...ZARA: FAST FASHION When Amancio Ortega, a former Spanish bathrobe maker, opened his first Zara clothing store, his business model was simple: sell high-fashion look-alikes to price-conscious Europeans. After succeeding in this, he decided to tackle the outdated clothing industry in which it took six months from a garment’s design to consumers being able to purchase it in a store. What Ortega envisioned was “fast fashion”—getting designs to customers quickly. And that’s exactly what Zara has done! The company has been described as having more style than Gap, faster growth than Target, and logistical expertise rivaling Wal-Mart. Zara, which is owned by the Spanish fashion retail group Inditex SA, recognizes that success in the fashion world is based on a simple rule—get products to market quickly. Accomplishing this, however, isn’t so simple. It involves a clear and focused understanding of fashion, technology, and their market, and the ability to adapt quickly to trends. Inditex, the world’s largest fashion retailer y sales worldwide, has seven chains: Zara (including Zara Kids and Zara Home), Pull and Bear, Massimo Dutti, Stradivarius, Bershka, OYsho, and Uterque. The company has over 5, 618 stores in 84 countries, although Zara pulls in over 60 percent of the company’s revenues. Despite its global presence, Zara is not yet a household name in the United States, with just over 50 stores open, including a flagship store in New York City. What is Zara’s secret to...
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...adapt. These forces affect the value chain and the generic strategies that help build the framework that can help the businesses know their position and their competitors’ position to make a strategic plan for the business. ZARA is the world largest clothing retailer operating in 86 countries ("INDITEX Group - Zara", n.d.). ZARA was founded by Amancio Ortega in 1975 ("ZARA - Spanish Fashion's First International Company | don Quijote", n.d.) ZARA had their first store in La Coruña, Spain, which is now the currentmain headquarter. The success of ZARA is a very interesting story so in this paper the discussion will be over ZARA’s position and its competitors’ position by applying Porter’s Five Forces. Another focus will be the generic strategy and value chain. Lasitaporn Kraikruan Porter’s Five Forces Porter’s Five Forces are tools that can help a business understand their business position, current competitive position, and its profitability level by considering the tension of 5 forces: Bargaining of suppliers, bargaining of buyers, threat of new entrants, threat of substitute products or services, rivalry among existing competitors. It also implies whether an industry is attractive or unattractive. Porter’s Five Forces in ZARA are the following: Bargaining power of suppliers: The power of suppliers can drive the price up of raw materials, if there are few suppliers in the market. Low availability to access materials and a high switching cost to...
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...Jabed Alam w1537441 Seminar Teacher: Kamala Balu In your opinion which two motivation theories would be most usefully integrated into a model of motivation for an organisation looking to motivate and retain new graduates early in their careers. You must clearly justify the choice of theories chosen for this occupational group. Today this essay will be analysing and expressing two motivational theories. The theories will be concluded and conducted in the thesis of retaining and maintaining new graduates within their early stages of the working environment. The organisation that has been chosen to be based upon within this essay is Zara, the clothing company. After interpreting the essay question I have decided that the two controversial theories I will be assessing is Maslow’s theory that is constructed upon the hierarchy of needs as well as Fredrick Taylor and the application of scientific management and the motivational influence of money. I will be engaging and implementing my own opinion as to why I feel these theories are justifiable for the chosen occupational group, along with providing key research, highlighting benefits and drawbacks of these theories. Initially my essay will begin with the theory hypothesised by the man known as Abraham Maslow. I will briefly describe the main factors that are included within Maslow’s theory. Maslow refers to a pyramid of hierarchy that shows the basics needs that a worker requires in order to successfully be motivated....
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...SCHOOL OF MANAGEMENT Learning to make a difference MKIB: 230 Retail Marketing Coursework assignment: “For a retail organization of your choice evaluate the elements of its retail marketing mix, in terms of the effectiveness with which they are used to appeal to the core target market” ZARA – flagship chain store List of Contents I. Introduction: 2 II. Background 2 III. Retail Marketing Mix 3 1. Merchandise assortment 3 2. Location 3 3. Price 4 4. Store design and Visual merchandising 4 5. Advertising and promotions 5 6. Customer service 5 IV. Competitors 6 V. Conclusion 6 References 7 Appendix I………………………………………………………………...…..9 Appendix II…………………………………………………………………..10 Appendix III…………………………………………………………………11 I. Introduction: The following report is about the evaluation of the marketing mix of “ZARA” clothing, which is considered to be one of the most successful clothing brands in the UK nowadays. This report will focus your attention on the main elements of the its retail marketing mix. The main objective of the report is to show how effectively those elements are used by Zara to appeal to the core target market. For the report were used primary and secondary researches. The secondary data was derived from various academic books, journals, websites, Internet resources, annual reports. The primary data was collected through qualitative approaches. Some observations of the stores were made, as well as exploring the staff...
