Zara Case

Topics: Competition, Per capita income, Competitor analysis Pages: 4 (1236 words) Published: May 18, 2011
Competition Strategy

ZARA-case

1.a:
Strengths
-Internalized cross-border functions,
-Affordable prices
-Quick response
-Strong real estate network
-Wider vertical scope than competitors, owned much of its production and most of its stores. -Galica’s geographical position from the prespective of transport costs -Originated design and finished goods in stores within four and five weeks in the case of entirely new designs and two weeks for modifications of existing products. -Just-in-time system, lower warehouse and inventorie costs

-Positive “word of mouth” advertising
-The stores were typically located in higly visible locations -Low leasing cost
-Designer-style garments and accessories with broad, rapidly changing product lines; relatively high fashion content; and reasonable but not excessive physical quality. -Zara placed more emphasis on using backward vertical integration to be a very quick fashion follower than to achieve manufacturing efficiencis by building up significant forward order books for the upstream operations.

Weaknesses
-Lacked Italy’s fully developed thread-to-apparel vertical chain (including machinery suppliers), its dominance of high quality fabrics (such as wool suiting) , and its international fashion image. -Centralized logistics model might ultimatey subject to diseconomies of scale. -Little advertsing did not create too strong prefence for the Zara brand Opportunities

-Cross-border homogeneity in fashion
-The advantage of outsourcing due to its labor intensive feature, to lower cost -Proximity matter due to its effect of reducing shipping costs and lags, -MFA (Multi-Fiber Arrangement) avoided market from fake products -The increased concentration of apparel retailing in major markets -Quick respond had led to significant compression of cycle times, enabled by improvements in information technology and encourged by shorter fashion cycles and deeper markdowns, particularly women’s...
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