For ZARA stores to be able to offer cutting edge fashion at affordable prices requires the firm to exert a strong influence over almost the entire garment supply chain.
Zara is a Spanish brand of clothing founded by the visionary Amancio Gaona and Rosalina Mera at 1975. It is one of the major selling brands of one of the biggest fashion retailer ‘INDITEX’. Zara is now available in 86 countries with total of 1,763 stores worldwide. In 1975 INDITEX established Zara’s 1st store in downtown A Coruna, Spain. Zara offers fashionable designs for men, women, and kids.
Zara is a Spanish brand of clothing founded by the visionary Amancio Gaona and Rosalina Mera at 1975. It is one of the major selling brands of one of the biggest fashion retailer ‘INDITEX’. Zara is now available in 86 countries with total of 1,763 stores worldwide. In 1975 INDITEX established Zara’s 1st store in downtown A Coruna, Spain. Zara offers fashionable designs for men, women, and kids.
The presentation has been prepared by the students of MFM(Master of Fashion Management), NIFT, Delhi as a part of the study on the Inventory Management of ZARA.
The presentation is create use as a material to the final case study presentation in Supply Chain class at Faculty of Engineering, Chulalongkorn University.
**All images use in the slide are from google images**
ZARA's external and internal enviroment. This presentation covers the main characteristics of ZARA, a general view of fast fashion indystry, Porters' Five Forces Analysis, competitors' external environment as well as a complete internal analysis regarding:competences, capabilities, resources, competitive advantage,value chain and outsourcing.
Zara- Case Study
Known for its fast, affordable fashion, retail chain Zara has built up a multi-billion dollar brand through listening and reacting quickly to its customers
The presentation has been prepared by the students of MFM(Master of Fashion Management), NIFT, Delhi as a part of the study on the Inventory Management of ZARA.
The presentation is create use as a material to the final case study presentation in Supply Chain class at Faculty of Engineering, Chulalongkorn University.
**All images use in the slide are from google images**
ZARA's external and internal enviroment. This presentation covers the main characteristics of ZARA, a general view of fast fashion indystry, Porters' Five Forces Analysis, competitors' external environment as well as a complete internal analysis regarding:competences, capabilities, resources, competitive advantage,value chain and outsourcing.
Zara- Case Study
Known for its fast, affordable fashion, retail chain Zara has built up a multi-billion dollar brand through listening and reacting quickly to its customers
Introduction to Business and Management 1 AssignmentTatianaMajor22
Introduction to Business and Management
1
Assignment One
Coursework: Oral Presentation | Case study
Module: Introduction to Business and Management Module Code: IFP6009
Date Issued: 4 October 2021 Due Date: Thursday, 4 November 2021 (UK)
Total Marks: 100% Pass Mark: 40% Weight: 25%
Format: PowerPoint slides and audio-visual recording Length: 15 minutes (max)
Delivery Mode: MS Teams and QM Plus
Task
Read the case study and answer the questions below.
Zara International: Fashion at the Speed of Light
Zara’s parent company Inditex is known for year-on-year strong sales gains. Low prices and a rapid response to fashion trends
have pushed it into the top ranks of global clothing vendors. The chain specialises in lightning-quick turnarounds of the latest
designer trends at prices tailored to the young—about $27 an item. Louis Vuitton fashion director Daniel Piette has described
Zara as “possibly the most innovative and devastating retailer in the world.”
Inditex shortens the time from order to arrival using a complex system of just-in-time production and inventory management that
keeps Zara ahead of the competition. Its distribution centres can have items in European stores within 24 hours of receiving an
order, and in North American and Asian stores in under 48 hours. “They’re a fantastic case study in terms of how they manage
to get product to their stores so quick,” said Stacey Cartwright, executive vice president and CFO of Burberry Group PLC. “We
are mindful of their techniques.”
The firm carefully controls design, production, distribution, and retail sales to optimise the flow of goods, without having to share
profits with wholesalers or intermediary partners. Customers win with access to new fashions while they are still fresh off the
runway. Twice a week Zara’s finished garments are shipped to physical distribution centres that all simultaneously distribute
products to stores worldwide. These small production batches help the company avoid the risk of oversupply. Because batches
always contain new products, Zara’s stores perpetually energize their inventories. Most clothing lines are not replenished.
Instead, they are replaced with new designs to create scarcity value—shoppers cannot be sure that designs in stores one day
will be available the next day.
