ZARA LOGISTIC

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ZARA CASE STUDY
Name :ShubashiniManiam
Student :ID11301111
Lecturer : David Rich

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Table of Contents
1.0 INTRODUCTION ......................................................................................................... 3
1.1 The global textile and clothing industry ...............................................................................................3
Zara Supply Chain Management Characteristic .................................................................................4
2.0 COMPARISON AND SIMILARITIES............................................................................... 6
2.1 Myer..........................................................................................................................................................................6
2.2 Dell.............................................................................................................................................................................7
2.3 Toyota.......................................................................................................................................................................9
4.0 CONCLUSIONS ........................................................................................................ 10
5.0 REFERENCE.................................................................................................................. 11

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1.0 INTRODUCTION
If one asked which is the most successful retailer in the world then surely Zara would be
the number one answer. One can imagine the sheer size of Zara from the number of the
country which it is operating, 59 countries which is a feat that is hardly can be matched
by other retailers. Despite such achievement most of the researched done on Zara was
published on Spanish and very little on English thus this research paper examine Zara’s
internationalization process and address its process gaps accordingly by reviewing
company documents such as annual reports. Before discussing case study of Zara, the
research paper starts off with global textile and clothing industry’s brief overview while
the main portion of the research paper will focuses on examining the key aspect of Zara’s
internationalization. The further breakdown the aspect will be focusing on international
marketing, market selection and entry strategies. In the final part of the research paper it
will discuss on the comparison between Zara and its two main competitors, Gap and
Toyota.
1.1 The global textile andclothing industry
One of the key driving for in the development in the clothing sector is the decision of
removing all of the import quotas in the clothing and textile industry which was made in
the January 2005 which allows World Trade Organization (WTO)’s members
unrestricted access to Canadian, American and the European markets (Keenan, et al.,
2004). For larger exporters like India and China this has created new opportunities for
them as their market share can be increased considerably and it creates challenges for the
members of European Union to be internationally competitive. Below are the
characterizing and restructuring of clothing and textile industry:
 The European textile and clothing industry is characterized by fragmented production
with a large number of small and medium-sized companies mainly located in
Italy, Great Britain, France, Germany and Spain (Nordas, 2004), whilst
distribution channels are highly concentrated (Stengg, 2001). 
 Increasing internationalization in the textile and apparel sector and the emergence of

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international competitors (Cerviño, 1998). Consolidation of the sector through
mergers, acquisitions (Dunford, 2004) and strategic alliances (Samiee, 1995). 

 Sub-contracting or delocalization of textile and clothing production to countries with
lower labor and transportation costs and reduced lead-time (Berkeley and Steuer,
2000). 
 Re-evaluation of the business models to adapt to the customers ́ changing taste
(KPMG, 2005). Fashion companies are becoming more flexible and vertically
organized, limited vertical integration being more frequent than complete
integration (Samiee, 1995). Adoption of new technology to expand productivity
and increase competitiveness (Berkeley and Steuer, 2000). 
 Democratisation of the fashion sector over the last decades (Mazaira, et al., 2003). Zara
has contributed greatly to this shift by offering the latest design at attractive
prices.

Zara Supply Chain ManagementCharacteristic
Zara is a vertically coordinated organization that claims distinctive levels of the inventory
supply. Zara own all of the different manufacturing to warehouse to retail outlets. This
permits Zara to optimize globally rather than locally. This sort of centralized choice
making diminishes the bullwhip impact on the general supply chain. Information is
additionally centralized permitting penetrability amongst the diverse layers in the supply
chain. Then again, Zara's vertical integrated strategy is not so much without its
disadvantages. With having just few manufacturing offices, Zara is not able to exploit
economies of scale keeping in mind the end goal to deliver a lot of attire at a generally
cheap unit cost. Likewise, with Zara's high renewal rate of store selection, it needs to put
resources into exceedingly adaptable machinery and extremely talented workforce

