Sunday, 31 July 2011

Week 4 Question: Zara - Option 1

Zara's key reason for success came from its strategic approach using vertical integration and information technology to gain a competitive edge from its competitors. Vertical integration means that Zara imports raw materials and processes their own products - charged with their own manufacturing and logistics. Unlike other retailers, Zara moved at an amazing pace for the industry (i.e. 15 days from idea to shelves) and also boasts 11,000 new designs a year, whereas competitors typically offered only 2,000 - 4,000. Also, Zara stores hold fewer inventories so that customers buy products on the spot because if they decide to come back later, it will most likely be gone the next time they visit the store.

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