Store managers track sales data with handheld devices. They can reorder hot items in less than an hour. This lets Zara knows
what is selling and what is not. When a look does not pan out, designers promptly put together new products. New arrivals are
rushed to store sales floors still on the black plastic hangers used in shipping. Shoppers who are in the know recognise these
designs as the newest of the new; soon after, any items left over are rotated to Zara’s standard wood hangers.
Introduction to Business and Management
2
Inside and out, Zara’s stores are designed to strengthen the brand. Indite ...
Intelligent transportation systems (ITS) are advanced applications which, without embodying intelligence as such, aim to provide innovative services relating to different modes of transport and traffic management and enable various users to be better informed and make safer, more coordinated, and 'smarter' use of transport networks
• Understand the current railway services in terms of
– Time(access, waiting, journey) , cost, convenient,
– Commuter perception toward railway services
– Positioning gaps and equity
• Provide the optimum transport solution for rail
passengers problems
America's gateway to the Pacific Rim.
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Tesco is the biggest retailer in UK now. Having operations in 14 countries with 2,291 stores spread globally, Tesco employs 296,000 people. Now their focus is on “Creating value for customers, to earn their lifetime loyalty” and strives to “be energetic, be innovative and be the first for the customer”. So the 21st customer has taken a great leap over “pile high, sell it cheap “strategy and demanding nature of the customer has forced Tesco to continuously improve
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They keep stock in warehouses for the demand and orders then company will distribute the stock for customers
Positioned at the edge of the Arabian Gulf, Hamad International Airports (HIA)tranquil waterside setting provides a perfect backdrop for its stylish architectural design, supported by advanced airport systems that make HIA a cutting-edge development
Galle corridor has been identified as the most important corridor taking transport volume, urbanization level, population density and network function into consideration.
It is estimated that in 2035 average speed on Galle corridor is estimated to be 12km/h unless the road is doubled in size meaning facilitate 4 lanes each. It is vital to identify that widening road alone will not solve this issue of high traffic congestion. Hence need for better transport services such as Bus priority lane, Bus rapid transit, modernized railways needs to be implemented to shift private vehicle owners into public transport thereby reducing traffic congestion
Warehousing is expensive. cost of the land, building, machinery, labor and the items stored in the warehouse –consumes bulk of money
How do the companies reduce this cost
Maximize the operation by
Streamlining the placement and picking of goods
Reducing the time goods are stored in the warehouse
Automating as much as possible to minimize labor costs
An autonomous vehicle capable of fulfilling the human transportation capabilities of a traditional car.
Autonomous vehicles sense their surroundings with such techniques as radar, lidar, GPS, and computer vision.
Advanced control systems interpret sensory information to identify appropriate navigation paths, as well as obstacles and relevant signage
Hierarchical Digital Twin of a Naval Power SystemKerry Sado
A hierarchical digital twin of a Naval DC power system has been developed and experimentally verified. Similar to other state-of-the-art digital twins, this technology creates a digital replica of the physical system executed in real-time or faster, which can modify hardware controls. However, its advantage stems from distributing computational efforts by utilizing a hierarchical structure composed of lower-level digital twin blocks and a higher-level system digital twin. Each digital twin block is associated with a physical subsystem of the hardware and communicates with a singular system digital twin, which creates a system-level response. By extracting information from each level of the hierarchy, power system controls of the hardware were reconfigured autonomously. This hierarchical digital twin development offers several advantages over other digital twins, particularly in the field of naval power systems. The hierarchical structure allows for greater computational efficiency and scalability while the ability to autonomously reconfigure hardware controls offers increased flexibility and responsiveness. The hierarchical decomposition and models utilized were well aligned with the physical twin, as indicated by the maximum deviations between the developed digital twin hierarchy and the hardware.
Immunizing Image Classifiers Against Localized Adversary Attacksgerogepatton
This paper addresses the vulnerability of deep learning models, particularly convolutional neural networks
(CNN)s, to adversarial attacks and presents a proactive training technique designed to counter them. We
introduce a novel volumization algorithm, which transforms 2D images into 3D volumetric representations.
When combined with 3D convolution and deep curriculum learning optimization (CLO), itsignificantly improves
the immunity of models against localized universal attacks by up to 40%. We evaluate our proposed approach
using contemporary CNN architectures and the modified Canadian Institute for Advanced Research (CIFAR-10
and CIFAR-100) and ImageNet Large Scale Visual Recognition Challenge (ILSVRC12) datasets, showcasing
accuracy improvements over previous techniques. The results indicate that the combination of the volumetric
input and curriculum learning holds significant promise for mitigating adversarial attacks without necessitating
adversary training.