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keeping in mind the end goal to create clothing in a fast and effective way.
Another fascinating viewpoint about Zara's supply chain is that Zara does not estimate
the figure of coming season's items before production. Rather, their design group watches
the style patterns at that second and responds to purchaser's taste. All together for this
model to work, the supply chain has short lead times and Zara states that it has the
capacity go from design to last item conveyance in 14 days. Zara's vertical incorporation
structure makes this conceivable. Since a lot of its creation is in Spain, it has a unified
dissemination focus in Europe. Be that as it may, Zara confronts incredible weight to
grow universally. Ease and piece of the overall industry are the significant reasons why
Zara needs to extend universally keeping in mind the end goal to stay aggressive while
different organizations get to be worldwide. In any case, with the extension of Zara in
Asia and North America, stock administration issues will be more entangled and
unpredictable as more stores are included. Lead times to these extensive stores will be
longer and Zara would not be as compelling in responding to customer's tastes and
requests. Transportation expenses will likewise increment since the item needs to travel a
more extended separation to achieve its end clients. While Zara has an extremely
successful and productive model in its home European market, it should roll out
improvements in its supply chain with a specific end goal to grow to different markets
worldwide.
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2.0 COMPARISON AND SIMILARITIES
2.1 Myer
In Australia, Myer is biggest retail chain group with profitable 67 stores in strategic
locations. They have very much perceived brands furthermore upheld by advanced
online, mobile and digital platform
Myer is resolved to construct a socially dependable business and keep up manageability
in everyday business exercises. As indicated by them, manageability is about to boost the
positive results. They need to develop their business with manageable that consider
ecological, financial, moral and social effects of their business systems. They have built
up "five pillars" for manageability method. They are:
 Customer been rewarded with Myer reward card. They have been distributed
about 50 million cards.
 My Myer Team improve their development using individual reward.
 My community develop their relationship with society by community support
donation or contribution.
 My environment , Myer been so environmental by doing their social and
environment report and reduce their energy usage.

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2.2 Dell
Dell dependably Pay attention to client and convey what they need in their PC. They have
a motto "learn, listen and convey. That what Dell is about" .In 1990s, dell turn out to be
more proficiency on supply chain due to direct model. The immediate model is to make
to arrange as opposed to make to stock logic. This help them to diminish the process
durations to level. They took couple of days to conveyance instead of three or four week
which lead to its success. Dell is empowering its full production network potential
through a persistent improvement structure that is taking into account four stages
1. Keep Tracking what’s going on in the business
2. Design the supply chain to meet customer requirements
3. Make sure the enable the capacity
4. Stabilize the situation to make sure it works and will and will continue to keep
working. (Blanchard, 2012.)
In nowadays, there is heaps of rivalry in design retail business. Myer and David John are
extreme rivalry for Zara. There are numerous different contenders like Topshop, H&M,
and so forth in spite of rivalry in the business sector, Zara still able to make profit
successfully every year. Australian style retailer used to take no less than 12 weeks to 16
weeks to make new outline garments. Be that as it may, Zara can convey new plan in
consistently week. This powers all whole form retailer to outline their new item as fast as
could be allowed. Zara primary method is to deliver less item yet more variety. Also,
convey to all stores in 15 days. Zara don't have any season, they respond on client
request. They generally track the item deal and listen to client. This helps planner to roll
out new item with little improvements of style and shading of item. The majority of
design retailor conveys new items as indicated by seasons.
Myer is effective and costly fashion retailer. Both Myer and Zara principle is focus on
clients. Be that as it may, Zara dependably listens to client and conveys as indicated by

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client request. In comparing with Myer, Zara's primary favourable position its supply
chain technique. They can convey their item as fast as could be expected under the
circumstances. They convey new item in consistently week. Unsold items are send back
to headquarter and convey to store with high performing sales.
Dell is a successful and acclaimed on PC company. Dell dependably listens to client, find
out about it and convey the items what the client need. Zara is also a company that listen
to its client and convey the item that they need. Supply chain of Dell administration is
basic. There is association of client, dell and suppliers. Be that as it may, Zara has
inclusion of planner, producer, sources and circulation to all retail locations. Zara take
after vertical supply chain whereas Dell takes after horizontal supply chain. Dell
produces PC after client give their request. Their point is to lessen stock expense. They
intend to have no stockroom. However, Zara has got more distribution centre on the
grounds that they need to flow their articles of clothing. The designers of Zara depend on
client criticism and deals track to plan new item. Correspondence is solid point to Zara.
Dell has some shortcoming in term of correspondence. They just get input when they get
request from the client.
What made Zara to be successful is its special supply chain management. Other
unsuccessful retailer can take after its strategy to be effective. Their principle target is to
deliver less items with bunches of varieties. In light of that, they can convey new item in
at regular intervals. Each store gets twice stock in a week. They generally track its
business and listen to client. On the off chance that other organization just listens to client
input and has great inventory network administration then there is high opportunity to be
accomplishing objectives. For a few organizations, it will be difficult to convey new item
in at regular intervals.

