A case study analysis of Zaras Operations Strategy

Jun 21st, 2015
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Zara is the largest division and flagship brand of the Spanish retail group Inditex [1] . It sells up-to-the- inute ‘fashionability’ at low prices, in stores that are clearly focused on one particular market.

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A case study analysis of Zaras Operations StrategyZara is the largest division and flagship brand of the Spanish retail group Inditex[1]. It sells up-to-the-minute fashionability at low prices, in stores that are clearly focused on one particular market. (Slack, Chambers, Betts, & Johnson, 2006)The first store opened by accident in 1975 due to a large pyjamas order cancellation. This typically can be said to be an emergent strategy as the Zara store today was not an intended strategy.[2]As described in a case study of Zaras supply chain, the company is vertically integrated, controlling most of the processes in its supply chain. On the average, 50% of its products are manufactured in Spain, 26% in the rest of Europe and 24% in Asian countries. Zara outsources products of high labour intensive processes but maintains in-house capital intensive processes, protecting knowledge and know-how. It takes less than two weeks for a skirt to get from Zara's design team in Spain to a Zara stores in any part of the globe, as much as 12 times faster than the competition. And with shorter lead times, Zara can ship fewer pieces, in a greater variety of styles, more often and they can more easily cancel lines that don't sell as well, avoiding inventory backlogs. (Upadhyay, 2009)Zaras quick response capacity is made possible by the fact that it controls the 3 main stages of its operations that define the competitive edge of the company: design, manufacturing and dist

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