Zara Summary Report

University of Ottawa – Faculty of Engineering
MEM5280 – Principles of Operation Management
ZARA’S RETAIL SUCCESS
Group 1
Cameron, Brenton: 300273897

Menezes, Sean: 8207932
Theroux, Kait: 300303075
Date of Submission: January 15, 2024

This report will summarize the success of Zara, a fast-fashion leader headquartered in
Spain, as detailed in the two articles reviewed by the MEM 5280 [X00] course. The
report will conclude with insights into how Zara’s success can be attributed to excellent
operations management practices, which can be observed in a variety of successful
enterprises.
There are several conditions maintained by Zara which enable the generation of value
and provide an edge over competitors within the industry. For example, Zara
continuously seeks to implement customer-centric strategies, investing time and
resources into learning about and understanding customers and their needs. Brick and
mortar stores serve as sensors, collecting feedback on customer desires which can be
rapidly incorporated into the planning of operations activities. Perhaps most importantly,
Zara understands that its customers want to own the designs and styles fresh off the
runways; satisfying customer timeliness expectations is paramount to the success of
Zara’s operations.
With a strong understanding of customer expectations and desires, Zara is able to

identify its Takt time. Through vertical integration, Zara conducts its operations in a
highly responsive manner, designed to provide enough capacity to meet customer
expectations while maintaining flexibility. Zara plans for in-season adjustments,
reserving significant (majority) capacity for flexibility to deliver on emerging trends
rapidly, with decisions made during the operating season based on consumer data. This
has enabled Zara to be highly effective and meet the customer’s needs in terms of
quality and timeliness.
Regarding efficiency, Zara continues to demonstrate its savvy approach to operations

management. Zara maintains a greater degree of control over its supply chain than its
competitors. Consequently, it is empowered to manage its production operations in a
highly efficient manner, further ensuring reliability. It does so, again, by applying a
remarkable understanding of its customers, who want trendy, exclusive, fashion. To
create a sense of exclusivity around its products, Zara simply needs to control its
operations in a way which creates a highly predictable climate of scarcity and
opportunity.
Unlike other shoppers, Zara clients know that a product they like will only be available
for a short period of time and in limited quantities; when they like a product, they buy it
immediately and are more willing to pay full price. This scarcity environment, entirely
created and controlled by the company, has proven fruitful for Zara, which has
performed much better than the industry averages for full price sales and unsold stock.
Ultimately, by producing less of a given product, and reducing the amount of waste or
discounted product, Zara maximizes its sales and sustainability. By reserving capacity
within its production operations, Zara is able to make calculated changes to its
production plan to meet demand forecasts, such that waste is always minimized and the
sales gains (outputs) are always of an acceptably larger magnitude to the inputs.
From production to retail, Zara’s operations are conducted to maximize speed and
efficiency. Distribution is extremely predictable and reliable. This establishes an
exceptionally efficient setting that forms the foundation of Zara’s brand.
By aligning its activities to the overarching strategy of rapidly providing exclusive

fashion, Zara has generated a loyal customer base. Zara’s customers visit two to three
times more often over a one-year period than do competitors’ customers. This above-
average visit figure can be attributed to the fact that Zara’s offers new products every
two weeks. The unique experience of shopping in Zara’s as compared to its competitors
has enabled the company to further build loyalty among its clients.
Ultimately, Zara’s success can be attributed to several operations management

practices. Excellent business decisions have been made regarding:
 Determining the selection of products to be offered;

 Identifying the appropriate capacity and scheduling to meet consumer demand;
 Implementing consumer-centric marketing strategies;
 Strategically selecting locations for various activities;
 Design and management of the supply chain;
 Implementing techniques to minimize inventory, and maximize turnover;
 Establishing efficient and reliable methods for distribution
All these operations enable Zara to outperform its competition and succeed in fast
fashion retail. Although the activities Zara conducts have set it apart as a fashion
retailer, the underlying principles of strong operations management practices are
applicable to businesses in any industry.

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University of Ottawa – Faculty of Engineering

MEM5280 – Principles of Operation Management

ZARA’S RETAIL SUCCESS

Cameron, Brenton: 300273897

Date of Submission: January 15, 2024

With a strong understanding of customer expectations and desires, Zara is able to

Regarding efficiency, Zara continues to demonstrate its savvy approach to operations

By aligning its activities to the overarching strategy of rapidly providing exclusive

Ultimately, Zara’s success can be attributed to several operations management

 Determining the selection of products to be offered;

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