Vision of Zara: -Zara is committed to satisfy the desires of customers.

They pledge to innovate

business to improve experience. Also, they promise to provide new designs made from quality
materials which are affordable........................................................................................ 2
Mission Statement: Through Zaras business model, one aims to contribute to sustainable
development of society and that of the environment with which the interacts...............................2
Introduction of ZARA................................................................................................ 2
Zara retail stores values.......................................................................................... 3
Historical background of Zara retail store...................................................................4
Creation of Zara..................................................................................................... 5
ZARA marketing Mix................................................................................................. 5
Product: Zara manufactures and sells products such as clothes, shoes, cosmetics, and accessories
for men, children, and women..................................................................................... 5
Price: Zara provides for people with lower income so its prices are very reasonable that everyone
can afford it............................................................................................................ 5
Place: Zara is present in 30 countries at private locations. There are 600 commercial stores, and
Zara is selling its service through out the world................................................................5
Promotion: Zara focuses less on advertisement-based marketing, but more on internet online
marketing opportunities as Ecommerce strategy, social media and online shops........................5
Segmentation Of ZARA.............................................................................................. 5
ZARA targeting and price........................................................................................... 6
ZARA Brand Positioning............................................................................................ 6
Important Factors of Zara....................................................................................... 7
SWOT analysis:........................................................................................................ 7
Production & Distribution of Zara and Design.............................................................8
*Design:................................................................................................................... 9
Operations in Different Steps:-..................................................................................... 9
Forecasting.......................................................................................................... 10
Procurement........................................................................................................ 10
Production Planning............................................................................................. 10
Warehousing....................................................................................................... 11
Transportation..................................................................................................... 11
Customer Service................................................................................................. 12
Technology.......................................................................................................... 13
Conclusion............................................................................................................. 14

Vision of Zara: -Zara is committed to satisfy the desires of

customers. They pledge to innovate business to improve experience.
Also, they promise to provide new designs made from quality
materials which are affordable.
Mission Statement: Through Zaras business model, one aims to
contribute to sustainable development of society and that of the
environment with which the interacts.

Introduction of ZARA

Zara is one of the largest international fashion companies which belongs to Inditex, one of the
worlds largest distribution groups. Zara stores profit growth has changed from the net
income of $340 million on revenues of $ 3250 million in its fiscal year 2001.

*Introduction to Inditex: Global specialty retailer which he designs, manufactures, and sells
the apparel, footwear, and accessories for women, men, and children through its chains
around the world.

*Competitors of Inditex:

1) Gap, H&M and Benetton are Inditexs closest comparable international competitors.

2) Zara is more fashionable than other three and price is less than Benetton and Gap, but
higher than H&M.

3) Zara and H&M are more fashionable and price is lower.

Customer is at the heart of an unique business model which includes design, production,
distribution, and sales through an extensive retail network.

Mission of Zaras retail store is based on getting smaller where they would like the world to
dress in style, class, and experience an unique design weekly.

Zara is a Spanish clothing retailer

1700 stores

78 countries worldwide

Zara practices fast fashion trends moves from the runway to stores within weeks, as
opposed to months.

Zaras supply chain has undergone tremendous changes in order to sustain its competitive
advantage in todays market

Zara has continually maintained its mission to provide fast, affordable, and fashionable items

Zara retail stores values

1. To adapt quickly to fashion which the public demands.

2. To improve quality.

3. To sell a modern design which the public needs with quality at an affordable price.
4. To have a perfect distribution system, just in time

*Business values of Zara is based on:

1) Professional ethics

2) Commitment

3) Confidence

4) Loyalty

5) Creativity

*Key success factors of Zara:

1)

Short lead time: More fashionable clothes

2) Lower quantities: Scarce Supply

More styles: More choice, and more chances of hitting it

Historical background of Zara retail store

Amancio Ortega opened the first Zara store in 1975 in the central street in downtown A
Coruna, Galicia, Spain (Founder: Amancio Ortega and Rosalia Mera). The store featured lowpriced lookalike products of popular, higher-end clothing fashions. The store was a success
where Ortega began to open more stores throughout Spain.

During 1980s, Ortega started to change the design, manufacturing, and distribution process to
reduce lead times and react to new trends in quicker way what he called an instant fashions
which is the responsive supply chain which enables the delivery of new fashions as trend
emerges.