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...Zara Case Study Fast Fashion Zara’s success story begins by offering a product range capable of catering for men, women and children, providing affordable and stylish clothes whatever the season. Coupled with this, is their keen eye for discovering new fashion trends and translating these trends from the catwalk to the high street, both quickly and affordably. Zara boasts a marketing strategy of firstly product variety with a focal point of ensuring speed to market (Capell). At present, Zara launch 10,000 new articles per year across their portfolio of stores. Finally, store location, as any marketing is left to store location rather than advertising. Opting for a strategy of minimal advertising provokes the consumer into having to visit their stores. Zara is the most profitable brand of Inditex SA, accounting for 75% of the overall profit. Zara has remained focused on its core fashion philosophy that creativity and quality design together with a rapid response to market demands will yield profitable results. One of Zara’s many approaches is fast fashion. A contemporary term used by fashion retailers to acknowledge that designs move from catwalk to store in the fastest time (2weeks!) to capture current trends in the market. This "fast fashion" system depends on a constant exchange of information throughout every part of Zara's supply chain—from customers to store managers, from store managers to market specialists and designers, from designers to production staff, from buyers...
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...Pest Analysis On Zara - December 2nd, 2010 Zara is the flagship chain store of Inditex Group owned by Spanish company tycoon Amancio Ortega, who also owns brands such as Massimo Dutti, Pull and Bear, Oysho, Uterqüe, Stradivarius and Bershka. The group is headquartered in A Coruña, Galicia, Spain, where the first Zara store opened in 1975. It is claimed that Zara needs just two weeks[1] to develop a new product and get it to stores, compared with a six-month industry average, and launches around 10,000 new designs each year. Zara has resisted the industry-wide trend towards transferring fast fashion production to low-cost countries. Perhaps its most unusual strategy was its policy of zero advertising; the company preferred to invest a percentage of revenues in opening new stores instead. Zara was described by Louis Vuitton fashion director Daniel Piette as "possibly the most innovative and devastating retailer in the world." Zara has also been described as a "Spanish success story" by CNN.[2] POLITICAL The primary strength of the production is to support the organic sector particularly in agricultural level of the country and in the long run assist the economy. The organic carrot production can help the society in terms of income earning because it has a tradition of volunteerism, self-help and self-determination. Furthermore, the production promotes the philosophy and practices address consumers' interests in health and wellness, the environment and animal welfare. The producers...
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...ZARA COMPANY PROFILE Zara is a Spanish clothing and accessories retailer based in Arteixo, Galicia, and founded in 1975 byAmancio Ortega and Rosalía Mera. It is the flagship chain store of the Inditex group, The world's largest apparel retailer, the fashion group also owns brands such as Massimo Dutti, Pull and Bear, Uterqüe, Stradivarius and Bershka. It is claimed that Zara needs just two weeks to develop a new product and get it to stores, compared to the six-month industry average, and launches around 10,000 new designs each year. Zara has resisted the industry-wide trend towards transferring fast fashion production to low-cost countries. Perhaps its most unusual strategy was its policy of zero advertising; the company preferred to invest a percentage of revenues in opening new stores instead. This has increased the idea of Zara as a "fashion imitator" company and low cost products. Lack of advertisement is also in contrast to direct competitors such as Uniqlo and United Colors of Benetton. Zara was described by Louis Vuitton Fashion Director Daniel Piette as "possibly the most innovative and devastating retailer in the world." Zara has also been described as a "Spanish success story" by CNN. Amancio Ortega opened the first Zara store in 1975 in a central street in downtown La Coruña, Galicia, Spain.[4] Ortega named his store Zorba after watching the classic film Zorba the Greek, but apparently there was a bar that was called the same, Zorba, two blocks away, and...
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...company to compare Inditex is The Gap. Although The Gap has much higher revenues than Inditex (almost five times Inditex), it incurred a net loss, as opposed to Inditex, which achieved a 23%, return in investment. This is due to the extremely high costs of good sold for The Gap. This could be caused -at least partially- by the complete outsourcing of the production. They do not have enough control over the production costs. Although The Gap has larger market share than Inditex and has equity almost double that of Inditex, Inditex is much more profitable. 2. How specifically do the distinctive features of Zara business model affect its operating economics? Specifically, compare Zara with an average retailer with similar posted prices. Zara sources fabric, other inputs, and finished products from external suppliers. It has purchasing offices in Barcelona and Hong Kong. This gives Zara a competitive advantage towards the costs of goods sold, as it can purchase from both Europe and Asia according to prices. Buying more from China in the future might reduce even more the costs of goods sold. Inditex fully owns Comditel that managed dyeing, patterning and finishing of grey fabric of Inditex’s chains, and supplied finished fabric to external as well as in-house manufacturers. This...
