Case Study Zara

Topics: Inditex, Case study, Fast fashion Pages: 22 (3256 words) Published: December 14, 2012
Christian Deing Simon Luyken Julika Reusse Sebastian Stratmann Anna Worster 1. What are the sources of Zara’s competitive advantage? What is unique compared to H&M, The Gap and Benetton?

competitive advantage
Competitive advantage is defined as: • a performance feature, which is silhouetted against other competitors • has to be tenable and economic • is able to reach dimensions like price, time and quality, e.g. cost advantage or differentation advantage

Brand ZARA Bershka Pull and Bear Massimo Dutti Stradivarius Oysho Number of stores 1501 573 567 461

444 363 ZARA Home Uterqüe Total 237 24 4.170

• 1501 stores in 71 countries in 2008 • Employees 25.000 • Employed €1,050 million of the company´s capital in 2001 72% of the total capital of INDITEX

•Revenue of €6,264 million in 2007
67% of the total of INDITEX

• Headquarter in Arteixo, outside La Coruna • Manufacturing most of the fashion-sensitive products internally • ZARA´s designers produce about 11.000 distinct items during the year competitors: 2000-4000 items • Products are shipped to well-located stores twice a week • Finished goods in stores within four to five weeks (entirely new designs) in two weeks for modifications of existing products

H&M The GAP Benetton

stores countries employees designers revenue

1.700 33 68.000 100 €9.6 billion

3.100 19 152.000 n.s. $15.8 billion

5.500 120 8.000 300 €2.085 billion

Comparison: ZARA vs. H&M
-vertical integration ⇒Short lead times -all production outsourced ⇒Long lead times

- engages many designers -60 % fewer designers ⇒Originate designs in a few weeks - one distribution center ⇒Better survey over inventory ⇒ low costs - expand very fast (stores in 39 countries) - stores as a „face to the world“ -a distribution center in each country ⇒High costs -expand very slow (stores in 8 countries) - no focus on store makeups

⇒Competitive advantage

Comparison: ZARA vs. Benetton
- three different modes for expansion: 1.Franchise systems 2.Company owned stores 3.Joint Ventures -one main mode for expansion: 1. Licensees

⇒Competitive advantage

Comparison: ZARA vs. GAP
- vertical integration ⇒Short lead times - fast expansion in 39 countries - outsourced all production ⇒Long lead times - slow expansion in 5 countries

⇒Competitive advantage

What‘s unique about ZARA?
- freshness (fast production and distribution to offer the latest fashion)

-Change 75 % of the merchandise on display every 3 or 4 weeks ⇒The frequency of customer visits rises ⇒Scarcity

-few advertisement ⇒Customers need to visit stores to get the newest fashion ⇒Save costs for publicity

Case Study 2:

ZARA: Fast Fashion

Group 7: Matthias Freese, Thorsten Hiedels Kirstin Jansen, Sabine Kürten Aleksandra Ludwa, Jennifer Montag Johanna v. d. Asseburg

Case Study 2: ZARA: Fast Fashion, Group 7


Table of contents
1 Introduction 2 Zara’s Business System 3 Pros and cons of Zara’s activity architecture with regard to The Gap, H&M and Benetton and in light of the changing environment

Case Study 2: ZARA: Fast Fashion, Group 7


1 Introduction
Inditex: - umbrella group of Zara and 5 other apparel chains - founded in 1963 in Galicia, Spain Zara: - headquarters in Arteixo, Spain - till 2002: 507 stores in 42 countries - position: “medium quality fashion clothing at affordable prices“ - competitors: The Gap, H&M, Benetton


Case Study 2: ZARA: Fast Fashion, Group 7


2 Zara‘s business system
Activity circle:

Case Study 2: ZARA: Fast Fashion, Group 7


creative teams different sources for information: store managers, consumption information system, TV, internet, industry publications, film, trend spotters, ready-to-wear fashion shows first sketches about nine months before start of a season presentation in certain key stores determined prices


Case Study 2: ZARA: Fast Fashion, Group...
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