In addition, company started an international expansion through Porto, Portugal. The

international expansion was increased in 1990s, with Mexico in 1992.

Ortega has continued to grow in creating brands such as Pull & Bear, Bershka, and Oysho. He
acquired the groups such as Massimo Dutti and Stradivarius. Inditex is indeed the biggest
fashion group in the world.

Zara was described by Louis Vuitton Fashion Designer Daniel Piette as possibly the most
innovative and devastating retailer in the world.

Creation of Zara
1963-1974 Amancio Ortega Gaona founded Inditex
1975 The first zara store was opened in Spain
1976-1984 Spreading of zara store in Spain
1985 Zara started to enter overseas market (in Portugal)
1989 Ending New York City, in USA.
1990 Entering Paris, in France
1991-2004 Spreading to the whole world including Japan (1998)
2007 Entering R.O. Korea in 30. April at COEX Mall and Lotte Young Plaza

ZARA marketing Mix

Product: Zara manufactures and sells products such as clothes, shoes, cosmetics, and
accessories for men, children, and women.
Price: Zara provides for people with lower income so its prices are very reasonable
that everyone can afford it.
Place: Zara is present in 30 countries at private locations. There are 600 commercial
stores, and Zara is selling its service through out the world.
Promotion: Zara focuses less on advertisement-based marketing, but more on internet
online marketing opportunities as Ecommerce strategy, social media and online shops.

Segmentation Of ZARA
1) Womens: Zara produced a range with better fabrics and more womanly cuts. Zara Basic
essential fashion-fix pieces and fashion for younger women (Lightness, looser silhouettes and
silky tops).

2) Mens: Zara has produced the range of lightweight cotton tops and print shirts paired with
cotton twill shorts (Hints of ethnic Asian touches like robes and beads which provides hippiebohemian detailing).
3) Zara Kids: It produces unique and sophisticated range. It feels secure in finding unique, great
quality clothes with reasonable price point.
4) Zara footwears: Zara footwear is leading manufactures which offers wide array of ladies foot
wears which are beautifully crafted ( ladies sports sandal, formal sandal, fashionable sandals,
bellies, designer sandals, shoes, high heel sandals, flat sandals and flat bellies).

ZARA targeting and price

1. Zaras consumers are young, highly sensitive to latest fashion trends.
2. Zara sells apparel, footwear, and accessories for women, men, and children.
3. Zara offers fashion at affordable price by following the up to date fashion trends.

ZARA Brand Positioning

Zara among others has 3000 stores worldwide H & M, based in Sweden and has 2500; and
Mango is based on Spain which accounts for nearly 70% of inditexs income, and therefore
makes it the pillar of Amancio Ortegas-3rd riches man.
Zara controls and coordinates all the process and allows to reduce the times to minimum. Zara
provides the considerable number of products which are more than rival corporations in the
fashion industry.
Zara spends four to five weeks on the process of designing new product and getting the
finished products in the stores.

Important Factors of Zara

1) Political Factor:
Zara as one of the best retail brands worldwide has interactions with governmental policy for an
intervention in an economy and legal aspects in decision making processes.
Zara is required to understand the system of trade for importing the products and goods in different
countries.
2) Economical Factor:
Global growth increased to 3.6 % in first quarter of 2012, and Global trade is parallel with industrial
production in first quarter 2012 which in turn benefited trade-oriented economies, notably Germany
and those in Asia.
*Zara is aware of GST, Duties, and Tariffs.
3) Social Factor:
In regards to the social media trend development Zara should establish social media relationship to
satisfy customers demands due to change in generation choices.
Zara should provide direct social contact to customers as Newsletter, Facebook, Twitter, Pin-interest,
YouTube, Flickr, Web mobile or customer account.

SWOT analysis:

1. Strengths:

-cost leadership strategy -efficient distribution

-Information technology

-Fast delivery of new products and trends in the market.

2. Weakness: -Centralized distribution system

-Doesnt spend much money on advertising

-Zara has one manufacturing and distribution center in world.

3. Opportunity: -Global market penetration

-Online market

4. Threats: -Local competitors -Global competitors

-Zara based in Spain, and has no stores in Europe would dent in revenues.

-Distribution center in U.S.

