Zara Business Model

Strategy, Organization ZARA perspective
To what extent is the Zara production model relevant for other industries? The Zara’s production model is relevant to other industries because it is out of the regular productions frames. It is focused on the product and the customer; it doesn’t separate one from other, for Zara the homework is not done until the costumer owns its product. Buying in Zara is taking a chance, Zara knows its market very well and knowing this they developed strategy that includes what to produced, what to show in the stores, how long to show the garments and how many of them should they have in the store, so the customer feels that he is buying a exclusive and fashionable product that could not be available for long. The process of production and delivery of a new garment in Zara takes only 15 days, they can do this in this time because unlike other companies they own most of the factories and they don’t use many outsourcing companies and if they outsource some work they make sure that they will be the main client of that company. They are also responsible for managing the logistics and distribution although Zara is not a company dedicated to these tasks. They don’t let any important task to others, they prefer to do everything and control it. Zara’s factories do not work at 100% to ensure the continuity of production in the event that it increases, and to supply the growing they have more than 50% of the fabrics ready to be painted and use to respond quickly to constantly change of the fashion and the market. Another Zara’s remarkable point is that they have three different lines which are men, women and children, it could be expensive but so they do not neglect any market sector and give special attention to each.

Many firms don’t follow Zara strategy, the reason is that their managers are afraid of the unorthodox strategy, because of all the risk it involves, Zara gambles a lot, and they are willing to lose clothes, although they paid a lot of money in manufacturing, transportation and location in stores more than their competitors. It is also a model that no many firms are able to apply because is necessary to have a lot of merchandise to change the collection so quickly and if it fails a lot of capital is implicated and its lost could mean the company’s bankrupt. Other firms can learn from Zara how to create expectation from the clients, even if it means taking the risk of taking out of the stores some merchandise that could be on sale; it is part of the game of attracting customers and awakening their consumerism in the target market.

Diana Andrea Martínez s0532750

Strategy, Organization ZARA perspective

Also how to integrate all the departments of the firm, they all work together and there is constant consultation between them in order to keep a optimum flow of information, be prepared for possible contingences and get the best results for the company.
To archive its position Zara has been doing good use of its assets; Zara’s managers don’t skimp in improving the production and keep the synergy of the company. Zara is a good example of how a company can work out the existing conventions. Its strategy of production shows how is it is possible setting standards and to be successful, the keys are keeping a rhythm, caring for the customer and the product in order to know play in the market.

Diana Andrea Martínez s0532750