Zara - spanish clothing company - Essay Example

? Zara Spanish Clothing Company Operating in around 000 stores in more than 60 countries, Zara Clothing Company is one of the major companies owned by the Inditex firm based in Spain. Inditex is a rapidly growing clothes retailer in Europe. Zara’s performance can be observed to be outstanding in the way it manages its operations timing in meeting the ever-changing demands of the customers. The company is in a “cutting edge”, capable of designing, manufacturing and delivering new styles of clothes and receiving “full price on 85 percent of its products”1. The present research focuses on a study on the Zara Spanish Clothing Company reflecting on the market that it serves, its competitiveness and the associations of its competitive measures with its supply chain facilities. Market Characteristics Where Zara Company Serves: Zara Clothing Company has grown very fast in Europe thereby increasing its share in the market that is characteristic of following the concept of “fast fashion”2. Manufacturing clothes in Spanish clothing companies involve higher costs of production than other companies that are competitors producing clothes in other countries like China and India. However, according to Zara, their productivity, lower costs of sales and distribution and flexibility pay off for the higher costs of manufacturing and production3. Considering the apparel market, studies reflect that Europe has a share of around 34 percent of the total market in comparison to United States’ 29 percent and Asia’s 23 percent. This signifies the rate of increasing population and their spending capabilities that tend to get affected by rising prices. The choices and demands of the customers also are rapidly changing in this market where companies like Zara are prevalent. The customers, particularly the young generation are more attracted towards new fashion styles and trends that includes strokes of other cultures as well. The market scenario has been changing over the years with customers demanding for newer fashions in lesser time. Zara with its timely operations system focuses on meeting the expectations of its target customers. The company also has its competitors like the Gap, H&M, and Benetton who are playing in the market of apparels.4 Zara’s Competitiveness in the Market: The Zara Clothing Company has been observed to achieve highly satisfactory business results as the company has its focus on its core competencies. This provides the apparel retailer with a competitive advantage over its competitors. Zara has been able to create its position in the market as it performs in a different manner than the other clothing companies. While other companies may be found to outsource their business, Zara has been distinct in following a vertical system of incorporation. The company is thus capable of creating powerful strategies on its merchandising. Moreover, the company is flexible and frequently introduces new products that are available to the customers within fewer times. The company meets the demands of the customers better than its competitors since it follows a unique system of quickly responding to customer preferences, that makes use of human resources as well as advanced information technology. The management and organizational culture of the company aid in the successful implementation of the strategies intended towards being a fast follower of fashion and reaching out to the target market. Zara’s competitive advantage over its competitors is also to a large extent dependent on the low costs of advertising of the company that reduces the total costs for the company enabling greater expansion at a global scale. Being able to target a large market across the world, Zara also has a global competitive gain over its competitors.5 Competitive Advantages of the Company and its Supply Chain: Zara Company has a centralized system of its sales and distribution. This provides the company with a competitive advantage over the supply chain facilities reducing the lead times of the products manufactured by the company. The products produced by the company are transported to the distribution center that effectively manages the cost owing to lesser distances between the distribution centers and the factory of the company. The distribution centre examines the goods and immediately transports to the retail shops making them available to the customers. To maintain the delivery speed the operations of the company are managed efficiently and the shipment facilities are accordingly planned and processed6. The capabilities of the company to successfully implement its operational strategies and accomplish the supply chain management processes have enabled the Zara Clothing Company to become one of the strongest apparel brands in the clothing business market. The company reflects the gain of global competitive advantage through successful supply chain management. Fast fashion is the current concept of the clothing business. Thus the company’s supply chain has a key role to play in effectively implementing the strategies of the company reaching out in time to the target market and gain competitive advantage over the competitors7. Conclusion: A study on the Zara Clothing Company reflects that the company has been maintaining a leading position in the apparel industry by following strategies that are different from other competitive companies in the same industry. Marketing its products in an ever changing market where the customers have newer choices and preferences and prefer to follow new trends and styles, the company focuses on meeting the demands of the customers and has a competitive advantage over its competitors. It plans its strategies to reduce costs and increase sales and the supply chain management of the company is also effectively managed that greatly enhances the company’s successful implementation of its competitive policies to meet the expectations of it consumers. References 1) Ball, Donald A., McCulloch, Wendell H., Geringer, J. Michael, Minor, Michael S. & Jeanne M. McNett. International Business 11. India: Tata McGraw-Hill Education, 2004 2) Craig, Amanda, Jones, Charlese and Martha Nieto. “ZARA: Fashion Follower, Industry Leader,” Business of Fashion Case Study Competition (2004): 1-5 3) Ghemawat, Pankaj and Jose Luis Nueno. “ZARA: Fast Fashion,” Harvard Business School (2006): 1-35 4) Hitt, Michael A., Black, J. Stewart and Lyman Porter. Management. India: Pearson Education India, 2009 5) International Transport Forum. Benefiting from globalization: transport sector contribution and policy challenges: introductory reports and summary of discussion: 25-27 October 2006, Berlin. France: OECD Publishing, 2008 Read More