Production & Distribution of Zara and Design

*Production and distribution of Zara:
1. Maintain quality and Cost leadership: 2. It can offer more products than other
3. Fast distribution system.
Zara cooperates with any channel of production all over the world so new improvements in
operation technology can be applied into Zara instead of keep using old ones.
It puts an effort to make more distribution centers which would enable Zara to be faster,
effective, and efficient in distributing their products to retailers.

 Store atmosphere: Zara has typical store layout, wide open spaces. It creates an enjoyment of
shopping in the store (positive emotions / comfortable feeling / impulse buying / spending
more than planned).
Zara line has its own section in the store which is consistent with the current store space
distribution.

*Design:
1. Ability to produce new products
2. Coordinate with R & D stores to get new trends.
3. Feedbacks
4. Customer response
The core design value is based on cooperating with vary range of designers so Zara can
maintain its competitive advantage to be the fast fashion but remain more and more
creative.

Operations in Different Steps:Inventory Management

Focus on reducing response time

Launched approximately 11,000 new items per year, compared to 2,000 - 4,000 for H&M and
Gap

Stock outs are not uncommon

Short shelf life attracts more customers more often

Zara holds 6 days worth of inventory, while H&M holds 52 days, and Spanish retailer
Cortefiel holds 94 days of inventory

Forecasting

Extensive market research

Quick input and output response

Frequent new styles

Near-term forecasts

Short product life cycles to reduce errors and improve current products

Customer feedback

Procurement

Keeps approx. half of its production in-house

Separate procurement staff for each clothing line

Procures basic textiles from global suppliers

Uncomplicated items are outsourced to China

Difficult items are produced in Zara factories and by local subcontractors

Most suppliers are located in close proximity to its distribution centers

Production Planning

Centralized Design & Production Centre

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Constant flow of data throughout the supply chain

Zara allows its retailers to change 40%-50% of its orders

Factories operate on a single-shift mentality, and can change quickly according to unforeseen
demands

Under produces products in order to create scarcity value

Warehousing

High-velocity shipping

Merchandise is selected, sorted, and routed to the lungs of the warehouse

Merchandise is delivered, Retailers hold products in local distribution centres or in retail store
stockrooms

High-velocity shipping relies on rapid information flows

Stores are electronically linked to the companys headquarters

Logistics system is based on two core concepts: speed and flexibility

Currently building a new state-of-the-art warehouse and facility complex in Zaragoza, Spain

Transportation

Effective and efficient transportation network

Fast delivery time

Coordinates with all aspects of logistics

Quick response in supply chain

Ability to distribute merchandise within 2 weeks

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Final step in order fulfillment

Promotes service quality

Customer Service

Founder: Amancio Ortega

Customer Service

Elements & Measures of Customer Service

Product Availability

Order Cycle Time

Logistics Operations

Response to Certain Events

Stock-outs

Extra Inventory

Future outlook

Performance Measurement

Dedicated to creating time to market efficiency

Order fulfillment and customer satisfaction

Tight linkages between demand and supply

Improve performance in accordance with changes in demand

Customer loyalty and brand recognition

Expansion into a global market

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Technology

Competition: 2% of revenue and 2.5% workforce in IT

Zara: 0.5% of revenue and 0.5% workforce in IT

In store:

handheld PDA

bi-weekly order, communication with HQ, feedback from customers, inventory.

In Store: DOS=old, slow.

Suggested: POS=speed, efficiency, connectivity.

WWW: Online stores open now. Better late than never.

iPad + Smart phone apps

In house: 200km tracks=60,000 items/hour

Short-term goals should see Zara expand into North American and Asian markets as well as
continued growth throughout Europe

In the future, Zara should increase its production outsourcing to Asian countries to reduce
costs

Overall, Zara seems to be heading in the right direction as the company is growing at a
tremendous rate and does not show any signs of slowing down

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Conclusion
Zara is successful international retailer less than 30 years.
Zara has transformed from Spanish local brand into a truly global brand.
Zara has the potential for the sustainable growth for its capability and competitive advantage
to experience the challenges of fashion industry.
The concept of Zara is keeping production, design, and production process which would
enable Zara to react to shifts in demands of consumers
Zara store should keep on innovating and re-inventing themselves to remain creative within
the fashion industry.

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