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 2 19

Abstract This case essay provides a business analysis on Zara--the most profitable and well-known fast fashion brand under the world’s largest fashion distributor Inditex Group. The analysis will evaluate Zara by using Porter Models, …show more content…
Zara has its own “commercials” that make decisions on what to design and produce. Zara owns a group of factories around La Coruna and near Spain to finish manufacture and production quickly. Zara is able to use this network to move a new design from concept through production and into the Distribution Center in as little as three weeks. And deliveries to the store usually take only one to two days via various transportation methods. Jeffrey Ballinger, a Harvard researcher and director of pressure group Press of Change, said that. “Zara has turned control over garment factories into a competitive advantage.” (CNN Business, 2001)
Zara’s differentiation strategy results in a low cost strategy. Zara uses a low cost structure than its competitors to cut cost. Unlike fashion brands that creates or used well-known designers or design groups that cost millions of dollars, and produce with exotic, rare to find fabrics. Zara takes its designs from its “commercials” and use easy to find textile to not only react to changes quickly but also cut the majority of the cost, therefore, Zara can always offers a lower price.
Zara’s generic strategies—both differentiation strategy and low cost strategy are due to Zara’s closeness to its customers. Zara’s designs are generated from preferences collected in the store, and Zara is able to satisfy its customer by taking full control of the operation

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