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KXO325 Business Logistics
Assignment 1 Due date: Monday 7 April 2014 at 11:55PM
This is the specification for Assignment 1 for KXO325 Business Logistics. The assignment introduces a case study and raises five (5) questions based on it. The answers to the questions are to be compiled in a short report. The report should be submitted to MyLo in the MS-Word document format, by Monday 7 April 2014 at 11:55PM. The assignment is worth 20% of the internal mark for this unit.
Case Study: Zara – Apparel Manufacturing and Retail1
Zara is a chain of fashion stores owned by Inditex, Spain’s largest apparel manufacturer and retailer, and a pioneer amongst fast fashion companies (usually companies which imitate the latest fashions with cheaper in-store versions). In 2007, Inditex reported sales of about 9.5 billion Euros from more than 3,600 retail outlets in 68 countries. As of 2013, it had in excess of 6,000 stores worldwide (1800 of which were Zara outlets) and revenues in excess of 13 billion Euros.
In an industry in which customer demand can quickly change, Zara has grown rapidly with a strategy to be highly responsive to changing trends with affordable prices. Whereas design-to-sales cycle times in the apparel industry have traditionally averaged more than six months, Zara has achieved cycle times four to six weeks. This speed allows Zara to introduce new designs every week and to change about 75 percent of its merchandise display every three to four weeks. Thus, Zara’s products on display match customer preferences much more closely than the competition. The result is that Zara sells most of its products at full price and has about half the markdowns in its stores compared to the competition.
Zara manufactures its apparel using a combination of flexible and quick sources in Europe (mostly in Portugal and Spain) and low-cost sources in Asia. This contrasts with most apparel manufacturers, who have moved most of their manufacturing to Asia. More
Assignment 1 Due date: Monday 7 April 2014 at 11:55PM
This is the specification for Assignment 1 for KXO325 Business Logistics. The assignment introduces a case study and raises five (5) questions based on it. The answers to the questions are to be compiled in a short report. The report should be submitted to MyLo in the MS-Word document format, by Monday 7 April 2014 at 11:55PM. The assignment is worth 20% of the internal mark for this unit.
Case Study: Zara – Apparel Manufacturing and Retail1
Zara is a chain of fashion stores owned by Inditex, Spain’s largest apparel manufacturer and retailer, and a pioneer amongst fast fashion companies (usually companies which imitate the latest fashions with cheaper in-store versions). In 2007, Inditex reported sales of about 9.5 billion Euros from more than 3,600 retail outlets in 68 countries. As of 2013, it had in excess of 6,000 stores worldwide (1800 of which were Zara outlets) and revenues in excess of 13 billion Euros.
In an industry in which customer demand can quickly change, Zara has grown rapidly with a strategy to be highly responsive to changing trends with affordable prices. Whereas design-to-sales cycle times in the apparel industry have traditionally averaged more than six months, Zara has achieved cycle times four to six weeks. This speed allows Zara to introduce new designs every week and to change about 75 percent of its merchandise display every three to four weeks. Thus, Zara’s products on display match customer preferences much more closely than the competition. The result is that Zara sells most of its products at full price and has about half the markdowns in its stores compared to the competition.
Zara manufactures its apparel using a combination of flexible and quick sources in Europe (mostly in Portugal and Spain) and low-cost sources in Asia. This contrasts with most apparel manufacturers, who have moved most of their manufacturing to Asia. More