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2.3 Toyota
Toyota is still thought to be a pioneer in the field of car generation despite the fact that it
has as of late needed to adapt to challenges (e.g. reviews, generation deficiencies brought
about by regular calamities) and had lost its overwhelming position in the car business to
General Motors and Volkswagen–at minimum incidentally. The improvement of ideas,
for example, Lean Manufacturing, All out Quality Management, Kaizen, Kanban, and so
forth., can be ascribed totally or if nothing else in part to Toyota. These ideas
coordinated in the supposed Toyota Production System (TPS) are currently viewed as
standard components of present day generation frameworks and are standard collection in
business administration. Be that as it may, with spotlight on the administration of creation
frameworks, they just speak to one of the foundations of the fruitful Toyota model.
Toyota presently works to a great degree proficient worldwide supply chains with global
creation destinations (in Japan, USA, France, Brazil, Argentina, Malaysia, Pakistan, and
so on.), all around disseminated suppliers and an overall merchant system. Toyota
actualized proficient creation (with TPS), as well as additionally supported proficient
outline and coordination of universally circulated worth included exercises. To achieve
this, Toyota has reliably built up its administration reasoning and the standards hidden
TPS and incorporated these in the Toyota supply chain.
Zara's assembling frameworks are displayed upon thoughts created in conjunction with
Toyota. The operations with a higher economy of scale (e.g. cutting, kicking the bucket,
marking and bundling) are directed in-house to upgrade cost proficiency. Other
assembling exercises including the work serious completing operations are proficient by
a system of 300 authority subcontractors. These subcontractors work only for Zara's
guardian organization, Inditex SA. They get fundamental preparing and mechanical,
money related and logistical backing as though they are secondary of Zara. The
framework is adaptable to conform all out limit contingent upon the change of interest
and creation is kept at level beneath anticipated deals to keep the stock moving. Zara's
fast and manageable development in a focused business is credited to its capacity to build

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up a dexterous supply chain which likewise fuses numerous incline attributes. There is an
example of overcoming adversity of a consolidated incline and lithe supply chain strategy
(Christopher, 2000).
4.0 CONCLUSIONS
In less than 30 years Zara has made itself from a local Spanish company to a global
brand and a successful international retail firm. This paper tries to enhance our
comprehension of the firm. The examination has analyzed the internationalization
procedure of the firm with an extraordinary spotlight on thought processes, section
choices and global promoting techniques. The primary downside that emerges in a
solitary contextual investigation is that of restricted legitimacy and representatives
which obliges the potential for making speculations (Creswell, 1998). Another
constraint is that the study was construct exclusively in light of secondary information.
On the other hand, this case is esteemed sufficient to give great understanding, and
build up the street for future studies. Despite the fact that the paper has made some
preparatory examinations in the middle of Zara and its two primary rivals, a more
exhaustive similar investigation of all the three organizations would uncover what is
being internationalized: Management aptitude and frameworks? Imaginative procedure
or solid retail brands (Brown and Burt, 1992)? Two ranges are of specific premiums in
the further study, to be specific the linkage between section procedures and the level of
institutionalization; the relationship between retail brand picture and situating in
distinctive markets.

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5.0 REFERENCE
 Andrew pearson. How a business can create sustainablecompetitive
advantage:the story of zara. Coaching business [pdf]. Available at <
http://www.coaching-business.co.uk/admin/resources/zara.pdf >
[Accessed at 20th July,2015]
 Ashley Lutz, 2012. Zara has fundamentally changed fashion and
there’s no going back. Available at:
<http://www.businessinsider.com.au/how-zara-is-changing-fashion-
forever-2012-11> [Accessed at 20th july, 2015]
 Dave Blanchard, 2012. Supply chain and logistics: Dell Taps into
innovation to reach emerging markets. Industry week. Available at: <
http://www.industryweek.com/supply-chain/supply-chain-and-
logistics-dell-taps-innovation-reach-emerging-markets > [Accessed at
17th July,2015]
 Dell, Supplier Accountability approachand standards. Available at:
<http://www.dell.com/learn/au/en/aucorp1/standards-for-
suppliers?s=corp > [Accessed at 17th July,2015]
 Inditex, 2013. Inditex Annual Report. Available at:
<http://static.inditex.com/annual_report_2013/en/ > [Accessed at 17th
July,2015]
 http://www.uniquebusinessstrategies.co.uk/pdfs/case%20studies/zarat
hespeedingbullet.pdf [Accessed at 17th July, 2015]
 Manasvi Somaiya,2012. Fashion Forward – Zara’s Supply Chain
Startegies. Available at:
<http://cmuscm.blogspot.com.au/2012/09/fashion-forward-zaras-
supply-chain.html > [ Accessed at 17th July, 2015]
 Myer, 2015. Sustainability at Myer. Available at:
<http://www.myer.com.au/p/about-myer/sustainability/ > [Accessed
at 17th July,2015]
 Myriam Robin, 2012. How zara is still producing record profits
despite the retail gloom. Available at:

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<http://www.smartcompany.com.au/leadership/26377-how-zara-is-
still-producing-record-profits-despite-the-retail-gloom.html >
[Accessed at 17th april,2015]
Partemian khatsig Alexan, Comparison of Dell and Zara supply chain.
Available at: <http://docslide.us/documents/comparison-of-dell-and-zara-
supply-chain.html > [Accessed at 08th August 15]