1. What underpins the success of Zara in its chosen markets? Through analyzing this case, it obviously demonstrated that it has own successful supply chain. It shows on five performance objectives which refer to speed, quality, flexibility, dependability, costs. Firstly, it performed on the speed of Zara’s supply chain, Zara “has over 650 Zara stores in 50 countries” and rapidly changed fashion trend so that it seemingly difficult to deliver products to stores. However, Zara just spent 15 days from designing, producing to deliver. This rapid supply chain earned more marketing shares in the clothing market. Furthermore, Zara retail stores has own timetable for placing orders and receiving stock. It established the price before products are shipped. Hence, it possibly saves a large of time for Zara. It effectively regulates with design, procurement, production and distribution. Secondly, it showed on quality. Zara not only supply the good service, but also emphasized customers’ demands. It has three groups which have 200 designers, market specialists, procurements and production planners to certify products’ quality.
Thirdly, Zara provides good design products to customers, however it just cost low price. Looking at Zara’s net margin, in 2001, Zara firm was the highest net margin on sales among Benetton, H&M, Gap. Fourthly, Zara products also flexibility, products divided into three different volumes which are for men’s clothing line, for women’s and for children’s in order to attract all kinds of customers. Besides that, Zara measures “orders twice weekly” that showed on store managers in Europe orders by 3:00 pm Wednesday and 6:00 pm Saturday, and in other countries, the orders from 3:00 pm Tuesday and 6:00 pm Friday. If one store missed order on first day, they could order on the second. That is more flexibility to all stores. Furthermore, Zara added approximate 400 staffers during peak season to save operation time. And Zara uses...
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