Zara: Fast Fashion Case
The ZARA: Fast Fashion case.
1. Create a diagram that illustrates the linkages among Zahra’s competitive choices.
Firstly, everything is connected through centralized hubs. Zara has its main operations in Spain, but with each expansion into a new country, that country has its own centralized Zara facility. This allows for local factors to be considered in each market, but gives Zara an excellent line of communication and ultimate control of all operations. The in-house designs are sourced this way, through representatives in each country bringing forth new fashion concepts for the upcoming season. These concepts are then whittled down by cost, feasibility, and market trends. Then the designs are prototyped and manufactured. The manufacturing is also mostly owned by Zara’s parent company, helping reduce costs and lead times. From manufacturing, products are then packaged and labeled back at headquarters for shipping. Most of the shipping is via trucks. Overseas shipping is by air, which means the prices are adjusted so that overseas customers bear this cost. The retail storefronts are setup so that products aren’t on the shelves for more than 3 weeks. This along with careful inventory control create the illusion of scarcity. The marketing is also related in that Zara only places ads twice a year, around the sales seasons. This helps to prevent over-exposure, so that the fashion-forward customers feel trendy. The scarcity factor also helps reduce loss. If a product bombs in one store, it’s pulled immediately, to either be sold in another location or discounted to local partners. This means that if a product isn’t doing well, it doesn’t sit forever in the store wasting space that could be used to display a profitable product.
2. How do the distinctive features of Zahra’s business model affect its operational structure?
The interconnectedness of these systems in Zara’s operations gives it a hive-like structure. Every employee in every store works together to
1. Create a diagram that illustrates the linkages among Zahra’s competitive choices.
Firstly, everything is connected through centralized hubs. Zara has its main operations in Spain, but with each expansion into a new country, that country has its own centralized Zara facility. This allows for local factors to be considered in each market, but gives Zara an excellent line of communication and ultimate control of all operations. The in-house designs are sourced this way, through representatives in each country bringing forth new fashion concepts for the upcoming season. These concepts are then whittled down by cost, feasibility, and market trends. Then the designs are prototyped and manufactured. The manufacturing is also mostly owned by Zara’s parent company, helping reduce costs and lead times. From manufacturing, products are then packaged and labeled back at headquarters for shipping. Most of the shipping is via trucks. Overseas shipping is by air, which means the prices are adjusted so that overseas customers bear this cost. The retail storefronts are setup so that products aren’t on the shelves for more than 3 weeks. This along with careful inventory control create the illusion of scarcity. The marketing is also related in that Zara only places ads twice a year, around the sales seasons. This helps to prevent over-exposure, so that the fashion-forward customers feel trendy. The scarcity factor also helps reduce loss. If a product bombs in one store, it’s pulled immediately, to either be sold in another location or discounted to local partners. This means that if a product isn’t doing well, it doesn’t sit forever in the store wasting space that could be used to display a profitable product.
2. How do the distinctive features of Zahra’s business model affect its operational structure?
The interconnectedness of these systems in Zara’s operations gives it a hive-like structure. Every employee in every store works together to