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Bussiness Analysis Of Zara
Primary research about fast fashion
Zara’s business model
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It is important to understand as well as relate to the main analysis, which is present within the various business industries. It can be seen that in order to analyze and understand the different business models in the fashion and clothing industry of high-end brands, Zara is a very important brand of that purpose. Through analyzing the case study of this firm “Zara: IT for Fast fashion”, one can also understand how the businesses place themselves in competitive positions and how they compete in the market. This report will discuss the apparel industry with regard to the business models that the players are employing to beat competition, which is growing every day. Of particular interest to this report is Zara’s position in the industry and its business model. Some of the competitive advantages that Zara has managed to attain that are making it edge the competitors are addressed. The possibilities of Zara’s model being a disruptive model are also explored. At the end of the article, conclusions are drawn from the issues discussed. 1. Business Model of Apparel Industry: It can be seen that the main customers the Zara brand target is the high-end customer, who are fashion conscious city dwellers, and want a quick repose to the changes in fashion and clothing industry. Zara caters to this by ensuring that they are quick in designing new fashion statements and responding try the impatient customers who are waiting anxiously for changes in fashion. This is because it is a well-known fact of customer behavior that they change quickly in their tastes and fashion sense. In addition to the above, Zara caters to this very basic competitive edge because the tastes of the customers in fashion, clothing and accessories are changing very r... ... middle of paper ... ...havior of Zara brand. The customers visit often and they find new staff to asset them on each visit. More so, it can be seen that the customers see any new product, and they have the tendency to buy it. This is because they are in the fear that the main product might not be there on their next visit. Also, there it is scarcity of the product due to its high demand, sot eh customers buy it as soon as they see and like it. The manufacturing process is also a very important part of the Zara brand. The company follows a small batch manufacturing process, which is 20% higher than the competitors. However, this is catered for due to inventory turnover. More so, the orders are taken twice a week and it takes roughly about 3 weeks, starting from the concept to the distribution centers and being displayed in the stores. The following diagram shows the business model of Zara:
Today, I will be examining the company Zulily’s. I will be describing Zulily’s target market and marketing strategies, which are used to reach it consumers. Next, I will be describing the revenue and business models and merchandising strategies that Zulily’s incorporate into their company. Last, I will be describing Zulily’s creative photography process, the unique technology and the major issues within the business. `
2) How specifically do the distinctive features of Zara’s business model affect its operating economics? Specifically, compare Zara with an average retailer with similar posted prices. In convenient to assume that on average, retail selling prices are about twice as high as manufacturers’ selling prices.
Problem Statement: In 2003, Zara's CIO must decide whether to upgrade the retailer's IT infrastructure and capabilities. At the time of the case, the company relies on an out-of-date operating system for its store terminals and has no full-time network in place across stores. Despite these limitations, however, Zara's parent company, Inditex, has built an extraordinarily well-performing value chain that is by far the most responsive in the industry. Therefore the major problem to the company is to decide whether it has to upgrade the present system and by doing so, risking the reliability they have with the current system or to continue with the present DOS based system which will not be compatible for future changes or improvements.
The business model that sets Zara apart from other clothing retailers is how rapidly the company changes stocks and releases new product lineups. The company averages 12-16 collections annually which equates to more than one lineup a month. Due to stock being limited and the rapid production Zara brings forth, their items are viewed as exclusive promoting further business. Their customers are happy knowing that their specific article of clothing is more “rare” due to only having an average of a two-week window to purchase the clothing. The company specifically targets current trends and has them in the store within 30 days. This maintains the brand’s uniqueness and relativity in fashion.
Zara portrays many strengths as a company. With stores located all over the world, they have established a well branded name valued by customers. Consumers typically prefer branded products over generic products, and Zara makes this attainable by keeping prices low, yet offering the latest fashionable designs. This is possible by following a vertically integrated system, keeping their business operations at a relatively low cost. Although Zara seems to be doing well, current weaknesses may be the lack of promotional activities. Advertising is necessary in all businesses to reach and attract more customers. Some opportunities include expanding into new markets where they haven’t yet reached such as China, Japan, and India. Another huge opportunity would be offering their products online. With technological advances, shoppers are swaying from the physical store and entering the cyber world. Some threats observed are expanding to a region where fashionable clothing is unimportant, a downfall of an economy leading to potentially higher costs,...
