Establishing zaras fast fashion apparel chains in galicia spain was a noble idea as the case study pointed that by late 1990s, only us exceeded western europe in terms of total retail sales where chains accounted for about 85% and 70% of the total sales respectively. Zara definitely implements a wise business model fast fashion. The latest clothes, shoes and accessories for men every week at zara online. It for fast fashion case solution and analysis, hbr. Inditex is an example of a company that is highly effective at driving alignment between its operating model and its business model. The case describes this value chain, concentrating on its operations and it infrastructure. This is perhaps the reason why zara is the most responsive to fashion trend among the big 3. Please do not distribute without the authors permission. Business strategy of fast fashion a case study of zara request. Focuses on inditex, an apparel retailer from spain, which has set up an extremely quick response system for its zara chain. Nov 14, 20 zaras fastfashion edge zara, flagship of the worlds no.
Contents creation of zara environment analysis zaras strateies strategic proposals 3. Jun 08, 2015 zara has cracked the formula to fashion retail success. Apr 30, 2019 one of the stores which gives marketers lessons on how to keep customers coming back is zara. Hbs cases are developed solely as the basis for class discussion. Superb supply chain zara is known to get its designs from conception to the stores in 2 weeks whereas it takes other competitors minimum 6 weeks or more, automatically making zara the trendiest store which has the latest in fashion. European fast fashion companies ranked by revenue 2019. The fast fashion industry in china dresses the new generation. On an average, 450 million items are designed every year by zara. While competitors falter, zara is undergoing one of the fastest global expansions the fashion world has ever seen. Here is the swot analysis of zara or its internal analysis. In 2003, zaras cio must decide whether to upgrade the retailers it infrastructure and capabilities.
Zara it for fast fashion case notes identify decision issue, and your role as a decision maker salgado and sanchez need to decide if it is the right time to update zaras information technology. Zaras supply chain has undergone tremendous changes in order to sustain its competitive advantage in todays market zara has continually. This fast fashion system depends on a constant exchange of information throughout every part of zaras supply chainfrom customers to store managers, from store managers to market specialists and designers, from designers to production staff, from buyers to subcontractors, from warehouse managers to distributors, and so on. Digitalization of zara and fast fashion technology and. Zaras fastfashion edge zara, flagship of the worlds no. Case study of online retailing fast fashion industry ijeeee. The brand provides an alternative outlook to the fashion retail business model by rejecting media advertising and blowout sales, and maintaining the bulk of its production process inhouse rather than outsourcing to lowcost countries. Spanish fast fashion retailer inditexzara broke the 2season. It was for this reason that zaras store visits per customer averaged at 17 times a year, compared to 45 for most of its competitors27. Pdf the successful implementation of an integrated supply chain strategy.
Zaras low price and trendy style were appealing to me when i was a student, but now i pay more attention to fabric, cutting, and design, she states. In 2003, zaras cio must decide whether to upgrade the retailers it infrastructure and. Zaras rapid response time enables the firm to quickly respond to changing fashions while deliberately under producing products. Zara is working on the concept of introducing new and fast fashion that involves penetrating new styles in the markets. One of the most notable is the us fast fashion retailor forever 21, which withdrew from china in 2019. This report aims to develop and analyze the case of. It s been a meteoric rise for ortega, the inventor of fast fashion who has changed the way we shop forever. In a nutshell, fastfashion describes societys obsession with relentless consumption. Zaras secret for fast fashion hbs working knowledge. In 2003, zara s cio must decide whether to upgrade the retailers it infrastructure and capabilities. Quantitative models and empirical studies, 2nd edition, narendra agrawal and stephen a. Zara, a key subsidiary of its spainbased parent company inditex, was established in galicia, spain in 1975. It is interesting to know that the salespersons at the stores are facilitated with the pdas personal digital assistant that helps them to maintain an effective communication with the designers in spain, this is what makes it.
Indeed, zaras interest in this area of collaboration was motivated by its desire to improve the inventory. Zara can move from identifying a trend to having clothes on sales of rs. From an operations standpoint, fast fashion requires a highly responsive supply chain that can support a product assortment that is periodically changing. Inventory management of a fastfashion retail network.
The rapid evolution of the fast fashion market in china is not without casualties. Should they maintain their current dosbased pos system or should they upgrade to a more modern system. This article takes zara and vancl in comparison for case study to analyze the success of the newly merging online retailing company in fast fashion industry and. Zaras total production is premade while 8085% is produced according to the market reaction. Hence, a super fast rate of operational responsiveness to customers was maintained and the dc was more of a place to merchandise than merely for storage. With fast fashion, new styles swiftly supersede the old, defining and sustaining constantly emerging desires and notions of self. Check out the new look and enjoy easier access to your favorite features. Business strategy of fast fashion a case study of zara. Swot analysis of zara zara swot analysis or internal. This report aims to develop and analyze the case of zara to explore zaras successful. A clothing company in the fashion industry very succesful qua revenue and. It for fast fashion 3 executive summary this paper presents an analysis of zara, an international retailer that follows a simple, yet unique. According to a study by cambridge university, people bought around 30% more clothes in 2006 than they did in 2002.
Technology also helped keep zaras costs under control. How could changing consumer trends affect fastfashion. Despite these limitations, however, zaras parent company. Zara is a spanish clothing retailer 1700 stores 78 countries worldwide zara practices fast fashion trends moves from the runway to stores within weeks, as opposed to months. Due to high inventory turnover ratio, consumers may not find on zara floors the items that they have seen in the previous week. Internationalisation of spanish fashion brand zara introduction despite the increased volume of research on the internationalisation of retailing since the end of the 1980s burt and carraleroencinas, 2000, attention has been devoted to the internationalisation process from the branding perspective moore et al. This insatiable hunger creates unsustainable demand, meaning. Now some of those other retailers and other fast fashion companies are attempting to replicate zaras quick production cycle strategy. It has the different types of the product ranges and at the same time, it has. It can be argued that firms that keep following the traditional fashion buying and.
