Zara Business Essay Example | Topics and Well Written Essays - 750 words

Zara Business - Essay Example From there it expanded into 79 countries with 1,830 stores all across Asia, Europe, Africa and America (Qureshi, Store Wars: Zara and Mango, 2012).Its main focus has always been creativity, quality of design and rapid response time. Zara’s main target customers have always been young, price-conscious people who are very sensitive to latest fashion trends. According to the article ‘Analyzing Zara’s Business model’ its product line is divided in to 60% for women, 25% for men and 15% fast growing children (Analysing Zara’s business model , 2011). Main customers of Zara are middle class urban women for whom fashion means everything. The customers of this particular brand wants trendy, fashionable and unique outfits at an affordable price and up to date with the new up coming fashion trends. Another unique characteristic of this particular brand is that they take very less time in identifying and bringing their products to shelves that is with in 30 days where as others may take around 3-4 months (Analysing Zara’s business model , 2011). This is possible mainly due to their control on garment supply chain from design to retail unlike many other competitive stores. It is possible as most of the manufacturing is being done in-house. 50% of the products are produced in house where as 46% are framed out into ready to cut pieces (Roux, 2002) Zara’s core mission has always been a blend of creative, quality and rapid response to market demands. To achieve this a business model was framed that depended on two main points. One being quick response to changing fashion and second being involvement of employees at a large scale. For instance a store manager could decide which clothes to put on sale in that particular store according to the response of customers shopping there. The vaiety of clothing also becomes a main selling point of the brand. In the article Reign of Spain the author talks about how a model never stays in the s hop for more than four weeks. This increases the visists of the customers, for Zara’s its 17 times a year where as for other similar competitive stores its only 3 to 4 times a year (Roux, 2002). In around four to five weeks new collections are available. It’s designer team comprises of around 2 thousand designers which produce 12,000 models each year for sale which are designed kept in mind customer preferences, wishes and demands. Since every four weeks the stores are hit by new models the quantity produced of each model is very less making it a unique piece which makes customers rush to stores to grab them before they run out this has made its customers in to serious impulse buyers. Unlike other brands Zara spends very less on advertisement which is around 0.3% of its total revenue unlike other competitors which spend around 3-4%. Instead they spend heavily on their stores which are located in prime locations of cities. The complany is built upon a vertically integra ted demand and supply chain while most textile chains rely on outsourcing and cheap labor in China. Vertically integrated are companies that are linked together by a single owner it gives Zara a greater control over the whole process from manufacture to retail which helps it fulfill its main idea of its business plan which is to respond quickly to demands and fashion trends. The operational cycle of Zara includes three main basic steps ordering, fulfillment and design and manufacturing. Each store places order twice a week to headquarters to replenish items and for new stocks. These orders are sent to stores in two days. The design and manufacturing goes throughout the year. New models are continously hitting stores unlike other competitive firms that lauch collections for just summer, spring, fall and winter. Another competitive