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...1. How is strategy management illustrated by this case story ? Berdasarkan kasus tersebut, rencana zara yaitu untuk menciptakan fashion yang jelas dan fokus kepada pengertian akan fashion itu sendiri, teknologinya dan pemasarannya. Serta kemampuan untuk beradaptasi dengan tren yang berkembang dengan cepat. Inditex mengaplikasikan strategic management yang ada pada modul, hal tersebut terlihat jelas dari cara mereka yang pertama – tama menentukan tujuan atau goals terlebih dahulu. Tujuan mereka adalah untuk memproduksi ‘fast fashion’, kemudian berulah mereka merumuskan strateginya yaitu dengan menggunakan teknologi dan menghasilkan desain – desain yang baru dalam waktu 2 minggu. Setelah merumuskan, kemudian mereka berusaha untuk mengimplementasikan strategi tersebut dengan cara menggunakan bantuan teknologi computer untuk membangun proses desain yang lebih baik. Setelah itu, mereka mengevaluasi hasil dari strategi tersebut. Evaluasi tersebut dilakukan secara rutin terhadap desain – desain yang mereka kerjakan untuk mengetahui apakah strategi yang mereka terapkan berhasil. 2. How might SWOT analysis be helpful to inditex executive ? to zara store managers ? SWOT adalah metode perencanaan strategis yang digunakan untuk mengevaluasi kekuatan (strengths), kelemahan (weakness), peluang (opportunities), dan ancaman (threads) dalam suatu spekulasi bisnis. SWOT membantu manager untuk mengerti lingkungan dan kemampuan dari suatu perusahaan sehingga dapat mengambil keputusan dengan...
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...villages. In its center, a glass building sits amid acres of green lawn. It’s the headquarters of Zara, the company that introduced the idea of fast fashion some two decades ago, then developed a highly centralized and often studied—but rarely duplicated—design, manufacturing, and distribution system. The building is officially known as the Cube. Those who work there think of it as the brain. The Cube is central command for a fashion empire built on an unconventional idea: speed and responsiveness are more important than cost. Zara is renowned for its ability to deliver new clothes to stores quickly and in small batches. Twice a week, at precise times, store managers order clothes, and twice a week, on schedule, new garments arrive. To achieve this, Zara controls more of its manufacturing than do most retailers: About half its clothes are made in Spain or nearby countries. For Zara, its supply chain is its competitive advantage. Zara’s expanding global reach could finally put its Iberian Peninsula-based ecosystem to the test. Spain has always been its biggest market. But in 2013, China surpassed France to become its second-largest in terms of the number of stores (142). Expansion in China offers challenges for every retailer. And it could put the Spanish clothier in a singular predicament, because Zara is a global company that doesn’t act locally. “The secret to their success has been centralization,” says Felipe Caro, an associate professor at the University of California...
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...Identify the corporate strategy of the clothing retailer ZARA and discuss how the five operations performance objectives support Zara’s corporate strategy. In addition explain the external benefits of these five objectives. Zara is the clothing retailer the best known as a brand of Spanish holding group Inditex (Industrias de Diseno Textil). First Zara store was opened in 1975,in Spain by Inditex father and founder Amancio Ortegas Gaona. It was first step and strong foundation to his success. Zara became most successful brand in fashion industry and it keeps growing and expanding constantly. There are 1721 Zara stores in 87 countries all over the world. All offer great catwalk fashion clothes for reasonable prices. The triumph of this brand has his root in the business corporate strategy which Inditex group applied and based all operation within a company. ‘Corporate strategy concerns all units of the business, covers its business philosophy and ideology, including a basic set of guidelines regarding its business. This guidelines my take into consideration industries and technologies, product and services, raw materials and employee’s skills , countries and geographical locations, market and customers, quality and prices , margins and value –added profits and cash flow, volume and sizes , governmental regulations and export opportunities, or any operationalization of the corporate vision. (Eli Segev, p4 ) Zara’s strategy represent blend of Old Economy and NewTone...
