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Essay / Research Paper Abstract
An 8 page paper discussing Zara's unconventional approach to its supply chain as a point of competitive advantage. The paper discusses Zara in relation to Gap and H&M; identifies cautions for the future; and makes recommendations for future strategy. Bibliography lists 6 sources.
Page Count:
8 pages (~225 words per page)
File: CC6_KSstratZara.rtf
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Unformatted sample text from the term paper:
canceled a large lingerie order and Amancio Ortega feared bankruptcy because all of his capital was in that single order. Rather than lose the merchandise, Ortega opened a store
and sold it himself. Ortega called the store Zara. Later, he would say that to be successful in the apparel industry, "you need to have five fingers touching
the factory and five touching the customer" (Ferdows, Lewis and Machuca, 2004). That is precisely how Zara operates, and how it can dash through the stages from design to
finished product in only 15 days, in an industry where supply chain planning typically requires months to complete. Zaras Strategy The secret to
Zaras speed lies in large part with its "in-house design team based in La Coru?a, Spain, and a tightly controlled factory and distribution network" (Tiplady, 2006), along with its penchant
for small batches. Zara is a fashion imitator as well, offering designer-like items at mass market prices, and generally before fashion houses are able to produce similar, higher-priced items.
The result for Zara is that it successfully has been able to bridge the gap between Porters classifications of low price and product differentiation. Generally, a company or
brand many only occupy a single place in the marketing mix matrix: a company cannot be seen as bargain basement as well as premium quality without alienating consumers and losing
customers (Porter, 1980). Zara, however, has been able to place itself on the continuum barely above "bargain basement" and nearly imperceptibly below premium
quality by serving fashion trends and maintaining an air of rarity born of its small lot sizes. Its designers are young (typically in their 20s), and so they design
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