Zara’s Business Model, Information and Communication Technologies, and Competitive Analysis :: essays research papers

Question 1 Zaras Business mold and Competitive AnalysisZara, the most profitable brand of Inditex SA, the Spanish clothing retail group, opened its first store in 1975 in La Corua, Spain a city which eventually became the central headquarters for Zaras planetary trading operations. Since then they have expanded operations into 45 countries with 531 stores located in the most important shopping districts of more than 400 cities in Europe, the Americas, Asia and Africa. passim this expansion Zara has remained focused on its core fashion philosophy that creative thinking and quality design together with a rapid response to foodstuff demands will yield profitable results. In order to realized these results Zara authentic a business shape that incorporated the following three goals for operations develop a system the requires short lead beats, falling off quantities produced to decrease inventory risk, and increase the number of available styles and/or choice. These goals helpe d to formulate a unique order proposition to combine moderate prices with the ability to render new clothing styles faster than its competitors. These three goals helped to shape Zaras received business model. Zaras Business ModelZaras business model can be broken down into three basic components concept, capabilities, and value drivers. Zaras fundamental concept is to maintain design, production, and distribution processes that will change Zara to respond quickly to shifts in consumer demands. Jos Mara Castellano, CEO of Inditex go for tongue to that "the fashion world is in constant flux and is driven not by supply but by customer demand. We need to give consumers what they want, and if I go to South America or Asia to make clothes, I simply cant move fast enough." This highlights the importance of this quick response time to Zaras operations.Capabilities of Zara, or the required resources needed to exploit the opportunities and execute this conceptual schema, are n umerous for Zara. Zara maintains tight control over their production processes charge design and manufacturing in-house or with some strategic partnerships located nearby Headquarters. Currently, Zara maintains 80% of its production processes in Europe, 50% in Spain which is very close to La Corua headquarters. They have strategic agreements with local manufacturers that ensure timely saving and service. Through these strategic partnerships and the benefits brought by this proximity of manufacturing and operational processes, Zara maintains the flexibility indispensable to design and produce over 12000 new items annually. This capability allows Zara to achieve their strategy of expedited response to consumer demand.