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Cosmetic shop management system project report.pdfKamal Acharya
Buying new cosmetic products is difficult. It can even be scary for those who have sensitive skin and are prone to skin trouble. The information needed to alleviate this problem is on the back of each product, but it's thought to interpret those ingredient lists unless you have a background in chemistry.
Instead of buying and hoping for the best, we can use data science to help us predict which products may be good fits for us. It includes various function programs to do the above mentioned tasks.
Data file handling has been effectively used in the program.
The automated cosmetic shop management system should deal with the automation of general workflow and administration process of the shop. The main processes of the system focus on customer's request where the system is able to search the most appropriate products and deliver it to the customers. It should help the employees to quickly identify the list of cosmetic product that have reached the minimum quantity and also keep a track of expired date for each cosmetic product. It should help the employees to find the rack number in which the product is placed.It is also Faster and more efficient way.
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Supply chain of zara
1. 1 COMPANY PROFILE
1.1 COMPANY BACKGROUND
Zara is a Spanish brand of clothing founded by the visionary Amancio Gaona and Rosalina
Mera at 1975. It is one of the major selling brands of one of the biggest fashion retailer
‘INDITEX’. Zara is now available in 86 countries with total of 1,763 stores worldwide. In
1975 INDITEX established Zara’s 1st
store in downtown A Coruna, Spain. Zara offers
fashionable designs for men, women, and kids.
1.2 VISION AND MISSION
1.2.1 Vision
Zara is committed to satisfying the desires of our customers. As a result we pledge to
continuously innovations our business to improve your experience. We promise to provide
new designs made from quality materials that are affordable
1.2.2 Mission
Through Zara’s business model, we aim to contribute to the sustainable development of
society and that of the environment with which we interacts
1.3 VALUE
Fashionable, affordable clothes
Large choice of styles
Scarcity
Prime locations
Attractive prices
Up to date design
Creating sense of exclusivity
Fast delivery of new products and trends
2. 1.4 BUSINESS STRATEGY
Core competencies are resources and capabilities that create the firms competitive advantage
Core competencies of Zara
Fast and powerful design team, fashion brand image, quick production process,
frequent new products, and low cost
Production and Distribution
Maintain quality
Cost leadership
Can offer more product than other
Fast distribution system
Design
Ability to produce new products
Coordinate with R&D stores to get new trends
Feedbacks
Customers Response
MIS
Product distribution system
Improving inventory system
Stores ordering system
Marketing
R&D
Market and location of stores
Market penetration
Consumer behavior analysis
3. 2 ZARA’S SUPPLY CHAIN
The foregoing exploration of ZARA’s strategic position reveals something of its relationship to customers.
Before considering the companies logistics operations more depth, it is useful to examine its relationship with
suppliers,alongwithotherdefinefeaturesofitssupplychain.
Zara’ssupplychainmanagement
The most important thing in ZARA’s supply chain is its vertical integration where design,
product, distribution and retailing were integrated. The following chat shows its vertically
integrated process.
I. 200 fashion designers are in charge for the clothing line and among those they
select the most cost effective fabrics for designs.
II. Designs will be made into models when sent into factories. The computer then
design how to shear fabrics in order waste as little as possible
III. Fabrics will be sent to the factories
IV. After sewing products will sent back to the factory for button nailing, ironing
and inspection
V. Underground transmission channels connects all processes
VI. Label trademarks for different countries
4. 3.SupplychaindriversofZARA
Zara concentrates on three winning formulae
• Short Lead Time = More fashionable clothes
• Lower quantities = Scarce supply
• More styles = More choice, and more chances of hitting it
Right
They have structured their suppy chain drivers in order to release more styles in short lead
time
Logistical drivers
Facilities
Zara set up its own factory in La Coruña (a city known for its textile industry) in 1980. 50%
of the products Zara sells are manufactured in Spain, 26% in the rest of Europe, and 24% in
Asian and African countries and the rest of the world. So while some competitors outsource
all production to Asia, Zara makes its most fashionable items—half of all its merchandise—at
a dozen company-owned factories in Spain and Portugal, particularly in Galicia and
northern Portugalwhere labor is somewhat cheaper than in most of Western Europe.
Zara is the flagship chain store of Inditex Group and they have 4.607 stores in 74 countries.
There are over 2000 their own stores located across 88 countries.Zara tends to use franchisee
and joint ventures in countries that were small, risky, or subject to significant cultural
differences or administrative barriers that encouraged this mode of market participation.
