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Fashion Retail Business Analysis - Zara

             Analysis of Zara's history presents a clear picture of a fashion retail company that adapts to the dynamic climate of the fashion industry. Zara has found it's success in a handful of key strategic principles that dictate there operational procedures. The first principle that stands out about the company's strategy is the rate at which Zara can quickly change its production process to meet the consumer's demand. The fashion industry is highly dynamic and therefore predisposes the highly adaptive company to be successful. .
             Zara changes it's manufacturing and production process constantly in order to match consumer demand and also fulfill the needs of end buyers particular fashion needs. It is important to note that Zara's success stems from the high rate at which customers are in contact with the company. On average, other companies are in contact with the end buy three to four times per year; in comparison Zara is in contact with the end buyer on an average of 17 times per year. This gives the company an edge in terms of the speed at which they can adapt their strategy and operational principles to conform to market trends. This ultimately results in a diversified product that affords the company the opportunity to charge a premium for its constantly varied goods. .
             2. Zara's main strategic strength is derived from it's high quality diversified product line. With that being said, the main threat the company faces comes from the opposite side of the spectrum; low cost drivers. With a multitude of companies outsourcing labor and production to manufacturers located in China, Zara must further differentiate itself from the market in order to charge a premium and compete with these companies. From a profit margin stand point, Zara must rely on its price premiums and high quality standard set on diversified products in order to compete with companies that utilize extremely low costs to drive profit margins up.


Essays Related to Fashion Retail Business Analysis - Zara

1. Marketing - The Zara Store of Melbourne, Australia

Besides retailing, Zara also designs, produces, and ships their lines of clothing to their Zara stores. ... They suppose that, they are in the fashion business, not the clothing business. ... Zara's business model is characterized by a highly integrated vertical structure and strict supply chain management. ... The model of Zara business highly price aggressive, allowing it to offer mid-market chic at down-market prices. ... Zara retail managers relay customer preferences and store trends back to headquarters in Melbourne. ...

  • Word Count: 1484
  • Approx Pages: 6
  • Has Bibliography
  • Grade Level: Undergraduate

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