Supply Chain of Walmart
Zara is the flagship chain store of Inditex Group owned by Spanish tycoon Amancio Ortega. Zara is the most internationalized of Inditex’s chains. The group is headquartered in A Coruna, Spain, where the first Zara store opened in 1975. As of August 2009, there are more than 1,500 Zara stores around the world. It is claimed that Zara needs just two weeks to develop a new product and get it to stores, compared with a six-month industry average, and launches around 10,000 new designs each year. Zara has resisted the industry-wide trend towards transferring fast fashion production to low-cost countries. While it spent little on ads, it spent heavily on stores. Zara is a vertically integrated retailer. Unlike similar apparel retailers, Zara controls most of the steps on the supply-chain: It designs, produces, and distributes itself. The business system that had resulted was particularly distinctive in that Zara manufactured its most fashion sensitive products internally. Zara did not produce "classics", clothes that would always be in style. In fact, the company intended its clothes to have fairly short life spans, both within stores and in customers' closets.
ZARA’S CUSTOMER AND PRODUCT OFFER
Zara’s Customer Segment:
LOW COST FASHION FOR THE 16 TO 24 YEAR OLDS
LOW COST FASHION
Get it approximately right Respond to what customers want – create a demand chain
Eliminate creative design Copy trendy fashion fast
Fast-response supply chain including design Create a store experience
Finalise design knowing material supply constraint Create a network/brand
Optimise the supply process for speed and cost
Manage follow-up (next batch) and customer flows Zara’s Product Offer Product Offer
Supply Process High customization
Low volume
High unit margin
High quality High standardization
High volume
Low unit margin
Low quality
Flexible Process High fashion: Out of price
Rigid Process ZARA M&S: Out of Fashion
ZARA’S KEY
ZARA’S CUSTOMER AND PRODUCT OFFER
Zara’s Customer Segment:
LOW COST FASHION FOR THE 16 TO 24 YEAR OLDS
LOW COST FASHION
Get it approximately right Respond to what customers want – create a demand chain
Eliminate creative design Copy trendy fashion fast
Fast-response supply chain including design Create a store experience
Finalise design knowing material supply constraint Create a network/brand
Optimise the supply process for speed and cost
Manage follow-up (next batch) and customer flows Zara’s Product Offer Product Offer
Supply Process High customization
Low volume
High unit margin
High quality High standardization
High volume
Low unit margin
Low quality
Flexible Process High fashion: Out of price
Rigid Process ZARA M&S: Out of Fashion
ZARA’S KEY