of Economic Geography Advance Access published October 23‚ 2007 Journal of Economic Geography (2007) pp. 1–18 doi:10.1093/jeg/lbm035 Global sourcing: insights from the global clothing industry—the case of Zara‚ a fast fashion retailer Nebahat Tokatli* Abstract Until recently‚ Zara‚ a major international clothing retailer and pioneer of ‘fast fashion’ principles‚ kept almost half of its production in Spain and Portugal‚ earning the reputation of being one of the exceptions to globalization
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to BusinessWeek‚ "Zara was a fashion imitator. It focused its attention on understanding the fashion items that its customers wanted and then delivering them‚ rather than on promoting predicted season’s trends via fashion shows and similar channels of influence‚ which the fashion industry traditionally used." 5 Zara‚ the fashion retail chain‚ is a subsidiary of Inditex Group owned and managed by Spanish tycoon Amancio Ortega. Inditex includes several major brands‚ namely‚ Zara‚ Massimo Dutti‚ Pull
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philosophy of Zara The fundamental business strategy of Zara is very simple which is linking customer demand to manufacturing‚ and liking manufacturing to distribution. Zara has been running their business in fashion industry which is susceptible to seasons and quick changing customer tastes. Zara has been approached to and considered their business as a perishable commodity business just like a fresh baked cake or bread to be consumed quickly. Thus‚ the main business tactics of the company in context
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do this ZARA establish 3 processes. 1. Ordering: Every store places an order twice a week to La Coruña. The order includes replenishment of existing items and initial request for newly items. • The store manager determines the replenishment items‚ walking around the store and counting the garments and talking with sales people. THEY CAN NOT LOOK UP THE INVENTORY BALANCE IN ANY COMPUTER IN THE STORE. So they can just determine this by walking around. • Managers can look for the
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price during 2001‚ affects the total financial figure of Gap too much that we think it not suitable to be used to directly compare with Inditex’s results. As for Benetton‚ we find its sales‚ net income and operating profit per store especially low to be compared with the other 3 firms. Inditex has an operating margin of 21.7% while H&M has a 13.1%. The operating margin can be used as a measure of each firm’s capital efficiency. It shows that Inditex has a greater power to earn a profit per each
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organizational dimensions". (Davenport‚ 1993) ZARA ZARA is founded in the year 1975 and owned by Amancio Ortega‚ in La Courna. Inditex is probably the world ’s fastest growing clothing retailer with over 3‚100 stores around the world in over 70 countries and the Zara format taking around 1‚000 of those stores. In March 2006‚ the group overtook Sweden ’s Hennes & Mauritz (H&M) to become Europe ’s largest fashion retailer. Inditex owns stores present in Europe‚ North and South America
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Summary: Zara is an apparel chain owned at operated by the Inditex of Spain. It was founded by Mr. Amancio Ortega Gaona; currently Spain’s richest man. Zara specializes in fast fashion. At the end of fiscal year 2001 Zara was operating 1‚284 stores world wide and had total revenue of 3‚250 million. Inditex’s headquarters and its major assets are located in the Galacia region of Spain. Inditex also operates five other chains: Massimo Dutti‚ Pull and Bear‚ Bershka‚ Stradivarius and Oysho. Zara owns
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OPERATIONS STRATEGY FOR ZARA COMPANY Operations strategy is the total pattern of decisions which shape the long-term capabilities of any type of operations and their contribution to the overall strategy‚ through the reconciliation of market requirements with operations resources. It is also a tool that helps to define the methods of producing goods or a service offered to the customer. Zara Company deals in the fashion industry. Zara’s success in the apparel industry is attributable to
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Companies should spend money on improving the work skills of their employees as it is to be seen from the leading top businesses that this will result in high success. Firstly‚ the more investment is made in improving a certain aspect‚ better results follow. By spending money on improving the skills‚ it will allow more productive workers making the production rate efficient which all leads to increasing profit. The word “skill” is quite broad since it could be any kind of skill and it will all
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office has turned into a reality. Employees can now more easily connect themselves with businesses. When the new work pattern emerges‚ many companies and staffs advocate it‚ because it seems to have some advantages; however‚ the deficiencies should not be ignored. Even though‚ technology allows‚ businesses should not give employees the choice to work remotely because it would affect management‚ performance and privacy of the companies. Companies should not allow employees to work remotely whenever the
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