Zara Summary Report
Zara Summary Report
Group 1
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.
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.
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.