Zara is vertically integrated as a result of its focus on being the quickest and most agile fashion retailer in the market. Zara’s structure vertically integrates the design process, just-in-time production, sourcing, delivery and sales which provides a very close and informal information network and efficient coordination across all of the production and sales units. For example, store managers are able to share feedback on how new designs are being received by the market with the relevant design and production departments to help improve the process. Production and delivery of items, such as incremental design and volume adjustments, can thus be tweaked and improved during the season and put into the stores with little lead time. Another example is the speed at which Zara’s can take a product from design to market. The industry standard is for a design to market cycle of six weeks while Zara is capable of executing a three week production to market cycle.

One can think of Zara’s strategy as using its speed and agility to be the quickest to react to existing market demand, rather than trying to directly influence market demand. This is evidenced by the fact that Zara, unlike most of its competitors, avoids employing star designers or participating in the major fashion shows.

Zara’s success in this area has been self-reinforcing. Customers, knowing that items will typically not remain in stores for longer than a few weeks with no guarantee of being restocked (most likely because the next batch will have changed), are more inclined to purchase items immediately; it has created a scarcity value. Further, Zara has helped bring about a cultural phenomenon of “instant fashion,” where consumers can immediately emulate the fashion choices of popular celebrities such as Madonna and Letizia Ortiz Rocasolano. Being the fastest to market allows its customers to be a