Consider the case of zara, an exemplar of fast fashion. Clearance pricing optimization for a fastfashion retailer. Sep 12, 2018 fast forward 40 years and zara s arrival in hawaii marked the companys 7,000th store. The global fashion retailer inditex, best known for its zara brand, continues to chart the course of fast fashion through the intimate alignment between its operating and business models. Salespersons at stores with pdas communicate and inform the cube so fast that enables zara to respond market in two weeks. Their clearance pricing problem is thus challenging because it involves. Creation of zara 19631974 amancio ortega gaona founded inditex 1975 the first zara store was opened in spain 19761984 spreading of zara store in spain 1985 zara started to enter the overseas market in portugal. What i am more interested in is the idea behind the model. Mar 17, 2019 zara is now a success story and its fast fashion business model is now a major hit. Zara inditexs oldest brand, zara, was the pioneer of a new fashion category, called fastfashiontrendy catwalkinspired items manufactured quickly and sold at affordable prices. Instead of following the trend, they are actually creating a trend. It is because firstly the fast fashion is always considered as a small part of fashion industry, so the features of fast fashion and its own. Fast fashion zara had been one of the pioneers of this new category in the fashion industry, known for its quick productiontostore operations. The work described here, which has been conducted in collaboration with zara.
Fast fashion must be highend to compete in china jing daily. Instead of predicting months before a season starts what women will want to wear, zara observes whats selling and whats not and continuously adjusts what it produces and merchandises on that basis. It for fast fashion onder barlas executive mba student bogazici university, istanbulabstract. Swot analysis of zara zara swot analysis or internal analysis. Clearance pricing optimization for a fastfashion retailer felipe caro. This study analyzes the business strategy of fast fashion through zara, a successful fashion brand from inditex spain. The fast fashion retail model just described gives rise to several important and novel operational challenges. Consumer behavior characteristics in fast fashiontina. Fast fashionzara final version strategic management.
European fast fashion companies ranked by revenue 2019 statista. In 2003 zara faced a problem whether to upgrade the operating system they used for their pointofsalepos to a new windows based one, or to continue using the stable and old one. This way, fashion companies need to adapt their business and turn it more. Zara is one of six brands, which was launched by inditex group. Harvard business school, 2006 business logistics 35 pages. Zaras product development teams attended high fashion fares and exhibitions to translate the latest seasonal trends into the designs. But for the fast fashion field, which should be separately treated from ordinary fashion field, seldom study in consumer behavior involves or pay attention to this newly growing market. However, there are many more things about zara that have turned it into success. This is not only about inventing a new business strategy, but also showing the companys objective. In the second instalment of this article, we probe the core strategies underpinning zaras success and the key factors enabling these strategies as well as the learnings possible for indian companies. This report aims to develop and analyze the case of zara to explore zara s successful.
Suitability of locating inditex in galicia spain for the emergence of apparel retailing powerhouse. Fast fashion, sustainability, and the ethical appeal f. Hbs professor pankaj ghemawat and iese professor jose luis nueno prepared this case. Mar 30, 2015 zara fast fashion for women, men, children. The key concern is the outdated operating system they use for their point of sale pos terminals. Feb 21, 2005 this fast fashion system depends on a constant exchange of information throughout every part of zaras supply chainfrom customers to store managers, from store managers to market specialists and designers, from designers to production staff, from buyers to subcontractors, from warehouse managers to distributors, and so on. Fast forward 40 years and zaras arrival in hawaii marked the companys 7,000th store. Request pdf business strategy of fast fashion a case study of zara this study analyzes the business strategy of fast fashion through zara, a successful. At the time of the case, the company relies on an outofdate operating system for its store terminals and has no fulltime network in place across stores. This case study aims to identify what operating system would be best for zara. Zara is known for its fresh designs and for keeping the designs on rotation so that the customers always get new designs whenever they walk into the showroom. Apart from the creative passion of hundreds of dress designers who known their customers inside out, there is a lot more outstanding about the fashion brand. That means that zara can quickly the unpredictability in fashion, it is quite likely that you will end identify and catch a winning fashion trend, while its competitors.
Its been a meteoric rise for ortega, the inventor of fast fashion who has changed the way we shop forever. In 2015, sales of the fast fashion industry in china reached cny 534. Dec 01, 2011 zara is a spanish clothing retailer 1700 stores 78 countries worldwide zara practices fast fashion trends moves from the runway to stores within weeks, as opposed to months. Zara is one of the most popular fast fashion brands which expand quickly in the worldwide fashion market. New style ranges are frequently introduced in the market and thus zara is moving parallel to market trends.
In the second instalment of this article, we probe the core strategies underpinning zara s success and the key factors enabling these strategies as well as the learnings possible for indian companies. Fast fashionzara final version free download as powerpoint presentation. Agasang,castro,cunanan,espiritu,mallari,sapnu,vitug. It for fast fashion harvard business publishing education.
While the firm supports eight brands, zara is unquestionably the firms crown jewel and growth engine, accounting for roughly twothirds of sales2. Based on the revenue figures from the companys financial year 2018, spainbased retailer zara inditex ranked as the leading fastfashion company in europe. Mar 17, 2020 based on the revenue figures from the companys financial year 2018, spainbased retailer zara inditex ranked as the leading fast fashion company in europe. On my holiday in the north of spain, which happened to be pretty close to the scene of crime, i couldnt resist reading this article about zara. Women bought around four times more clothes than they did in 1980, and they also dispose more clothes each year.