Zara Case Study presentation

HBR Case Study - Fashion retailer ZARA has achieved spectacular growth via a distinctive design-on-demand operating model. This case describes this model and outlines a number of challenges facing the company, with a particular emphasis on its international expansion. Includes color exhibits.

1. Hola ! Cómo estás ….

2. COMPANY PROFILE Amancio Ortega opened the first Zara store in 1975 in central A Coruña Galicia, Spain Zara is one of the most well known brands in the world and is also one of the largest international fashion companies. Headquartered in Spain. There are more than 2600 stores across 73 countries in the world 2 weeks to develop products  10,000 new designs every year (which is an industry record).

3. DESIGNING & PROCESS Day 1 : A designer in Spain sketches a new piece of clothing with input from store managers on the latest trends. Day 2-5: A pattern makers creates a prototype. Day 6—21: Fabric I cut,8000 new pieces are sewn together at a nearby by factory, and are made ready for shipment Day 25: New items arrive in Manhattan and are put display before opening Day 21-24: Apparel is driven to a distribution centre .

4. SUPPLY CHAIN SYSTEM ZARA buy fabrics only in 4 different colours, design and cuts its in house Supplier are all closed to ZARA , So that it can order on the need basic Clothes are ironed in advance and packed on hangers, with price tag Customer Retailer Outlet Road, Train and Air flight used to transport product to other countries

5. Cost leadership Efficient Distribution Information Technology Keeping Low Inventory Fast delivery of new products and trends Centralized distribution system Doesn’t spend much money on advertisement Has only 1 manufacturing centre in the world Global Market penetration Online Market Distribution centre in the US long-term and evergreen styles in the market Local competitors Global competitors Based out of Spain but has larger penetration in Europe is affecting the revenue SWOT BUSINESS ANALYSIS

6. Present Scenario As per the report of Statista.com in 2018 Zara is the market leader in retail fashion with a turnover of almost 2000 million Euros

7. Local Story Last year (2017-18), Zara had posted a profit of ₹82.59 crore with revenues of ₹1221.67 crores . Zara posted a 13.4% drop in net profit for the year ended 31 March, 2019 at ₹71.49 crore Zara uses ‘ Trent Ltd ’ as its distribution partner in India Trent is a 51-49 Partnership between Inditex SA & Tata Tata had an indirect conflict of interest with its lifestyle retail chain – ‘ westside ’ As a result the rapid growth in number of stores opened in India dropped by almost 40% as compared to its global rival H&M . (40 stores as of now, planned to scale up to 50 by 2020) Other Retailers like GAP, Forever 21, H&M are already in, additionally Japanese retailer Uniqlo is set to enter India later in this year , making it more challenging for Zara to retain its market share So What Changed ?

8. RECOMMENDATIONS E-Commerce Have Strategic Tie-ups with multi-brand stores like Amazon, Verge, Olive etc Increase the investment on the advertisement – Online and Offline. Global market Expansion Should look for further expansion in market zones like – MEA, APAC New Design Exploration Design Trademark – Custom Styling based on Fashion week & Red Carpet events Operations Focus on Multiple manufacturing and distribution Network for faster response

9. THANK YOU