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zara problem

3 main problems

Mengxia Zhang

on 14 November 2012

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Transcript of zara problem

High cost Problem of Imitation Thank you! Outsourcing Strategy
---More flexible production
---Separation of core and non-core activities
---Corporation with foreign suppliers H&M’s International Expansion Integrated Production
---Ensures Zara to have a fastest response to the newest fashion
---Focuses mainly on people’s requirement Zara’s Core Competitiveness Difficult to satisfy people’s different taste
Zara has to collect more trends and fashion from more countries for the designing
Time-consuming Two Challenges for Zara International Expansion Problem
--to learn from H&M Lowering price by reducing costs

Presenting a global image that offers the highest standards of quality and service and sells reliable products to the worldwide fashion lovers. Solution Brand image
Solution Problem of Positioning Problem of Positioning Trade-offs between speed and side effects of imitation
Pay more attention to original designs
Launch some eye-catching high-end clothing originally designed by famous designer
Make up the time and costs by optimizing other processes Solution Imitation Design Strategy Problem The lawsuits and fines caused by infringement
---In Europe, Zara has to pay fines up to tens of millions of Euros each year.
---Zara is often questioned plagiarism. Imitation Design Strategy Problem Zara has a huge designer team with more than 400 professionals
---Young and passionate
---Group work
Zara has some special employees called fashion detectives
---Search for pop elements
Store managers’ feedback of Zara’s products is quite important for designers.
---Detect what customers are looking for
---Using IT system to send all information of design improvement to the design team Imitation Design Strategy Implementation Zara was a fashion imitator. It focused its attention on understanding the fashion items that its customers wanted and then delivering them, rather than on promoting predicted season's trends via fashion shows and similar channels of influence, which the fashion industry traditionally used.
---Businessworld magazine, India Imitation Design Strategy Outsourcing is a good choice Zara’s Improvement The cost is high
---in-house production
---Zara has to import resources Two Challenges for Zara Price latest fashion trends at the right time at affordable prices Positioning Ranked 48th in the world's 100 top brands
Zara’s original country of Spain is often ignored by customers and Zara conveys a global image
Made in Europe , not made in Spain A global brand image Zara provide latest fashion products from design to end product within two weeks or even shorter time.
Zara creates around 40,000 new designs every year, of which over 12,000 of them were manufactured.
Competitive advantage and huge profit. Imitation Design Strategy Achievement Imitation Design Strategy Implementation Zara expands its market to more than 56 countries and districts of the world, with more than 2,000 stores. Zara’s International Expansion broad, rapidly changing product lines √
relatively high fashion content √
Reasonable price √
excessive physical quality Positioning Imitators can gain profits and become big companies, but not great companies
---The pursuing of originality will never change in fashion industry
---Cheap copy-design clothing harms intellectual property rights of other brands and also the design industry
---Lack of original unique design will become the biggest obstacle for the development of Zara Imitation Design Strategy Problem The impression of an imitator damages Zara’s reputation and public image.
---Nightmare , copy machine
---Common brand, substitute goods for luxury brands
---Zara’s copy designs cannot attract customers who do care about originality Imitation Design Strategy Problem
Zara is often questioned plagiarism.

3.A New York artist Patrick Waldo accused that Zara plagiarized one of his iconic design and patterns used in a T-shirts. Imitation Design Strategy Problem
Zara is often questioned plagiarism.

2.A French woman accused Zara of stealing her photos and printing them on clothes. Imitation Design Strategy Problem Imitation Design Strategy Implementation upper and middle classes low, middle and upper classes
Targeted customer base

In Spain

In emerging
markets Price Zara Man vs Balmain Homme Madonna Drowned World Tour Distribution production Design Collecting information Integrated
production High level
Control Zara’s Integrated Production Lower Cost Collect information H&M’s Flexible Production Non-core Core Zara has a huge designer team with more than 400 professionals
---Young and passionate
---Group work Zara has a huge designer team with more than 400 professionals
---Young and passionate
---Group work
Zara has some special employees called
fashion detectives
---Search for pop elements
Zara is often questioned plagiarism.
1.Louboutin sued Zara for copying its open-toed red-soled shoe. a market-based pricing strategy
the cost of the material, production and suppliers = target price-the profit margin Direct the production Keeping core activity– design:
to ensure quality and fashion
Outsourcing non-core activities:
to reduce
---Producing cost---labor cost
---Transportation time and cost Manufacture Business model Firm level analysis supply & demand match
2 or 3 days after order
Little inventory anywhere
No “back room” for stores Distribution- supply chain SW0T summary industry and firm analysis target consumers---- young city dwellers Design Based on DOS Supportive IT for store Always in best known streets
Delicate and standardized decoration Store-decoration Stores DCs Factories Supportive IT for distribution Internal created
applications trend follower IT Based on DOS Quick
response Flexible
Control Close to
market Activities
Separation In-house Foreign
suppliers order twice a week
Full transcript