ZARA:fast fashion

Contents

Creation of ZARA

Environment Analysis

ZARA’s Strateies

Strategic Proposals

Creation of ZARA

1963-1974 Amancio Ortega Gaona founded Inditex1975 The first zara store was opened in Spain1976-1984 Spreading of zara store in Spain1985 Zara started to enter the overseas market (in Portugal)1989 Entering New York City, in USA1990 Entering Paris, in France1991-2004 Spreading to the whole world including Japan(1998)2007 Entering R.O.Korea in 30, April at COEX Mall and Lottte Young Plaza 

InditexChair man: Amancio Ortega GaonaLocation of Headquarter: Coruña in SpainAnnual profit: €94billion

Creation of ZARA

ZaraOne brand of the Inditex groupZara's profit makes up 75% of the Inditex.Representative success case of Time to Market

Date of Establishment

The first retail shop was opened in 1975

Number of Stores 1440 Stores in 77 Countries

Domestic Expansion(Korea)

3 Stores were opened at Coex,Lotte Department Store etc. in April30,2007(now 17)

Numbers of Employees 32,000employees (20,000 are stockman)

Creation of ZARA

Creation of ZARA

Fast fashionA contemporary term used by fashion retailers to acknowledge that designs move from catwalk to store in the fastest time (2weeks!) to capture current trends in the market

Material Team

Design Team

TestingStores

Production

Facility

SalesNetwork

An end-customer

ZARA’s Value Chain

External Environment

ZARA’s Environment Analysis

Competitor Analysis

Based on the most recent fashion trends presented at Fashion Week in both the

spring and the autumn of every year, these are designed and manufactured quickly and cheaply to allow the mainstream consumer to take advantage of current clothing styles

at a lower price

Zara’s SWOT Zara’s SWOT AnalysisAnalysis

Zara’s internal analysis

ZARA’s Internal Environment Analysis

1.ZARA’s Core Competence [Core Competency-Tree]

Vertical Vertical Systematization of Systematization of

Design and Design and Production ProcessProduction Process

Recreational Recreational ablility of ablility of FashionFashion

IT System for IT System for collecting collecting Customer Customer

InformationInformation

Real Real estateestate

Products meeting Products meeting the demand for fast-the demand for fast-changing and short changing and short life-cycled fasion life-cycled fasion

trendstrendsIncreasing Increasing

Property Values & Property Values & Increase asset, Increase asset, managementmanagement

Shirts, Shirts, Jeans, Jeans, JacketJacket

One-piece, One-piece, Skirts, Skirts, JacketJacket

Bags, Belts, Bags, Belts, PerfumesPerfumes

StoreStoress

2.Assessment for ZARA’s Core Competencies

3.ZARA’s Core Competence Analysis[VRIO]

[VRIO Framework]

YYeess

[VRIO Framework]

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3.ZARA’s Core Competence Analysis[VRIO]

[VRIO Framework]

YYeessYYeses

YYeess

3.ZARA’s Core Competence Analysis[VRIO]

[VRIO Framework]

YYeessYYeses

YYeess

YYeess

3.ZARA’s Core Competence Analysis[VRIO]

2

Competitiveimplications

High possibility for maintaining Competitive advantage continuously

EconomicPerformance Above Average

3.ZARA’s Core Competence Analysis[VRIO]

ZARA’s Success Factors[4 Core Competencies]

ZARA’s Success Factors

5 Keys to Success

1. Utilizing shops actively

2. Short period of Collection preparation

3. The principal of small quantity production

4. Creating the value from product differentiation

5. Utilizing the advantage of geographical condition

Active Use of Stores1) Changing the store layout in every

2weeks2) Located in the very center of the city3) Using the store to advertising4) Collecting the data of customers

ZARA’s Success Factors

Short period of Collection preparation

MarketResearch

Within1 day

Design

Needs

Production

Closely located with HQ

Transport-ation

Small mass of product

CustomersDisplay

Tight control

of stores

Spending only 2 weeks from The market research to the sales

(Normally it takes 6 months)

ZARA’s Success Factors

Small Quantity Production

Small Quantity

Batch Production

MaximizingProductScarcity

Push customers to

buy their product

immediately

Increasing the

frequency of visiting

the store of customers

Let customers open their

wallet

Continuous Production of New Product,Without relying on HIT Product

ZARA’s Success Factors

Creating the value from product differentiationBecause of the fast turnover ratio, customers are hard to find the same cloth in the street

Customers enjoy the scarcity like high price product with relatively economical price

New arrivals by regional groups

ZARA’s Success Factors

Utilizing the advantage of geographical conditionHiring the spanish and the portuguese

instead of people in the third world countries to utilize the advantage of

geographical condition

By positioning the design and production facility closely,

make the fast action to the marketsituation possible

Most of suppliers are located closely

ZARA’s Success Factors

ZARA’s Success Factors

5 Keys to Success

1. Utilizing shops actively

2. Short period of Collection preparation

3. The principal of small quantity production

4. Creating the value from product differentiation

5. Utilizing the advantage of geographical condition

Zara hits the global market

Weakness of Current Strategies

Strategic Suggestions