Innovative Business Model

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Innovative Business Model

Inditex, the company that owns Zara has an innovative business model that serves as the foundation of its strategic capability. The business model of Zara gives utmost importance to customer and continuous innovation. The organization considers the customer as the beginning and end of its business. However, Zara has pushed forward by giving the customer an active role from the start of the chain and turned it into the principal drive for its entire business model. The requests, comments and suggestions of the customers are considered by the design team which, based on this, create some proposals that are sent to stores immediately. The start of the company’s business model is the store. The store is important to the company’s business model because this is where informatio0n from the customers are received and collected. These information are sent to design centers and commercial departments in real-time. The response from the customer with new requests sets the process going. Zara stores receive new products twice a week , thereby giving a quick response to the customer.

Excellent Supply Chain Management

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: design, purchasing, production, distribution, and retailing. Zara produces clothes that resemble the latest couture creations, but they beat the designers to market. Because they use less expensive fabrics, they can also provide the product at a lower price. To achieve this type of competitive advantage, Zara controls most of its supply chain, by managing all design, warehousing, distribution, and logistics functions. Zara design the organization, operational procedures, performance measures and even office configurations to make information and product transfer easy. Because Zara’s merchandise is produced in small quantities, provided on predictable schedules,...
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