Zara's Case Study
1. What is Zara’s value Proposition? How does it differ from its Competitors?
“Zara has pioneered leading-edge fashion clothes for budget minded young adults through a tightly integrated vertical structure that cuts delivery time between a garment’s design and retail delivery to under three weeks (against the industry norm of three to six months)” (Grant, 2010, p.212)
According to Clayton Christensen in order to process you Value Proposition you must look at the following (Harvard Business Review)
Zara’s value proposition is that it offers its customers cutting edge fashion at very affordable prices. It actively seeks out what styles are “hot” in the fashion world. After Zara has identified the latest trend it can have the clothes on sale in their prime locations worldwide, this is achievable because it has full control (Vertical Integration) of almost the whole garment supply chain from design to retail within three weeks. A typical Zara customer visits the store 17 times a year compared to the average of 3 times per year for other retailers.
ZARA has created a culture to achieve their value proposition and in doing so it sets itself apart from the opposition that being H&M, Benetton and Gap. “The notion of speed as a source of competitive advantage was pioneered by the Boston Consulting group which is a concept of time based competition” (Grant 2010) or as Harvard business review called it “Fast Fashion”. (Ghemwat et al, 2006).
By mapping Zara’s competitors against the performance characteristics of competing products on a Value curve framework this concept was design by Kim and Renee Mauborgne (Graham, et al 2004)
“Value Curves are a graphic depiction of how customers perceive competitors relative performance across the critical success factor” (Johnson, er al 2011 p.74)
High
Low
Developed from W.C. Kim and R.Mauborgne Harvard business School Press
As you can see from the value curve, Zara has created a substantial strategic gap in
“Zara has pioneered leading-edge fashion clothes for budget minded young adults through a tightly integrated vertical structure that cuts delivery time between a garment’s design and retail delivery to under three weeks (against the industry norm of three to six months)” (Grant, 2010, p.212)
According to Clayton Christensen in order to process you Value Proposition you must look at the following (Harvard Business Review)
Zara’s value proposition is that it offers its customers cutting edge fashion at very affordable prices. It actively seeks out what styles are “hot” in the fashion world. After Zara has identified the latest trend it can have the clothes on sale in their prime locations worldwide, this is achievable because it has full control (Vertical Integration) of almost the whole garment supply chain from design to retail within three weeks. A typical Zara customer visits the store 17 times a year compared to the average of 3 times per year for other retailers.
ZARA has created a culture to achieve their value proposition and in doing so it sets itself apart from the opposition that being H&M, Benetton and Gap. “The notion of speed as a source of competitive advantage was pioneered by the Boston Consulting group which is a concept of time based competition” (Grant 2010) or as Harvard business review called it “Fast Fashion”. (Ghemwat et al, 2006).
By mapping Zara’s competitors against the performance characteristics of competing products on a Value curve framework this concept was design by Kim and Renee Mauborgne (Graham, et al 2004)
“Value Curves are a graphic depiction of how customers perceive competitors relative performance across the critical success factor” (Johnson, er al 2011 p.74)
High
Low
Developed from W.C. Kim and R.Mauborgne Harvard business School Press
As you can see from the value curve, Zara has created a substantial strategic gap in
Bibliography: Ansoff, I. (1957) Harvard Business Review 1957 D’Andrea, G and Arnold, D Ferdows, K. Lewis, M. A. And Machuca, J. A. D. (2004) “Rapid Fire Fulfillment” The 21st Century Supply Chain. Harvard Business Review. Ghemawat, P. And Nueno, J. L. (2006) “Zara: Fast Fashion” Harvard Business Review. Hooley, G., Saunders, J., & Piercy, N. (2004) Marketing Strategy and Competitive Positioning Grant, R Johnson, G., Whittington, R., & Kevan, S. (2011) Exploring Strategy. Inditex Press Dossier, (2011) Kenna, A Kotler, P., Keller, K. L., Brady, M. Goodman, M. and Hansen, T. (2009) Marketing Management. Porter, M.E.(1985) Competitive Advantage. Creating and sustaining Superior Performance.