ZARA : FAST FASHION

Presented By:Avinash ShawMohit ChandraPrabhat GuptaSumeet AgarwalSumona Goash

AGENDA

Company Overview

Zara Business Model

Key Success Factors

SWOT Analysis

Competitors Analysis

Conclusion

COMPANY OVERVIEW

About Zara

• Subsidiary of Intidex

• Founded in 1975 by Amancia Ortega and Rosalia mera

• Manufacturing and retailing of clothing & accessories

• Controls the supply chain, design, manufacturing and distribution of all products worldwide

Size & Location

• Zara has over 2000 stores strategically located in leading cities across 88 countries

• Produces approximately 450 million items each year

• Creative team of 200 designers produce around 18,000 different designs each year

Mission & Vision

• Focus on variability and uniqueness of the products

• Enhancing customers satisfaction by providing on time delivery in terms of quality and value

• Eliminate waste by being in the right place at right time

ZARA INDIA

Inditex and Tata Group joint venture

First Store was opened in Mumbai in 2010

18 outlets presently (Avg. sales 47 Cr per store)

First brand to cross 100 million sales mark

BUSINESS MODEL

Conventional Business Model

Zara’s Business Model

Supply Chain Reliant on outsourcing production Highly responsive, vertically integrated supply chain

Time to Market

High due to outsourcing. Industry avg. is 6 months

Lead time for new products launches are approx. 2-3 weeks

Marketing Ads primarily for range & assortments and various discounts offers

Ads only for yearly sales and to announces of new stores

Design Teams Design conceptualized by small elite team. Common for all segments

Dedicated teams for different segments

Product Life Span

Long life span because new products launch per year stood approx. 2000-4000

Short life span because of more product launches. On avg. 11K yearly

Sales Forecast

It is forecasted before arrival of new sessions

Not done due to flexible response time and supply chain

IT Spending 2% of revenue as IT applications are outsourced by vendors

0.5% of revenue due to in-house applications development

SUPPLY CHAIN STRATEGY

Responsive supply chain and logistics: Provides shipments globally within 24-48 hours

Vertical integration: Toyoto helped Zara to install JIT systems in its Spain

factories to make their process even more smoother

Communication: High communication from stores to headquarters means

lower inventories and shipments of correct merchandising

Fast inventory turnover: Small batches of merchandising can turnout products in as

little as 2 weeks

RETAILING

Cost Leader: Low price in sophisticated stores in prime location

Location: The stores are located in highly visible locations Zara invest in prime locations, including the premier shopping streets and upscale shopping centres

Display window: Attract shopper inside and allow them to see the type of garment offered.

KEY SUCCESS FACTORS

Utilizing the advantage of geographical condition

Vertical integrated distribution strategy

Production in small quantities, Scarce supply

Just-in-time manufacturing system

Frequent change in store layout

SWOT ANALYSIS

Strengths

• High Brand Value• Strong Distribution channel• Vertically integrated

(operation ,manufacturing)• low cost with most innovative

and fashionable designs

Weakness

• Low advertisement• Centralize Distribution

system• Ecommerce Visibility

Opportunities

• Growing branded apparel market

• Expand in new segments• Online marketing and E-

tailing

Threats

• Primary Challenge is high quality retail spaces

• Local and Global Competitors

• Large amount of consumers are switching to different brands

COMPETITORS ANALYSIS

Product Male, Female, Kids Male, Female Male, Female,

KidsProduction Outsourced Outsourced 60% in house

40% outsourcedTurn around time 56 days 56 days 2-3 weeks

Net Margins 9.6% 7.07% 10.47%

Global Share 1.6% 1.2% 1.4%

Price Value for Money Expensive Expensive

CONCLUSION

Responsive supply and logistics, vertical integration, communication and fast inventory turnover are some of Zara’s most unique and effective strategies

Having a centralized distribution and JIT production schedule creates more efficient process

High investment into technology enables Zara to operate the way they want

Thank You