group member:. company profiles introduction of businessbusiness model operational organization key...
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Group Member: 孙小萌 胡睿 江婷 蒋延 李穗尧 黄梓豪 何玉婷 徐星驰 李浩森
COMPANY PROFILES
Introduction of business
Business model
Operational organization
Key factors
Conclusion
COMPANY PROFILES
Zara has resisted the industry-wide trend towards transferring fast fashion production to low-cost countries. Perhaps its most unusual strategy was its policy of zero advertising; the company preferred to invest a percentage of revenues in opening new stores instead.
Introduction of business
This business is all about reducing response time. In fashion , stock is like food. It goes bad quick.
In highly perishable goods such as fashion products that are susceptible to seasons, gross margin is meaningless if the product does not sell as planned.
Inventory management
• Reduce inventory costs
• Contribute to operation
• Increase profit.
Business Model
• "fast fashion" system
In Zara stores, customers can always find new products—but they're in limited supply. There is a sense of tantalizing exclusivity, since only a few items are on display even though stores are spacious (the average size is around 1,000 square meters). A customer thinks, "This green shirt fits me, and there is one on the rack. If I don't buy it now, I'll lose my chance."
"fast fashion" system
A constant exchange of information throughout every part of Zara's supply chain
No layers of bureaucracy, its organization, operational procedures, performance measures, and even its office layouts are all designed to make information transfer easy.
Operational Organization
• single, centralized design and production center
three parallel, but operationally distinct, product families
•separate design, sales, and procurement and production-planning staffs are dedicated to each clothing line
stores
factori-es
men's clothing lines
children's clothing lines
Operation of the three channels
Key success factors
Key success factors
Lead time=More fashionable clothes
Scarcity=Lower quantities
Variety=More choice, and more chances of hitting it right
Key success factors
Lead time
Inditex Chief Executive José Maria Castellano ： ''This business is all about reducing response time. In fashion, stock is like food. It goes bad quick.''
can move from identifying a trend to having clothes in its stores within 30 days. In comparison, most retailers of comparable size or even smaller, work on timelines that stretch into 4-12 months.
accelerate the inventory turnover and reduce inventory cost
Zara's machinery can react to the report immediately and produce a response in terms of a new style or a modification within 2-4 weeks.
Key success factors
Scarcity
As with all things fashionable, the less its availability, the more desirable the object becomes.
not only reduce the cost, but also increase the revenue
The styles were changed every week, and the style liked by the customer would very likely not be available later.The added benefit of lower quantities is that if a style does not work well, there is not much to be disposed when the season-end sale does happen
Zara discounts only about 18 per cent of its products, roughly half the levels of competitors.
Key success factors
Variety
roughly 12,000 styles a year
There are new styles already waiting to take up the space
can offer more choices in more current fashions than many of its competitors
It delivers merchandise to its stores twice a week, and since re-orders are rare the stores look fresh every 3-4 days.
Create the customer’s preferences and loyalty
Key Enablers
Communication and IT
Proximity and Control
Market Research
Key Enablers
Market Research
React Rather Than Predict
Identify the innovators and follow the trend quickly
Combine speed and scale perfectly
Key Enablers
Proximity & Control
Location various business functions in close proximity
Early investment in raw materials, and direct or indirect ownership of processing and production capabilities
Allows the various functions to coordinate and take joint-decisions very quickly
Provide the capability to respond quickly to the market
Key Enablers
Comm& IT
Manage the constant interface of various functions
Management of the huge variety of production information
The Conclusion of Key Factors
Key Success Factors
•Lead Time
•Scarcity
•Variety
•Market Research
•Proximity and Control
•Communication and IT
ENABLE
Key Enablers
CONCLUSION
Quick decisions
A HQ regional managers collect and analyze the feedback.
Commercial team sits with designers to use theinformation to create newlines and tweak existing ones-deciding with thecommercial team on thefabric, cut, and price pointsof a new garment
Inventory Control
Fabrics from stock
Distribution
Line in Stores
Fleet to stores
Four critical information-related areas that give Zara its speed include:
Dyeing/Finishing(if required)
Production
Information Technology Keeps It Boiling
Keeping Costs Down
Management
Higher team productivity Reduced overheads Synchronies processes
Higher Topline
Innovative products Customer focusLower “lost-sales”-sales”
Lower ex-factory costsReduced development costsReduced quality rejections
Lower Product Cost
Lower Financial
Lower inventory and WIPPerformance-P based decision support
Value-C
hain Profitability
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