Zara Case Study

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1. As completely as possible, sketch the supply chain for Zara from raw materials to consumer purchase.

First of all, a designer team in Arteixo, Spain sketches out the new styles and clothe lines. It does so after consulting with ‘commercials’ (the term for people who act as connection among the designers and the chain’s 2,800 global store managers). After that, the designer team decides which fabrics offer the best combination of fashion, quality and price. Then they electronically send the ready patterns to Zara’s factory, where a prototype is made. Huge rolls of fabrics are moved into the factory and placed on tables. Then a laser-guided machine cuts the fabrics according to the pattern. The cut textile is bagged and distributed to local sewing cooperatives. They return the finished garments to Zara’s factory within a week. After that, workers handle finishing touches to the clothes, such as adding buttons and details. Each garment is checked for quality. Once the checking is complete, the clothes are individually ironed. Then labels for each country are attached. After tagging, the garments are sent to Zara’s nearby distribution centre via a tunnel. At the massive centre all clothes are allocated first by country, then by individual store. This is done by a moving carousel of hanging rails. Using electronic bar codes each shop’s orders are carefully placed on the appropriate moving rail. Zara transports its products to the United States and Asia by plane in 48 hours. In Europe garments are distributed with trucks within a day. Finally, clothes are placed on show windows in elegant and spacious stores in the world’s ritziest shopping locations. (source: Capell, 2006)

2. Which type of vertical marketing system does Zara exhibit? List all the benefits that Zara receives by having adopted this system.

As Kotler (2008) states a vertical marketing system (VMS) is a distribution channel system in which manufacturers, wholesalers and retailers have...
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