Case Study

1. ZARA : FAST FASHION
Presented By:
Avinash Shaw
Mohit Chandra
Prabhat Gupta
Sumeet Agarwal
Sumona Goash

2. AGENDA
 Company Overview
 Zara Business Model
 Key Success Factors
 SWOT Analysis
 Competitors Analysis
 Conclusion

3. COMPANY OVERVIEW
About Zara
• Subsidiary of
Intidex
• Founded in 1975
by Amancia Ortega
and Rosalia mera
• Manufacturing and
retailing of clothing
& accessories
• Controls the supply
chain, design,
manufacturing and
distribution of all
products worldwide
Size & Location
• Zara has over 2000
stores strategically
located in leading
cities across 88
countries
• Produces
approximately 450
million items each
year
• Creative team of
200 designers
produce around
18,000 different
designs each year
Mission & Vision
• Focus on variability
and uniqueness of
the products
• Enhancing
customers
satisfaction by
providing on time
delivery in terms of
quality and value
• Eliminate waste by
being in the right
place at right time

4. ZARA INDIA
 Inditex and Tata Group joint venture
 First Store was opened in Mumbai in 2010
 18 outlets presently (Avg. sales 47 Cr per store)
 First brand to cross 100 million sales mark

5. BUSINESS MODEL
Conventional Business Model Zara’s Business Model
Supply Chain Reliant on outsourcing production Highly responsive, vertically
integrated supply chain
Time to Market High due to outsourcing. Industry avg. is 6
months
Lead time for new products
launches are approx. 2-3 weeks
Marketing Ads primarily for range & assortments and
various discounts offers
Ads only for yearly sales and to
announces of new stores
Design Teams Design conceptualized by small elite team.
Common for all segments
Dedicated teams for different
segments
Product Life
Span
Long life span because new products launch
per year stood approx. 2000-4000
Short life span because of more
product launches. On avg. 11K
yearly
Sales Forecast It is forecasted before arrival of new
sessions
Not done due to flexible response
time and supply chain
IT Spending 2% of revenue as IT applications are
outsourced by vendors
0.5% of revenue due to in-house
applications development

6. SUPPLY CHAIN STRATEGY
 Responsive supply chain and logistics:
 Provides shipments globally within 24-48 hours
 Vertical integration:
 Toyoto helped Zara to install JIT systems in its Spain factories
to make their process even more smoother
 Communication:
 High communication from stores to headquarters means lower
inventories and shipments of correct merchandising
 Fast inventory turnover:
 Small batches of merchandising can turnout products in as
little as 2 weeks

7. RETAILING
 Cost Leader: Low price in sophisticated stores in prime
location
 Location: The stores are located in highly visible
locations Zara invest in prime locations, including the
premier shopping streets and upscale shopping centres
 Display window: Attract shopper inside and allow them
to see the type of garment offered.

8. KEY SUCCESS FACTORS
 Utilizing the advantage of geographical condition
 Vertical integrated distribution strategy
 Production in small quantities, Scarce supply
 Just-in-time manufacturing system
 Frequent change in store layout

9. SWOT ANALYSIS
Strengths
• High Brand Value
• Strong Distribution channel
• Vertically integrated (operation
,manufacturing)
• low cost with most innovative and
fashionable designs
Weakness
• Low advertisement
• Centralize Distribution system
• Ecommerce Visibility
Opportunities
• Growing branded apparel
market
• Expand in new segments
• Online marketing and E-
tailing
Threats
• Primary Challenge is high
quality retail spaces
• Local and Global
Competitors
• Large amount of consumers
are switching to different
brands

10. COMPETITORS ANALYSIS
Product
Male, Female,
Kids
Male, Female
Male, Female,
Kids
Production
Outsourced Outsourced
60% in house
40% outsourced
Turn around time 56 days 56 days 2-3 weeks
Net Margins 9.6% 7.07% 10.47%
Global Share 1.6% 1.2% 1.4%
Price Value for Money Expensive Expensive

11. CONCLUSION
 Responsive supply and logistics, vertical
integration, communication and fast inventory
turnover are some of Zara’s most unique and
effective strategies
 Having a centralized distribution and JIT production
schedule creates more efficient process
 High investment into technology enables Zara to
operate the way they want

12. Thank You