reach the store shelves. By reducing the lead-time through efficient channel management, Zara has developed a vertical integrated business model, which allows them to change some parts of their inventory in only a couple of weeks.…

    • 1117 Words
    • 5 Pages
    Good Essays
  • Powerful Essays

    Emerald Group Publishing Limited (2005), How Zara fashions its supply chain, Strategic Direction,21, 10,p.28-31 [online] available from www.emerald.com…

    • 2394 Words
    • 10 Pages
    Powerful Essays
  • Satisfactory Essays

    Zara Business Case

    • 653 Words
    • 3 Pages

    With a network of over 1600 stores worldwide it is very hard for Zara high ranking officials to manage everything. This is why it breaks down its process and gives it to other companies for them to do the work. They have 100 plus textile design, manufacturing and distribution companies that employ more than 80,000 workers. This style is essential to Zara’s growth and success. They trust others in their skills and abilities. It is a modern way of handling a business. Instead of being like a dictator Zara managers…

    • 653 Words
    • 3 Pages
    Satisfactory Essays
  • Powerful Essays

    JURNAL STRATEGI OPERASI

    • 9514 Words
    • 43 Pages

    Mills, J., Platts, K., Neely, A., Richards, H. and Bourne, M. (2002), Creating a Winning Business…

    • 9514 Words
    • 43 Pages
    Powerful Essays