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...In 1975, appeal giant Inditex set up the first Zara store in La Coruna, in Northwest Spain. By 2006, Zara had owned 723 stores which hold a selling area of 821,100 square meters around the world. With sales of 3.7 billion dollars in the business year 2005, Zara had developed into Spain’s the most famous fashion brand and the leading brand of Inditex (Kumar, 2006). Zara is one of the most outstanding apparel retail businesses in the world today. Although it is not the biggest, its marginal profits and rates of growth are leading the industry. The purpose of this essay is to analyze what sort of innovation Zara used on its way to success and make comparisons of competing products or processes with its competitors. By analyzing and comparing, it is obvious that the company's success depends on conducting a series of innovations at each one of the parts in the business: fashion-forward design, unique branding strategies, in-house production processes and centralized distribution system. Basically, this essay has been divided into four parts: the first part focus on describing how Zara makes its designs more innovative compare with other appeal retailers. Then, what sort of innovation used in their branding strategies will be discussed. Next, it will consider Zara’s innovation of production process and show an apparent difference of this process among Zara, H&M and the Gap. Finally, it will look at how Zara promotes innovation on their distribution process in to become more fast...
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...Zara – Rapid Fire Fulfillment Donald R. Lile BUS – FP3022_assessment 1_1 Fundamentals of Supply Chain Management 3/2/16 Author Note Correspondence concerning this paper should be addressed to Donald R. Lile, Student Capella University, 225 S. 6th St. Minneapolis, MN 55402 dlile@capellauniversity.edu Zara – Rapid Fire Fulfillment Ferdows, Lewis, and Machuca, (2004). Zara, a Spanish clothier has been successful because of the ability to sustain an environment that optimizes the entire supply chain rather than each step. This assessment will identify why the company’s supply chain strategy is successful. This research will also examine how the fast response and information infrastructure aids in this success. And finally, and analysis will be completed on how the company’s unique replenishment strategy satisfies customers. Supply Chain Strategy Ferdows, Lewis, and Machuca, (2004). In an industry where the trend is to outsource, Zara bucks the system. Instead Zara keeps almost half its production in house. Zara designs and manages its rapid-fire supply chain by reinforcing three principles: 1. Close the communication loop 2. Stick to a rhythm across the entire chain 3. Leverage your capital assets to increase supply chain flexibility Zara customers can always find new products on the shelves, but they are in limited supply. Zara designers create approximately 40,000 new designs each year. From these new...
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...Vertical Integration vs Outsourcing of Zara Written by Mohd Rahman October 04, 2014 “The original business idea was very simple. Link customer demand to manufacturing, and link manufacturing to distribution. That is the idea we still live by” -- Jose Maria Castellano Rios, Inditex CEO. 1 Introduction to Zara Zara is an icon in the fashion world and largest international fashion designing and manufacturing company. Zara is the flagship chain store of Inditex Group owned by Spanish tycoon Amancio Ortega, Inditex is one of the world's largest fashion retailers with eight brands and over 6,460 stores throughout the world (Ref-1). Headquarter of the group is in Coruña, Spain where the first store of Zara was launched in 1975. This paper will analyse the company and try to link its activities with supply chain strategy of vertical integration and outsourcing. Later will come to a conclusion that Zara is vertically integrated with justification and made recommendation for further improvement. Definition of Vertical Integration In strategic management, the term vertical integration describes a style of management control, when a company expands its business into areas at different points of the same production path. Vertically integrated companies in a supply chain are united through a common owner. Usually each member of the supply chain produces a different product or services, and the production combine to satisfy common need. In the following paragraph I will try to...
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...SUCCESSFUL MULTINATIONAL COMPANY IN CREATIVE BUSINESS Oleh: Stephani Herman - 0131111014 1. GOOGLE “Google’s mission is to organize the world’s information and make it universally accessible and useful.” Google adalah sebuah perusahaan kelas dunia yang sangat populer. Dengan Google, sekarang kita dapat mengakses hampir semua informasi yang kita butuhkan dengan cepat. Google membantu banyak siswa-siswi sekolah, sampai membantu meningkatkan bisnis di banyak negara. Google bergerak dalam bidang internet-related services and procuts, seperti search tools, advertising services, communication and publishing tools, dan lain-lain. facts Founded 1998 Founders Larry Page and Sergey Brin Incorporation September 4, 1998 Headquarters 1600 Amphitheatre Parkway Mountain View CA 94043 Resource: http://www.google.com/about/company/ Uniqueness Google dinilai sangat unik karena dapat menciptakan sebuah tren yang sangat marak dan dikenal dengan “tanya aja sama Om Google”. Google menyajikan informasi melimpah yang dapat diakses dengan cepat. Kreativitas yang dimiliki oleh Google sangat mencengangkan, melihat betapa mereka memperhatikan hal-hal kecil untuk menyanangkan pelanggan (seperti perubahaan tampilan logo Google setiap event). Selain itu, perusahaan ini selalu berinovasi dan terus berkembang agar tidak kalah dari kompetitornya, seperti Yahoo, Bing!, dan lain-lain. Influence to Their Nation Tidak hanya berdampak besar pada negara America, Google berdampak pada...
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