Zara’s

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 2.2. Background of Zara’s Integrated Supply Chain Management

Zara is a Spanish fast fashion retailer headquartered in Arteixo, A Coruna, Galicia,

Spain. It is a global brand with a presence in 69 countries. Amancio Ortega and Rosala Mera

founded the company in 1975. It is a clothing retailer that sells men's, women's, children's,

and home collections. Because of the high quality of its products, the company caters to

upper-middle-class to high-end consumers. Because of consumer trends, the fast fashion

market in the fashion industry is rapidly expanding. Zara has an integrated supply chain

management system to keep up with consumer fashion trends and new product launches

(Berbiche, N 2020). Zara is a global brand with stores in Europe, the United States, and Asia.

The company employs over 5000 people and works with over 7000 suppliers. It has a

vertically integrated supply chain that allows it to provide consumers with fast fashion. Zara's

parent company, Inditex, launched Zara.com in 2008, selling men's and women's clothing and

accessories. Delivery times are shorter than in many other stores, and there is no additional

charge.

2.6 The Adverse Impact of Covid-19 on the Value Chains

COVID-19's negative impact on Zara's value chains can be understood in two ways.

On the one hand, COVID-19 has expanded the scope of international buyers' opportunities to

buy products from India. On the other hand, it has restricted Indian buyers' ability to purchase

products from Asia. Let's start with the second point. COVID-19 has stimulated the inflow of

Asian goods into the EU market, resulting in a significant trade deficit in Asia. Manufacturers

in Asia, particularly in China, have seized this opportunity to export their goods to the EU

(Shabir, S 2020). This has, however, reduced demand for Asian products from emerging

economies such as India. As a result, it has hurt emerging countries' value chains by reducing

demand for their primary products. It has also made Indian imports cheaper than ever before.
Because imports are the only way for most international buyers to obtain Indian products,

COVID-19 has broadened the scope of international buyers' options for purchasing products

from India.

3.1. Strategy Formulation

Zara is one of the world's largest retailers, making its products available to the market

unprecedentedly. They create new designs and immediately open their new products to the

public. Furthermore, they make their designs available to the public months in advance so

that they can gauge their popularity and manufacture goods in batches. Zara's quick and small

supply chain is crucial to this. Its products are manufactured in three days at the company's

various factories and then shipped to stores (Caro, F 2019). If the product is not purchased in

the store, the garments are sent back to the factories the same day. Zara has its own rapidly

expanding global network of factories. The retailer provides the specifications, and the

factories ensure they can be met. This eliminates the need for storage space, making stock

replenishment much faster and more efficient. Zara uses a continuous product development

process, from design and production to material sourcing and distribution. It has a supply

chain that lasts only 15 days.

Zara has a distinct approach to product sourcing, design, manufacturing, and creating

its distribution channels. This is what makes it so popular. The year is divided into four

seasons: spring, summer, autumn, and winter. Zara's product line changes dramatically with

the seasons. This way, they avoid having excess inventory and can provide a variety to the

customer. Zara distinguishes itself from competitors by offering a wide range of products.

Zara's list moves quickly (about 20 times a year). This means that the customer is constantly

looking for new products. Zara can be assured of maximum sales this way because customers

always want to see something new (Caro, F 2019). They do not have seasonal sales like other
stores; instead, they always have deals. A portion of the retail price goes toward the cost of

goods, and another part goes toward marketing and distribution costs. The remaining

percentage is how the store makes money. Zara has come up with an excellent idea.

Zara has always believed in exceeding the expectations of its customers. They

developed a value proposition by researching what people desired. They would always strive

to carry fashionable and current designs. The store has a wide range of sizes to accommodate

a wide range of customers. They use "speed to market" to sell the product as soon as it

arrives. They keep overhead costs low by using a centralized warehouse and limiting the

number of employees. Zara's secret to success is its ability to bring in new designs as quickly

as possible and offer them reasonably. All of these describe Zara’s value proposition.
 References

Berbiche, N., Hlyal, M., & El Alami, J. (2020). Exponential success through integrated

supply chain optimization, ecomotional intelligence and reputation-based leadership:

Zara model. In IOP Conference Series: Materials Science and Engineering (Vol. 827,

No. 1, p. 012058). IOP Publishing.

Caro, F., Babio, F., & Peña, F. (2019). Coordination of inventory distribution and price

markdowns for clearance sales at zara. In Operations in an Omnichannel World (pp.

311-339). Springer, Cham.

Shabir, S., & AlBishri, N. A. (2021). Sustainable Retailing Performance of Zara during

COVID-19 Pandemic. Open Journal of Business and Management, 9(03), 1013.