Zara : Fast Fashion
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ZARA : FAST FASHION
Presented By:Avinash ShawMohit ChandraPrabhat GuptaSumeet AgarwalSumona Goash
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AGENDA
Company Overview
Zara Business Model
Key Success Factors
SWOT Analysis
Competitors Analysis
Conclusion
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COMPANY OVERVIEW
About Zara
• Subsidiary of Intidex
• Founded in 1975 by Amancia Ortega and Rosalia mera
• Manufacturing and retailing of clothing & accessories
• Controls the supply chain, design, manufacturing and distribution of all products worldwide
Size & Location
• Zara has over 2000 stores strategically located in leading cities across 88 countries
• Produces approximately 450 million items each year
• Creative team of 200 designers produce around 18,000 different designs each year
Mission & Vision
• Focus on variability and uniqueness of the products
• Enhancing customers satisfaction by providing on time delivery in terms of quality and value
• Eliminate waste by being in the right place at right time
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ZARA INDIA
Inditex and Tata Group joint venture
First Store was opened in Mumbai in 2010
18 outlets presently (Avg. sales 47 Cr per store)
First brand to cross 100 million sales mark
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BUSINESS MODEL
Conventional Business Model
Zara’s Business Model
Supply Chain Reliant on outsourcing production Highly responsive, vertically integrated supply chain
Time to Market
High due to outsourcing. Industry avg. is 6 months
Lead time for new products launches are approx. 2-3 weeks
Marketing Ads primarily for range & assortments and various discounts offers
Ads only for yearly sales and to announces of new stores
Design Teams Design conceptualized by small elite team. Common for all segments
Dedicated teams for different segments
Product Life Span
Long life span because new products launch per year stood approx. 2000-4000
Short life span because of more product launches. On avg. 11K yearly
Sales Forecast
It is forecasted before arrival of new sessions
Not done due to flexible response time and supply chain
IT Spending 2% of revenue as IT applications are outsourced by vendors
0.5% of revenue due to in-house applications development
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SUPPLY CHAIN STRATEGY
Responsive supply chain and logistics: Provides shipments globally within 24-48 hours
Vertical integration: Toyoto helped Zara to install JIT systems in its Spain
factories to make their process even more smoother
Communication: High communication from stores to headquarters means
lower inventories and shipments of correct merchandising
Fast inventory turnover: Small batches of merchandising can turnout products in as
little as 2 weeks
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RETAILING
Cost Leader: Low price in sophisticated stores in prime location
Location: The stores are located in highly visible locations Zara invest in prime locations, including the premier shopping streets and upscale shopping centres
Display window: Attract shopper inside and allow them to see the type of garment offered.
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KEY SUCCESS FACTORS
Utilizing the advantage of geographical condition
Vertical integrated distribution strategy
Production in small quantities, Scarce supply
Just-in-time manufacturing system
Frequent change in store layout
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SWOT ANALYSIS
Strengths
• High Brand Value• Strong Distribution channel• Vertically integrated
(operation ,manufacturing)• low cost with most innovative
and fashionable designs
Weakness
• Low advertisement• Centralize Distribution
system• Ecommerce Visibility
Opportunities
• Growing branded apparel market
• Expand in new segments• Online marketing and E-
tailing
Threats
• Primary Challenge is high quality retail spaces
• Local and Global Competitors
• Large amount of consumers are switching to different brands
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COMPETITORS ANALYSIS
Product Male, Female, Kids Male, Female Male, Female,
KidsProduction Outsourced Outsourced 60% in house
40% outsourcedTurn around time 56 days 56 days 2-3 weeks
Net Margins 9.6% 7.07% 10.47%
Global Share 1.6% 1.2% 1.4%
Price Value for Money Expensive Expensive
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CONCLUSION
Responsive supply and logistics, vertical integration, communication and fast inventory turnover are some of Zara’s most unique and effective strategies
Having a centralized distribution and JIT production schedule creates more efficient process
High investment into technology enables Zara to operate the way they want
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Thank You