(Instructor’s Name)
1. Zara’s Business system
The system is controlled by a centralized logistics model. Designing involves a selection of fabrics and other complements that facilitate unique design. Manufacturing is internalized and the finished garments sent to the distribution centers. The merchandised production is stored in Arteixo awaiting delivery. Distribution involves shipment and airlifting to various cities and countries. The distributed merchandise is stored in different chain stores with wholesalers and retailers accessibility. Retailing is done in stores mostly located in prime regions.
2. Zara’s major competitors.
This includes The Gap, Benetton and H & M. The Gap was founded in 1969 with an outsourced production system. Its growth has been limited by marketing locations, pricing policies, and inconsistencies within its stores. H & M was established in Sweden in 1947 and outsources all its production. Its earnings have been declining due to slow expansion. Benetton was established in 1945 in Italy and specializes on bright colored fabrics. Others include the Creative Design Source which specializes in dyeing and development of variety fashion ranges and Purl Soho which imports its designs from Japan and has a wide range of colors which is a threat to Zara.
3. Zara’s strengths and weaknesses.
The strengths include: the internalized production strategy, the marketing policy and the use of hybrid communication and information systems in determining supply and demand levels. Apparently the company has a weakness in inventory management due to weak IT processes and overreliance on technical intensive production.
4. Zara’s current performance.
Zara experienced a cut down on its returns and limited some of its international expansion projects due to the economic downturn. However, the company remains the largest and most internalized. This was boosted by the recent IPO which has reinstated back its top retailing position.
