a) Describe Za ra's current sourcing strategy.

How is it a competitive adva ntage for

the firm?

b) What spec ific cha llenges is a result of Zara 's rapid inventory turnover? What
portions ofZa ra's replenishmen t strategy make it easier to manage?

c) W ill Zara 's current sourci ng strategy continues to be useful as it ex pands? How
should this strategy c hange? W hat are the risks assoc iated with this new strategy?

Answer

a):Most other retailers (like America n chain GAP a nd Swedish retailer H&M)
completely outsource their production to factories around the w orld, most of them
in low cost Asian countries . The production which is not outsourc ed is owned or
c losely-controlled fac ilities-tremendous a mount of flexi biIity a nd control.

Answer b):Short lead time = more fashionable c lothes Low er qua ntities = sc a rce
supply More sty les = more c hoice, more c hances of hitting it rightMore designers =
rapid implementation of ideas Usually shorter routes Store receives ga rments w ithin
1-2 days severa l times a week.

Answer c ):

Concerni ng ZARA s impressive" growth during the last yea rs despite of their
differing strategy, itwould not make sense to ex pand the new strategy. Of ,...,... . ........ ,...
for the moment they profit by the higherma rgins (because of the lower prod This document is.
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