This presentation is created during Marketing Internship under Prof. Sameer Mathur, Indian Institute Of Marketing, Lucknow

1. Case Study Assignment : Marketing Internship under Prof. Sameer
Mathur, Indian Institute of Management Lucknow

2. • Zara is a Spanish clothing retailer
• 1700 stores
• 78 countries worldwide
• Zara practices fast fashion – trends moves from the runway to stores within
weeks, as opposed to months.
• Zara’s supply chain has undergone tremendous changes in order to sustain
its competitive advantage in today’s market
• Zara has continually maintained its mission to provide fast, affordable, and
fashionable items

3.  Zara has developed a highly responsive supply chain that enables delivery
of new fashions as soon as a trend emerges.
 Zara delivers new products twice each week to its 1,763 stores around the
world.
 Zara delivers new products twice each week to its 1,763 stores around the
world.

4. Inventory Management
• Focus on reducing
response time
• Launched
approximately 11,000
new items per year,
compared to 2,000 -
4,000 for H&M and
Gap

5. Inventory Management
• Stock outs are not
uncommon
• Short shelf life attracts
more customers more
often
• Zara holds 6 days worth
of inventory, while H&M
holds 52 days, and
Spanish retailer Cortefiel
holds 94 days of inventory

6. Forecasting
 Extensive market research
 Quick input and output
response
 Frequent new styles
• Near-term forecasts
• Short product life cycles to
reduce errors and improve
current products
• Customer feedback

7. Key success factors of Zara
 Short Lead Time = More
fashionable clothes
 Lower quantities =
Scarce supply
 More styles = More
choice, and more
chances of hitting it.

8. 8
Procurement
• Keeps approx. half of its production in-house
• Separate procurement staff for each clothing
line
• Procures basic textiles from global suppliers
• Uncomplicated items are outsourced to
China
• Difficult items are produced in Zara factories
and by local subcontractors
• Most suppliers are located in close proximity
to its distribution centers

9. Production Planning
• Centralized Design & Production
Centre
• Constant flow of data throughout
the supply chain
• Zara allows its retailers to change
40%-50% of its orders
• Factories operate on a single-shift
mentality, and can change quickly
according to unforeseen demands
• Under produces products in order to
create scarcity value
9

10. Warehousing
• “High-velocity” shipping
• Merchandise is selected, sorted, and routed to the “lungs” of the
warehouse
• Merchandise is delivered, Retailers hold products in local
distribution centres or in retail store stockrooms
• “High-velocity” shipping relies on rapid information flows

11. Warehousing
• Stores are electronically linked to the company’s headquarters
• Logistics system is based on two core concepts: speed and
flexibility.
• Currently building a new state-of-the-art warehouse and facility
complex in Zaragoza, Spain.

12. PRODUCTS
Zara stores have men's clothing and women's clothing,
each of these subdivided in Lower Garment,
Upper Garment, Shoes, Cosmetics and Complements,
as well as children's clothing (Zara Kids).
Currently their sizing on women's clothing
goes to a US size 12 or a UK size 14 .

13. Transportation
• Effective and efficient transportation
network
• Fast delivery time
• Coordinates with all aspects of logistics
• Quick response in supply chain
• Ability to distribute merchandise within 2
weeks
• Final step in order fulfillment
• Promotes service quality

14. Customer Service
• Founder: Amancio Ortega
• Customer Service
• Elements & Measures of Customer Service
• Product Availability
• Order Cycle Time
• Logistics Operations
• Response to Certain Events
• Stock-outs
• Extra Inventory
• Future outlook

15. Performance Measurement
• Dedicated to creating time to market
efficiency
• Order fulfilment and customer
satisfaction
• Tight linkages between demand and
supply
• Improve performance in accordance with
changes in demand
• Customer loyalty and brand recognition
• Expansion into a global market
EFFECTIVENES
S
EFFICIENCY
RESPONSIVE

16. 16
Technology
• Competition: 2% of revenue and 2.5% workforce in IT
• Zara: 0.5% of revenue and 0.5% workforce in IT
• In store:
• handheld PDA
bi-weekly order, communication with HQ, feedback from customers,
inventory.
• In Store: DOS=old, slow.
• Suggested: POS=speed, efficiency, connectivity.
• WWW: Online stores open now. Better late than never.
• iPad + Smart phone apps
• In house: 200km tracks=60,000 items/hour

17. Zara brands success
 Zara is one of the most well known brands in the world and is also one of the
largest international fashion companies. They are the third largest brand in the
garment industry.
 The Zara clothing line accounts for a huge bulk of its parent group’s revenues.

18. • Short-term goals should see Zara expand into North American and Asian
markets as well as continued growth throughout Europe
• In the future, Zara should increase its production outsourcing to Asian
countries to reduce costs
• Overall, Zara seems to be heading in the right direction as the company is
growing at a tremendous rate and does not show any signs of slowing down

19. Strengths
1.Cost leadership strategy
2.Efficient distribution
3.Information technology
4.Fast delivery of new products,and
trends
Weaknesses
1.Centralized distribution system
2.Doesn't spend much money on
advertising
3.Zara only has one manufacturing and
distribution centre in the world
Opportunity
1.Global market penetration
2.Online market
3.Distribution centre in us
Threats
1.Local competitors
2.Global competitors
3. Zara based in Spain and has a huge
no of stores in Europe will dent in
revenues.
SWOT
analysis

20. MIS (MANAGEMNT
INFORMATION SYSTEM)
MARKETINGOBJECTIVES
PRODUCTION
DESIGN
Strategies

21. DISCLAIMER
Created by Nishchay Misra, University Of Petroleum And Energy Studies
Dehradun, during Marketing Internship under Prof. Sameer Mathur, Indian
Institute Of Management Lucknow.
( See www.IIMInternship.com)
Prof. Sameer Mathur, IIM LucknowNishchay Misra, UPES Dehradun