Examples included Andorra, Iceland, and Poland in Europe and the Middle Eastern countries
that the chain has entered (where restrictions on foreign ownership ruled out direct entry).
Inventory
Zara’s parent company, Inditex, had the lowest inventory, as a percentage of annual sales,
compared with its nearest global competitors, such as Gap, Benetton, and H&M. Zara seems
fully aware of the adage:
“inventory = death.”
5. The firm therefore avoids building inventories in any part of its supply chain from raw
materials to end user. Inventory optimization models are in place to help the firm determine
how many of which items in which sizes should be delivered to stores during the twice a
week shipment ensuring sores stock just what they want. Zara designs around 10,000 new
models every year and replenishes ranges within every one of its 650 retail stores twice per
week, but in strictly limited quantities of stock. This ensures Zara’s brand promise to
customers of exclusivity, and also of design freshness. But it also avoids build-up of large
quantities of unpopular stock.
Transportation
The transportation system is based on software designed by the company’s own teams.The
time between receiving an order at the distribution center to the delivery of the goods in the
store is on average 24 hours for European stores and a maximum of 48 hours for American or
Asian stores. With this system its possible ship 45.000 folded garments per hour. The
facilities move about 2.5 million items a week. Trucks serve destinations that can be reached
overnight, to be more precise in Europe, while chartered cargo flights serve farther
destinations. The firm recently tweaked its shipping models through Air France-KLM Cargo
and Emirates Air, so flights can coordinate outbound shipment of all Inditex brands with
return legs loaded with raw materials and half-finished clothes items from locations outside
of Spain. Zara is also a pioneer in going green. In Fall 2007, the firm’s CEO unveiled an
environmental strategy that includes the use of renewable energy systems at logistics centers
including the introduction of biodiesel for the firm’s trucking fleet.
Cross functional Drivers
Information
Information is the key drier which cordinates all other drivers.Zara have come out of box
and practising more advance and reliable inforamation sources.Zara is in tune with its
customers. Trend information is entered into database in regular basis and designers check
the database to identify the latest fashions among the customers. Shop managers use PDAs to
check on the latest clothes designs and place their orders in accordance with the demand they
observe in their stores. Constantly updated information reduces the damage done by bullwhip
effect.
6. Sourcing
Zara sources fabric, other inputs, and finished products from external suppliers with the
help of purchasing offices in Barcelona and Hong Kong, as well as the sourcing personnel at
headquarters.
Comditel, a 100%-owned subsidiary of Inditex,that dealt with more 200 external
suppliers of fabric and other raw materials. Combitel manages (45%) the dyeing, patterning
and finishing of undyed fabric for all of Inditex’s chains.
Fabric is cut and dyed by robots in 23 highly automated factories, outside the
distribution center in La Coruña.50% of the items that Zara sells are manufactured in Spain,
28% in the rest of Europe, and 24% in Asia and the rest of the world. Zara experience
flexibility and more control by giving priority to in-house production.
Pricing
Zara offers unique, high quality, latest fashionable clothing to its customers at affordable
price.
Zara’s pricing method can be identified as,
𝑃𝑟𝑖𝑐𝑒 = 𝐶𝑜𝑠𝑡 + 𝑇𝑎𝑟𝑔𝑒𝑡 𝑀𝑎𝑟𝑔𝑖𝑛
Most of the Zara’s production is carried out inside of Spain where average labor cost is
higher than Asian countries. Therefore Zara has to charge premium price comparing with
other competitor who outsourced all of their production to Asian countries.
Zara’s change prices of the same product according to the region. As example, a coat
in Spain could be priced at 90 Euros, and the same coat in France could be priced at 118
Euros. Therefore, they use a demand oriented method for setting prices based on region,
taking advantage of what customers are willing to pay.
7. 4. Performance measurement of ZARA’s supply chain partners.
supply chain partner How to measure.
Supplier Lead time taken to supply materials
Average process overdue time
Average time to complete task
Availability
Factory Line yield and Die yield
Equipment utilization
Number of employees
Number of complains
Inventory Avg. annual inventory turnover
Number of employees
Equipment utilization
Avg. annual defect items
Transport Availability
Average time to complete task
Sum of deviation of time (e.g. in days)
against planned schedule of all active
projects
Number of vehicles
Avg. annual expense
Distributor Inventory value and carrying cost
Sales order fill rates
Vendor performance
Lost Sales
Returns due to improper shipments
and defective items
Customer Avg. return rate
Avg. revenue
Avg. sales
Customer satisfaction
Customer loyalty and retention
Shopper Avg. return rate
Avg. sales
Shopper satisfaction
8. 5. SWOT analysis of ZARA supply chain
Strengths
1. Zara has a well-established brand name worldwide. - Clothes are produced at a low
cost with the most innovative and fashionable designs
2. Low cost supply chain – they achieve it by better managing of the following criteria.
Product design, inventory management, logistic management, material management.
