ZARAIntroductionContents- SWOT Analysis- New Operating Model- Operation EnhancementConclusion Premier 13 / Cairo
Zara 21st Century Task Force: Zara global & Franchise Culture | SearchValue Chain Expand Global Market- No inventory - DecentralizationOperational Efficiency Intensify Franchise- Vertical integration - Conditional integrationCulture Culture- Open communication - Spread innovation - 20th - - 21st -
Analysis Current System SWOT S W Overdependence on the Vertically integrated European market Short turnaround period Low cost competitiveness Strategic initiatives to expand international presence Local/Global Competitors Positive outlook for Asia- Economic slowdown in Euro Pacific apparel retail market O T
New Operating Model Spain HQ Vietnam Branch From Sourcing to Sale Same organization Planning - In-house & sub-contracting manufacture Marketing for trendy garments - create quality control organization Design Sourcing Sourcing Mfg Mfg Only Trendy Distribution Distribution Sales Sales
New Operating Model Supply management Local Supplier @Vietnam Low Cost Fabric (China / Vietnam) Material transportation fee ↓ Quality In-house Dyeing system Producing Equipments, Dye, etc from H.Q. *. Quality Management Team to Fabric/Assembling (like HQ) Local Garment Supplier Fabric In-House Manufacture pieces Out- Dyeing Cutting Assembly sourced H.Q. Dye Sewn & Assembled < Vietnam >
New Operating Model Manufacture/Logistics Manufacture at Asia Closer to the Asian Retailer & Quick Response – Geographical advantage Lower cost garments – Low labor cost & transportation fee Simplify Logistics @ Europe / Asia Europe & East America @Spain Pacific region (Asia, West America) @Vietnam Trendy & Basic Trendy Basic Manufacture Plants Distribution Center Retails
New Operating ModelFuture Expansion Establish New Base Camp for Southern Hemisphere Where? Chile What? Manufacturing, and distribution center Why? Lower labor cost, politically stable, pacific cost When? 2 years later How? Following the Vietnam system Brand Turnover Area Pull & Bear 161 154 Strategy to implement ZARA system to Sister Brands Massimo 184 182 Integrate manufacturing, distribution system Bershka 125 347 Increase hypermarket & department store sales Create & operate Inditex shop Stadi 67 212 Implement Zero inventory strategy ZARA 2,422 908
Operational EnhancementConditional Disintegration New Policy for New Market Adopt franchise policy for Asian market Maintaining Cultural Value Reinforce education system for franchise owner Free communication channel between local production manager & HQ HQ Edu/Design Edu. Feedback Trend Feedback VB FO Goods
Summary – Asian/Pacific market • Localized Plants (Trendy) & Logistics Model • Market coverage : Asia / Pacific (west USA) • Secure raw MaterialBenefit • Lower cost Manufacture & Distribution • Access easily “Market Trend” @AsiaConcern • Franchise : keep culture & reinforce communication
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