Integration..
THE SECRET BEHIND ZARA'S RETAIL SUCCESS
Inside Zara's integration strategy:
Zara launched its first ever store in Spain, and now has expanded to 1,770 stores acorss 86 different countries. They produce over 450 million garments a year, and have a very efficient supply chain. Regular, small batch deliveries happen with clock-work precision twice a week to all of their stores around the world. Zara controlls its manufacturing and supply chain more than any other area of its business.
Zara’s overarching strategy is achieving growth through diversification with vertical integrations. It adapts couture designs, manufactures, distributes, and retails clothes within 2 weeks of the original design first appearing on catwalks. They own their supply chain, and really stick to the idea of 'fast fashion' and express it.
Zara keeps a significant amount of its production in-house and makes sure that its own factories reserve 85 percent of their capacity for in-season adjustments. It allows the organization to be flexible in the amount, frequency, and variety of new products to be launched. The wages of these European workers are higher than those of their developing-world counterparts, but the turnaround time is astounding.
They The wages of these European workers
are higher than
those of their
developing-
world
counterparts,
but the
turnaround time is
miraculous. Store managers communicate customer feedback on what shoppers like, what they dislike, and what they’re looking for. This information is then passed onto the designers, which then turn it into a sketch.