Company and Control Business: In this quick-fashion industry, the trade control process is critical. Since the lead time needs to be as little as it could be expected under the circumstances, subsequently there is no space for deformities. Zara is leading the pack for this angle, because of their much incorporated data reaction, by utilizing PDA to straightforwardly advise the home office about what is happening at the outlet. The report could be on a daily or hourly
Based on the business strategy and tactics, Zara has been trying to optimize its business operation largely in three cyclical processes ordering, fulfillment, and design and manufacturing. Much of the process are standardized and simplified under the excellent control and employee's intuitive decision making latitude. In short, the principle of Zara's business operation is optimization of all business process and get rids of all redundancies and unnecessary things. More extended or peripherals of the principles can be summarized as follow;
Zappos.com is a website that started off just selling shoes but now sells items such as handbags, clothing, and housewares in addition to shoes. Their company logo includes their catchy name with an explanation point as the end in the shape of shoe print which leads consumers to believe Zappos has strong feelings about the service they provide to their consumers. Zappos believe that customer service is the number one priority and is focused on cultivating repeat customers which is why they have always provided free shipping on both orders and returns; occasionally provides upgraded shipping so customers can receive their shoes the same day that they are ordered even though this is very expensive to the company; and they only show products on their website that they actually have in stock albeit they lose 25 percent of their potential business by doing so (Walker, 2009). For a compa...
Petro, G. (2012, November 5). The future of fashion retailing --- the H&M approach (part 3 of 3). Retrieved from http://www.forbes.com/sites/gregpetro/2012/11/05/the-future-of-fashion-retailing-the-hm-approach-part-3-of-3/
Miuccia Prada once said that “What you wear is how you present yourself to the world, especially today, when human contacts are so quick. Fashion is instant language”. Miuccia Prada and the Prada brand have grown from humble beginnings making quality leather goods to a public traded company with a current market capitalization of over $26 billion (USD) . With the development of Prada as one of the world’s premier luxury brands it provides an excellent case study to examine how strategy paved the way for the success of the Prada brand. First, an examination of Prada’s strategic positioning against luxury brand rivals Louis Vuitton Hennessey Moet (LVHM) and Kering (Gucci). The acquisition history of Prada will be reviewed, where some preliminary conclusions can be made about what has been contributing factors to both the successes and failures. Then finally, an evaluation of what the future holds for Prada and the sustainability of its competitive advantage.
store managers and frontline personnel, play a critical role in the context of Zara’s business model. Using customised PDAs, store managers constantly communicate customer feedback, either hard data such as orders and sales trends or soft data like customer reactions to a new style or the “buzz” around a new design, to Zara’s HQ where the feedback is used by designers to quickly develop new garments based on customers’ wishes (Ferdows et al., 2004). Frontline employees assist their superiors in collecting the feedback. Zara’s store managers and shop assistants thus close the communication loop between shoppers and Zara’s HQ (Ferdows et al., 2004) and therefore contribute hugely to Zara being able to first understand what customers like and then design and produce it (Buck, 2014). Accounting for their key role, Zara pays store managers an above-average salary and up to 100% of their salary in bonuses if they hit sales targets (Ruddick,
This paper describes the various aspects of the Zappos case. The objective is to evaluate the depth analysis of the Zappos strategy. It enables to determine the Zappos strategy, business model & marketing strategy, and smartness of the Zappos acquisition.
With the rise of the economy, consumers have become more and more knowledgeable on selecting their favourable product as a result the organization cannot focus on what it sells but on the side focus on what the customer wants to buy.
Thau was inspired by the Bashar Nejdawi, president of Ingram Micro Mobility that is a provider of technology and supply chain services. According to Nejdawi, “In five years, consumer electronics stores as we know them today won’t even exist, and the same rings true for our favorite apparel brands”. He also asserts that three influential factors will change the retail landscape: instant gratification, borrowing and customization. A good example of instant gratification is Uber or Amazon. The Uber customer can see in real time where the Uber car is and when is going to arrive. In the same way the Amazon provide fulfillment program that allow retailers to sell products that are not physically in storage. In this way the retailers do not have to care about inventory and can concentrate on marketing. Secondly, the borrowing culture is going to grow. As an example is Zip Car or Netflix applications. On the Zip Car program someone can borrow a car just for few hours. Likewise, some business offer a mobile device rental program that allow a customer to lease the latest device for a fraction of the cost. Further, the customization program permits customers to choose their preferences before the product is being made. As an example is miAdidas company that gives to the clients the possibility to create
consumers will buy impulsively when they see them in the store. It is with this strategy