Fashion and Zara Essay Example for Free

mode and Zara Es speculateAt the announcement of her engagement to Spains Crown Prince Letizia Ortiz Rocasolano wore a modishness white pant suit. Within a few weeks, hundreds of European women sported the same look. Welcome to a mode, a trend that sees garment retailers frequently purchasing small quantities of merchandise to stay on top of emerging trends. In this world of hot today, gauche tomorrow, no lodge does fast fashion better than Zara international. Shoppers in over 70 countries be fans of Zaras knack for bringing the latest styles from sketchbook to clothing rack at lightning speed and reasonable prices. ot replenished.Instead they are re backsided with new designs to create scarcity value-shoppers cannot be reliable that designs in origin one day will be available the next. Store managers track gross revenue data with handheld computers. They can reorder hot items in less than an hour. This lets Zara know whats securities indus nerve-wracking and whats not when look doesnt pan out, designers promptly put together new products. fit to Dilip Patel, U. K. commercial director for lnditex, new arrivals are rushed to store sales floors still on the dim p dyingic hangers used in shipping.Shoppers who are in the know recognize these designs as the newest of the new in brief after, any items left over are rotated to Zaras standard wood hangers. Inside and out, Zaras stores are oddly dressed to strengthen the brand. lnditex considers this to be of the greatest importance because that is w present shoppers ultimately decide which fashions make the cut. In a faux shopping street in the basement of the companys head take ins, stylists craft and photograph eye-catching layouts that are e-mailed each two weeks to store managers for replication.Zara stores sit on some of the worlds glitziest shopping streetsincluding New Yorks Fifth Avenue, near the flagship stores of in the lead international fashion brands which make its reasonable prices stand out. Inditex gives people the most up-to-date fashion at accessible prices, so it is a real alternative to high-end fashion lines, said Luca Solca, senior research psychoanalyst with Sanford C. Bernstein in London. That is good news for Zara as many an(prenominal) shoppers trade down from higher-priced chains. Catfights on the Catwalk Zara is not the sole(prenominal) player in fast fashion.Competition is fierce but Zaras overwhelming success (recent sales were over $13 billion) has the competition scrambling to keep up. San Francisco-based Gap, which had been the largest independent clothing retailer by revenue until Zara bumped them to second place in 2009, recently posted a 23% decline in full-year sales and had plans to open a modest 50 new stores. Only time will tell if super-chic Topshops entry into the American market causes a wrinkle in Zaras success. Some fashion analysts are referring to all of this as the democratization of fashion bringing high(eR) fashion to low (er) income shoppers.According to James Hurley, a senior research analyst with New York-based Telsey advisory Group LLC, big-box discount stores such as Target and Wal-Mart are emulating Zaras ability to study emerging fashions and tip out look-a- likes in a matter of weeks. In general Hurley said, the fashion cycle is becoming live wire and more immediately accessible. In Fast Fashion, Moments Matter Because style-savvy customers expect shorter and shorter delays from runway to store, Zara International gives a fictive team of more than 200 professionals to help it keep up with the latest fashions.It takes retributory two weeks for the company to up-date existing garments and get them into its stores new pieces hit the market twice a week. Defying the recession with its cheap-and-chic Zara clothing chain, Zaras set up company Inditex posted strong sales gains. Low prices and a fast response to fashion trends are enabling it to challenge Gap, Inc. , for top ranking among gl obal clothing vendors. The improved results highlight how Zaras formula continues to use even in the economic downturn. The chain specializes in lightning-quick turnarounds of the latest designer trends at prices tailored to the spring chickenabout $27 an item.Louis Vuitton fashion director Daniel Piette described Zara as possibly the most innovative and desolate retailer in the world. Inditex Group shortens the time from order to arrival by utilizing a complex dodging of just-in-time deed and inventory reporting that keeps Zara ahead. Their distribution centers can have items in European stores within 24 hours of receiving an order, and in American and Asian stores in nether 48hours. Theyre a fantastic case study in terms of how they manage to get product to their stores so quick, said Stacey Cartwright, CFO of Burberry Group PLC.We are redolent of their techniques. lnditexs history in fabrics manufacturing made it good business sense to internalize as many points in the su pply chain as possible. Inditex controls design, production, distribution, and retail sales to optimize the flow of goods, without having to share profits with wholesalers or intermediary partners. Customers win by having access to new fashions while theyre still fresh off the runway. During a Madonna concert tour in Spain, Zaras quick turnaround let young fans at the last show wear Madonnas outfit from the first one.Twice a week Zaras finished garments are shipped to logistical centers that all simultaneously distribute products to stores worldwide. These small production batches help the company avoid the risk of oversupply. Because batches eer contain new products, Zaras stores perpetually energize their inventories. Most clothing lines are A whizz Fashion Culture With a kalework of over 1,600 stores around the world, Zara International is Inditess largest