Essay
Essay about Zara and Fast fashion
- Institution
- University Of Greenwich (London)
Introduction and Zara’s Success story Zara Operations management and Operation Strategies Zara’s Marketing Strategies compare to H and M.
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By: sabrinacole421 • 4 year ago
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Introduction and Zara’s Success story:At first glance, most businesses have to manage their operation and strategize their marketing
campaigns respectively. But what also equally true is that the role of operation managers and
marketing directors are not always given equal weight. Sometimes the difference of what can
meet the eyes and the truth is further than what we would like to believe. In this case, Zara
clothing brand, it is hard to decide which part of organisation is more vital to its tremendous
growth and popularity in fashion market over the last three decades.
Zara is one of six major clothing brands owned and operated by INDITEX corporation. Zara,
Stradivarius, Pull &Bear, Zara Home, Massimo Dutti, Bershka and Oysho are other brands
under control of this vast corporation. Zara is founded in 1975 by Amancio Ortega Gaona, a
Spanish businessman whom is also at the top 5 richest men in the world by Forbes magazine
and other reliable sources. Now, Zara has over 2000 stores in the world and 66 of them are
operating right here in UK. It sells designed clothing for men, women, kids and matching
accessories at a reasonable price. And to me, it gives a lifestyle that a student can afford. Its
first store was opened in the city of A Coruna, Galicia, Spain. Interestingly, there is a story that it
meant to be called Zorba, after the owners’ favorite film at that time Zorba the Greek.
Fortunately, that name has already been taken by a local shop, which forced the owners to think
of another name that is shorter and sexier, and they came up with Zara (Ruddick). It must have
been one of the major decisions that contributed to the brand worldwide recognition. The brand
alone was worth $10.1 Bn as of November 2014, estimated by Forbes magazine(Denning et al).
,The company reported a turnover of 16.7 billion euros in 2014, up from 15.9 billion euros in
2013. Therefore, it can easily be said that Zara is a successful international firm.
Zara Operations management and Operation Strategies :
As fast fashion consumer myself, there are three high street retailers I mostly visit and believe
are acceptable alternatives with fierce competition among them : Zara, Primark and H&M. On
that ground, we must first define what is fast fashion as a business model and how does it differ
from traditional designer-led fashion season of the competitors. Head of Inditex describes its
fast fashion operation as “creativity and quality design together with a rapid response to market
demands”, meaning they can anticipate fashion trend faster and meet those demands rapidly
and efficiently ( ie low cost lead to low price), to reduce design to retail cycle. It does this by
many operation techniques and tactics such as just-in-time production & distribution, vertical
integration and speed versus low labour cost. These are indeed operational strategies that Zara
uses to stay ahead of the competition in product design, price and availability.
Operations strategy concerns with actions and steps that the operation takes to achieve its
goals and objectives. The word ‘strategy’ comes from the word ‘strategos’ meaning ‘leading an
army’. The word ‘operations’ is not the same as ‘operational’ meaning ‘day-to-day basis’, but
rather meaning ‘resources and conditions’(Slack, Johnston and Brandon-Jones). Therefore, all
the company’s assets can be seen as an army that conquer a market share or other kinds of
objectives for Zara. Other way to say this is Zara understands this concept very well, for they
are deploying all the available advantages and resources. Additionally, they employ technology
tools at every production level so the organisation work together with a strong synergy. It is a
challenging task specifically for their largest operation, a headquarter in North of Spain, for they
are employing more than 3,000 employees which means internal communication is more time-
consuming and demanding. As a counter measure, they promote a sense of belonging to
employees by creating an internal newspaper called Inditex internal newspaper. For external
communication, they benefit from the personal digital assistants, a digital input device that
stores information and sends them daily to the main office. The analytics then can be used to
reflect customer feedbacks such as why they like or do no like a particular product or how
customers describe the experience of shopping in a specific store. This system is most helpful
when opening a new store, especially in area or country where Zara brand has little to no
awareness. As a result of this and many more systems implemented, they are able to link
customer demand to the factories and factories to distribution. Indeed, this is the key feature of
operation strategy that made Zara competitive. In general, there are 4 kinds of perspective that
experts use to look at operations strategies. 1.Top-down perspective : what the business wants
the operations to do; 2.Bottom-up perspective: what day-to-day experience suggests operation
should do; 3.Operations resources perspective: what operations resources can do; 4. Market
requirements perspective: what the market position requires operations to do. In my opinion,
Zara has been using none of these perspectives but instead an interactional perspective with all
stakeholders that allows the company to know what is the position of their business in political,
, social, economic and global environment. It can be seen in their online mission statement :
‘Through Zara’s business model, we aim to contribute to the sustainable development of society
and that of the environment with which we interact’
‘Operation management is the activity of managing inputs which creates and deliver outputs
such as services and products. The operations function is the part of the organisation that is
responsible for fulfilling customer requests and demands’(Slack, Johnston and Brandon-Jones).
This is one of business’s core function along with marketing function and product/service
development function.
From these two definitions we can analyse operations strategies that Zara is currently using and
that of the competitors. First of all, about product design and development, Zara has its
knowledge & information ahead of time and competition because of all of their designers and
reporters attending major fashion show from across the world, the shows that will set the
upcoming fashion trend. For example, in New York, Paris, Milan and of course London with its
famous London Fashion Week. These fashion show features the newest design on the catwalk
with beautiful models wearing them. The feedback is assessed by public reactions and opinions
with each piece of clothing, for many of them are serious buyers as well as critics or magazine
editors. However, in this digital age, the fashion trends usually go viral within a week after the
show, before any magazine or critics have wrote about it. It does that by social media pages
such as twitter or facebook. Furthermore, there are also fashion blogger or vlogger that updates
to their opinions for each dress, pair of shoes for followers to see and as result demand the
same things for themselves. For this fashion enthusiast tribe, there is nothing worse than going
out of ‘Style’. Dipping in to this cycle of global need, there must be a cycle of immediate product
design & production that will satisfy the need to catch on with the wave of look, before preparing
for next one just as often without losing tempo with the rest of the industry. Zara does this by
employing young designers to sketch designs everyday from photos taken in fashion shows,
pictures in magazines, blogs or even snapshot on the streets with incredible efficiency. Then,
these sketches will be approved by production managers and other authorities to confirm
production, the rate of success of each sketch is very low, about 25%, which is alright
considering the major cost of producing each sketch is only time and effort of each sketch artist.
Throughout this integrated just-in-time design, just-enough production, operations management
is essential to its success and continuity, a truly ‘make or break’ activity. This is why as a result,
it only takes Zara 15 days on average to turn an idea into a product that is available to buy in
their stores, compares to industry standard of 1 to 6 months.
The second operations strategies that Zara adopts is centralized distribution and delivery.
Physical distribution is involved with allocating products(in this case, stores) in places which are
most convenient and appropriate for customers to visit and make purchases. The wider term for
this is Logistics, by which means the movement order of production line or in other words is the
transformation of raw materials to finished goods. Decisions must be made concerning
transportation methods and distribution channels. In this exemplification, the transportation of
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