3. Just in time production – they copied designs from different sources and produce it
faster than the peers. Zara can get the product idea into market within 15 days.
4. Information system – use technology to identify the demand and get products quickly
to the market. Send online information to headquarters like selling trends customer
comments etc. input designs for CAD system it automatically feed up into cutting
machines.
5. Keeping low inventory – zara designed 10,000 new models every year and
replenishes every one of its 650 retail stores twice per week.
6. Centralized logistics and distribution – out sourcing from Spanish countries
7. Human resource management – hires young people and give fair incentives. Dressed
in fashionable way
Weaknesses
1. Over depends on European market – there market is heavily dependent on spain.
2. Only have one manufacturing and distribution center
3. Vertical integration – this leads to inability to acquire economies of sale
4. Lack of marketing communication – they do not spend much money on marketing
and advertising. They use only simple marketing strategies such as weekly change the
shop layout. But it not contributed to attract new customers. It only increase the
buying of existing customers.
Opportunities
1. Expansion beyond the Spain.
2. Establish a Asia logistics center
3. Online marketing
4. They can also enter into segments and expand those areas where they haven’t
9. Threats
1. Local and global competitors – competitors are reducing their lead time. Eg: H@M
has increased the frequency of ne items in stores.
2. Rising labor cost – as they highly depends on European labor market the price of
labor become increasing.
3. Currency value in Euro hurts global competitiveness.
4. There is a large amount of consumer switching taking place
6. Areas for improvement of Zara
In order to identify the areas that can be improved in Zara we can directly apply the SWOT analysis.
1. Use strengths to maximize opportunities
Here we can achieve the opportunities through our strengths
Expansion beyond the Spain through our strong brand name
Here Zara can use their strong brand name to reach new markets. Strong brand name
will attract new customers and Zara can compete with the local products with their
exclusive designs and premium products. Currently they are lack in presence in Asia.
Establishing Asia logistic center with linked to internal information systems.
Zara can establish a logistics center to serve Asian customers. Here management of this
center can be done effectively with their strong information systems.
Online marketing with effective information systems.
Zara can use marketing in the social media like Facebook , Twitter or Google plus.
They can evenly push themselves to have a website enabling online purchases.
Information systems will enable them to show available designs and the upcoming
designs.
More segmentation
Zara can go in to more segments of the clothing market. Specially kids clothing. With
their superior brand name it will be successful. Mars did the same by entering in to ice-
cream market from the chocolate market.
2. Use strengths to minimize threats
10. Competitors
Zara can use it’s strong brand name to compete with their competitors. By providing
exceptional customer service with unique designs , Zara can make loyal customers
while grabbing the market shares of competitors.
Rising labor cost
With the help of their Enterprise resource planning system and Electronic data
interchange systems
They can plan their labor resources effectively. Automation some of the material
preparation can negate the rising labor costs.
Currency value of Euro
With the number of stores in USA and Europe the currency fluctuations is a major
concern. By manufacturing in the respective countries can overcome this issue.
Customer switching
To avoid customers from switching Zara can use it’s brand name followed by
advertising. With their low cost inventory they can pass the benefit to the customers
thus increasing the switching cost of customers.
3. Use opportunities to minimize weaknesses
Reduce over dependence on European market by expanding to Asia
Currently 71% of the business is based on European countries. With the emerging
economies like China and India it would be advisable to expand to Asia. This will
decrease the centralization on European market and bring new revenue to Zara.
Have a logistic and manufacturing center in Asia
By having a second manufacturing center Zara can reduce dependence on the main
manufacturing center in Spain. This will reduce logistics and manufacturing cost while
increasing the flexibility of production.
Vertical integration minimize through Asian logistics center.
Vertical integration is a barrier to focus on core business. By having Asian logistics
center, Zara will not have to focus more on logistics
Increase marketing communication by online marketing.
Online marketing can be used to increase marketing communication. Zara can market in
the social media sites and putting advertisements on fashion sites. Having interactive
website tracking customer information can be a big leap in this process. Online
marketing will provide more customization to marketing and will be more effective.