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Copy of Zara Case Study

Innovation
by

Andy Choi

on 10 February 2014

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Transcript of Copy of Zara Case Study

ZARA.
Innovative Strategy
Innovative Design
Originality
Accessibility
Efficient Communication
Value for Money
Innovative Design

Originality

Accessibility
Efficient Communication

Value for Money
Follower Strategy
INDITEX Founded by Amancio Gaona in 1963.
Expansion and First shop in 1975
Today Company Worth Over $8 Billion
8 Key Brand Groups
Active in 70 countries with over 2000 stores
HQ in Spain
Global Brand
Exclusive Designs
Stylish , Exclusive, Affordable
Over 10,000 Designs annually
Quick product Turnaround
Original and Design Led
950 Stores
Competitive Advantage
What makes Zara unique?
Fresh Brand & Designs
New Product Turnaround
Quick Production
Established Distribution Channels

Low Production Costs
Quality Control
Continuous Improvements & Feedback
INNOVATION
IPPCO
Information:
Fast production
Short shelf life
Replicated model
Competition
Pluses:
Fresh, competitive, high value
Distribution channels
Established Brand Reputation
Customer centered
Efficient Communication
Potential:
Differentiation
Global Markets– Australia
Online shopping
Brand Loyalty
Concerns:
Outsourcing in future
Replicating goods
Manufacturing in one place, natural disaster and it’s all over!
Shipping costs
Overcome by:
Concords
Distinguish brand – logos
Establish another distribution and production center in new location
Globalisation
Internet shopping – cheap
YES!
Is the Zara model sustainable? What would you do to preserve their edge over the next 5-10 years, given that many other players are now looking to follow their example? If you don’t think it can survive, give your reasons for why you think the model is unsustainable and will fail.
You have been hired as a consultant to a small clothing manufacturer who wants to emulate the success of Zara and Benetton. She wants advice on an innovation strategy, which takes the key lessons from these successful firms. What would you offer?
Zara Home has just opened using the same basic business model and deploying the same innovation approach as the rest of the business but in the home goods field. Do you think it might succeed and why?
Is the same business model going to bring success in the home goods field?
ZARA HOME
Pros
Cons
Is the same business model going to bring success in the home goods field?
Design is necessary
10,000
Exclusivity
4 week change over
200 designers
Register inventory levels everyday
Empowerment = Commitment
15-20% produced before, 50-60% at the start of the season, and the rest during
Produce batches of clothing in small quantities
Large inventories
1/4 = fast fashion
Celebrity marketing
Low cost, High quality
Both companies adopt
Virtually no marketing
17 vs 3
AUSTRALIA!
"Developing two collections at once to meet opposing seasons would undo our chief selling point, which is bargain prices."
Zara = Sustainable
Competition is not bad!
?
Zara = Sustainable
Full transcript