Zara: Innovation and Zara Essay

Submitted By DavidG6
Words: 866
Pages: 4
Open Document
There are three steps to being a successful fashion company. Step one: Make clothes that people want to wear. Step two: Sell enough clothes for more than you made them. Step three: Do it again, and again, and again.

Easy enough to list. But each step is fraught with its own difficulties. First, style is fickle and fleeting. For example, the naked abs and lightly perfumed stores that once sold millions Abercrombie & Fitch shirts are now gauche reminders of last decade's trends (the stock is down 60% from its 2008 high). Second, distinguishing yourself is expensive. Savvy designers and memorable advertising cost a lot of money. Both are essential if you want to stand out in a crowded global marketplace for clothes, where you're dong battle with department stores, legacy brands, online upstarts, and boutiques.

Zara, the world's largest fashion retailer, has an innovative solution to both the style problem and the marketing problem, as Suzy Hansen explained in the New York Times magazine this weekend. Rather than hire world-class designers, Zara, which is based in Spain, politely copies them. Then it relies on a global network of shopper-feedback to tweak their designs. Corporate HQ absorbs thousands of comments and sends tweaks to their manufacturers in Europe and Northern Africa, who literally sew the feedback into their next line of clothes. The clothes are shipped back, and the stock changes so quickly that shoppers are motivated with a "now-or-never" choice each time they try on a blouse that won't be in-store in a few weeks. It's the user-generated approach to fast fashion.

That's the design challenge. How about advertising? Basically, Zara doesn't do it. There is no ad budget. Instead, the company spends ungodly amounts of money buying storefronts next to luxury brands to own the label of affordable luxury:

"The high street is really divided according to brand value," says [Masoud Golsorkhi, the editor of Tank, a London magazine about culture and fashion], who is also a consultant for fashion brands. "Prada wants to be next to Gucci, Gucci wants to be next to Prada. The retail strategy for luxury brands is to try to keep as far away from the likes of Zara. Zara's strategy is to get as close to them as possible."...

Zara stores cozy up to the most famous brands in the world to sing their luxury ambitions even as they profit off a brilliant, cheap, short supply chain that delivers similar fashion at a much lower price.

Supply chains sounds boring. But they're the secret to Zara's success. Rather than ship skirts and dresses from Chinese plants where they arrive in-store after the style has peaked, Inditex (the parent company) makes the bulk of its clothes in Spain and Morocco. A hemline suggestion goes from a customer's lips to a sales rack at record speed. The company, now the largest fashion retailer on earth, has grown overall sales by about 50% in five years to $17.5 billion. Its employees have gone from 80,000 to 110,000 in that time, despite being headquartered in a depressed Spanish economy, and selling predominantly to a very sick European continent.

ELEMENTS OF STYLE

The Zara Model is successful, global, and enviable. But one wonders: Is it really innovation?

Two weeks ago, Clayton Christensen, the man who coined the "Innovator's Dilemma", described three forms of innovation. First, "empowering" innovations create jobs by selling elite products to the masses. Much of the manufacturing revolution
Show More

Related Documents: Zara: Innovation and Zara Essay

Essay on Zara 2

Zara is recognised as the one of the world’s largest fashion companies specializing in reagards with women, men and children apparel .It is considered as the top band and was operated under different multinational distribution group. It was founded in 1975 in Galicia Spain.Basically zara sells clothing ,accessories ,shoes and allows customer to do one stop shopping centre with all thier needs .The company’s target market usually applied to the upper middle-class ,trendy ,women ages 16-35 who enjoy…

Words 1184 - Pages 5

Essay about Zara case study

Today Zara can replenish existing stock in little as two weeks. The company spends very little on advertising and use those funds to support higher cost of producing in Spain as its more costly effective to produce than Asia. This ensures the company they avoid inventory backlogs, allowing the company to product what the customers want and allowing themselves to being able to respond quickly to any market need. Lower inventory cost is key for Zara because as it enables Zara to manufacture…

Words 2287 - Pages 10

Leeza Operations Management 2 Essay

operational activities as every organisation is carrying out production or delivery of goods or services. Below we are going to assess the operational methods and strategies adopted by Zara to cope up with the business of fast fashion and yet lead in its business giving maximum satisfaction to its customers. Introduction to Zara’s Zara, the belonging to the Inditex SA, being the Spanish retail group, has maximum profits for the group, with first store in La Coruna, Spain, eventually now the headquarter city…

Words 3290 - Pages 14

Zara Strategy Essay

------------------------------------------------- Masters in Financial Management ------------------------------------------------- 2011 - 2012 ------------------------------------------------- ------------------------------------------------- Zara: responsive, high speed, affordable fashion ------------------------------------------------- Strategic Management Prof Dr Peter Verhezen Quynh Lan Nguyen Engaging in irregularities is severely sanctioned in correspondence with article…

Words 3419 - Pages 14

Zara's Supply Chain Managment Essay

Zara: IT for Fast Fashion | Individual Case Essay | | BUS 510 Management Information Systems Dr. Y. K. Mortagy | | Mengyang Chen | Fall 2012 | | Table of Contents Abstract 3 Case Summary 4 Business Analysis 5 Generic Strategy 5 Five Forces 7 Value Chain Analysis 9 Implementations of Porter Models 10 Solution Evaluation 11 Cost analysis 12 Benefit Analysis 13 Conclusion and Recommendations 16 References 17 Appendix 18 Exhibit 1 18 Exhibit…

Words 4758 - Pages 20

Zara Case Essay

and is expected to show high resistance in response to it. Even though Zara has a decentralized decision making process, the retailer’s IS department exercises absolute autonomy on the IT infrastructure and design. The fact that “only one person had left the department” in the past 10 years further confirms that the retailer is suffering from cognitive and action inertia, and thus creating a huge barrier for such…

Words 1470 - Pages 6

Zara Case Study Essay

Education Ltd. Company Case 19 Zara – the fast and furious giant of fashion One global retailer is expanding at a dizzying pace. It is on track for what appears to be world domination of its industry. Having built its own state-of-the-art distribution network, the company is leaving the competition in the dust in terms of sales and profits, not to mention speed of inventory management and turnover. Wal-Mart, you might think? No! Tesco, possibly? No! The company is Zara, the flagship specialty chain…

Words 1968 - Pages 8

Essay about ZARA Final Project Peer Review

INT 700: Final Project Global Strategic Analysis Of ZARA Milestone Three: Peer Review Presented by Muhammed Yusuf AY Background Globalization and internationalization made it clear that changed conditions in the global market necessitates a business strategy that is more responsive and compatible to innovations and differences. According to its website, Zara is one of the largest international fashion company owned by Inditex, one of the world’s largest distribution groups, manufactures, distributes…

Words 1872 - Pages 8

Essay on supply chain

northwest corner of Spain, and sold the goods himself. He called the shop Zara. Today, over 650 Zara stores in some 50 countries attract well-heeled customers in luxury shopping districts around the world, and Senor Ortega is arguably the richest man in Spain. The clothing company he founded, called Inditex, has been growing ever since he opened that first Zara shop. From 1991 to 2003, Inditex’s sales—70% of which spring from Zara—grew more than 12-fold from €367 million to €4.6 billion, and net profits…

Words 1464 - Pages 6

Swot Analysis Of Zara

Introduction Company Background Zara, a well-known reputed fashion designing and manufacturing company has been declared most efficient and market responding enterprise in UK’s fashion industry. . Zara was founded in the year 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 Mr. Amancio Ortega, the creator and initial organizer of Inditex is appreciated for his strategic decisions…

Words 4457 - Pages 18