Zara Customer Survey Analysis Report

1627 words - 7 pages





INDITEX is a Spanish multinational clothing company headquartered in Arteixo, Galicia, Spain. It is made up of almost a hundred companies dealing in activities related to textile design, production and distribution. Amancio Ortega, Spain's richest man, and the world's third richest man, is ...view middle of the document...

Perhaps it’s most unusual strategy was its policy of zero advertising; the company preferred to invest a percentage of revenues in opening new stores instead. This has increased the idea of Zara as a "fashion imitator" company and low cost products. Lack of advertisement is also in contrast to direct competitors such as H&M and United Colors of Benetton.
Zara was described by Louis Vuitton Fashion Director Daniel Piette as "possibly the most innovative and devastating retailer in the world."


* Zara develops a business model that incorporates moderate prices with new clothing styles faster than its competitors.
* It maintains design, production and distribution processes well to respond to the quick shifts in consumer demands.
* They are flexible enough to produce 12000 new items annually.
* The company can design a new product and have finished goods in its stores in four to five weeks.
* They believe in shortening the product life cycle =greater success in meeting customer preferences
* They have a design team of 200 people, which produce 12000 new styles a year.
* They keep a close watch on new trends and buying behavior through market research.


* Zara is an example of a company which exploited the value chain to get competitive advantage. The company aims to achieve the customer satisfaction by introducing variety of fashionable products
* One distinctive feature of the value chain system of Zara is its agility. In other words, flexibility and quick response to the market demand.
* Zara excels by targeting technology investment at the points in its value chain where it will have the most significant impact, making sure that every penny spent on technology adds value.


H & M Hennes & Mauritz AB (H&M) is a Swedish multinational retail-clothing company, known for its fast-fashion clothing for men, women, teenagers and children.
H&M exists in 43 countries and as of 2011 employed around 94,000 people. The first store was opened on the high street of Västerås, Sweden in 1947. It had 2,325 stores at end of 2011 and 2,629 stores at end of August 2012. It is ranked the second largest global clothing retailer, just behind Spain-based Inditex (parent company of ZARA), and leads over third largest global clothing retailer, United States based GAP Inc.

The design team in the company’s Sweden office controls the steps of production, from merchandise planning to establishing specifications, and production is outsourced to approximately 800 factories in Europe and Asia. These facilities are used for horizontal division of labor, rather than being integrated.


* Zara, unlike its competitors DOES NOT use outsourcing
* Zara’s competitors face a lack of flexibility in changing orders based on current trends.
* Inventory costs are higher for competitors because orders are...

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