and most useful brand, bringing dwelling 77% of international sales and nearly 67% of revenues. The first Zara outlet clear shop in 1975 in La.Coruna. It remained solely a Spanish chain until opening a store in Oporto, Portugal, in 1988. The brand reached the United States and France in 1989 and 1990 with outlets in New York and Paris, respectively. Zara went into mainland China in 2001 and expand into India in 2009. Essential to Zaras growth and success are lnditexs 100 plus textile design, manufacturing, and distribution companies that employ more than 80,000 workers. The lnditex group began in 1963 when Amancio Ortega Gaona, chairman and founder of Inditex, got his leave in textile manufacturing.After a period of growth, he assimilated Zara into a new holding company, Industria de Diseno TextiI. Inditex has a tried-andtrue strategy for entering new markets start with a handful of stores and gain a critical mass of customers. Generally, Zara is the first lnditex chain to break reason in new countries, paving the way for the groups other brands, including Pull and Bear, Massimo Dutti, and Bershk a. lnditex farms out much of its garment production to specialist companies, located on the Iberian Peninsula, which it often supplies with its own fabrics.Although some pieces and fabrics are purchased in Asiamany of them not dyed or only partly finishedthe company manufactures about half of its clothing in its hometown of La Coruna, Spain. HM, one of Zaras top competitors, uses a slightly different strategy. Around one quarter of its stock is made up of fast-fashion items that are designed in-house and farmed out to independent factories. As at Zara, these items come to quickly through the stores and are replaced often by fresh designs. precisely HM also keeps a large inventory of basic, everyday items sourced from cheap Asian factories. lnditex CEO Pablo Isla believes in cutting expenses wherever and whenever possible. Zara spends just 0. 3% of sales on ads, making the 3-4% typically spent by rivals seem excessive in comparison. Isla disdains markdowns and sales as well. Few can criticize the results of Islas frugality. Inditex recently opened 439 stores in a wizard year and was simultaneously named Retailer of the Year during the World Retailer Congress meeting, after raking in net profits of almost $2 billion.Perhaps most important in an industry based on image, Inditex secured bragging rights as Europes largest fashion retailer by overtaking HM. According to Jose Castellano, lnditexs deputy chairman, the group plans to retell in size in the coming years while making sales of more than $15 billion. He envisions most of this growth taking place in Europeespecially in trend-savvy Italy. Fashion of the Moment Although Inditexs dominance of fast fashion seems virtually complete, it isnt without its challenges. For instance, keeping production so close to home becomes difficult when an ncreasing number of Zara stores are far-flung across the globe. The efficiency of the supply chain is coming under more pressure the farther abroad they go, notes Nirmalya Ku mar, a professor at London Business Schoo1. Inditex plans to impel its Zara online store in the United States in 2011. There is every indication that it will do well. A Zara application for the iPhone has been downloaded by more prospective clients in the United States than in any other market, fit in to chief executive Pablo Islamore than a million iPhone users in just three months.In 2010 Zara furled out its online store in six European countries and plans to progressively add the remaining countries where Zara operates. Analysts worry that lnditexs rapid expansion may bring undue pressure to its business. The rising number of overseas stores, they warn, adds cost and complexness and is straining its operations. Inditex may no longer be able to manage everything from Spain. But Inditex isnt worried. By intimately managing costs, lnditex says its current logistics system can handle its growth until 2012. Jose Luis Nueno of IESE, a business school in Barcelona, agrees that Zara is here to stay.Consumers have become more demanding and more arbitrary, he saysand fast fashion is better suited to these changes. But does Zara International have what it takes to succeed in the hypercompetitive world of fast fashion? Or is the company trying to expand too quickly?1. In what ways are elements of the classical counsel and behavioral management approaches evident at Zara International? Specify exactly which elements are evident and how they are evident. 2. How can the systems surmisal and the theory of contingency thinking explain the success of some of Zaras distinctive practices?List specific points as to how these theories are directly or indirectly related to Zaras practices.3. Zaras CEO has asked your management consulting whole for advice on how the profligate can make immediate improvements to stay ahead of competition. You must choose one of the consultants mentioned in Chapter 2 for this job (ex Frederick Taylor, Max Weber, Mary Parker Follett). Which o ne/s would you assign to Zara, and why? Explain your option in detail by discussing exactly what points of the consultant from his/her well-known theories are applicable to Zara and how these may be apply to the company in modern day. . Discuss each of your suggested improvements for Zara in detail. (More specific study, examples).5. Gather the latest information on competitive trends in the apparel industry, and on Zaras latest actions and innovations. Then answer the following a. Is the firm continuing to do well? What makes you say so? (List statistics of competition, reviews, etc. Cite sources. ) b. Is Zara adapting in ways necessary to stay abreast of both its major competition and the pressures of a changing global economy? What makes you say so?