It has provided Zara with the best competitive advantage, both at international and local level (Berfield and Baigorri, 2013). Customer loyalty is a string advantage and to achieve customer loyalty, you have to focus on several things. contact: email@example.com, firstname.lastname@example.org. In this way, ZARA and the entire Inditex company have managed their human capital very well. Zara’s Secret for Fast Fashion. Zara offers classy high quality clothes based on consumer trends. It is because customers trust and like to shop only from the brands that have created a string and responsible image. Styles are updated frequently and faster inside ZARA stores. Lower prices and great styles do not mean that the brand compromises on fabric quality. Owned by the distribution group Inditex, we had a look at what makes Zara so fast that the New York Times called it "mind-spinningly supersonic ". Notes et références [modifier | modifier le code] ↑ Sous l'influence de la traduction française de Competitive Avantage . Apart from being agile, its supply chain and production system are efficient and designed to deliver results faster. Trends change fast and customers are always looking for the freshest styles in the market. High level customer loyalty is a distinct advantage which translates into higher sales and revenue. This will not help you find the right level of exposure. Zara goes after the number of customers as well as its supply chain among those brands which also operate in Malaysia. In comparison to other retailers, most of Zara’s suppliers are local European establishments. The fast fashion model adopted by ZARA is also a strong source of competitive advantage. Competitive advantage of Zara Apart from Zara, there are many different brands operate in Malaysia, such as H&M, Mango, Uniqlo. It is extremely rare to find fashion companies that manufacture as well as design their products. So, by focusing on customer service it has been able to strengthen the relationship between the brand and the customers. They have a whole team that deals with meeting the latest fashion … Zara, which is ranked at number 51 for the World’s Most Valuable Brands, according to Forbes List 2017, is a Spanish fast fashion retail brand introduced in 1975. Zara is a company that well known for its best and quality products since the year 2007(Paloma, 2013). It does knot invest in marketing and instead all the marketing happens though the physical and online stores as well as publicity. By applying a “fast fashion” strategy, Zara have accomplished a unexpected increase in profits and market share. In that case, you will not have to distribute pamphlets in the streets to announce new arrivals. Such brands enjoy higher loyalty as well as higher sales. (2017, July 29). 4. My point here isn't so much about how Zara works, or what it is that gives Zara its competitive advantage. Last year, it expanded its e-commerce presence into several new markets of Asia including India and Malaysia. There are growing concerns that fast fashion companies provide low-quality products due to their desire to sell more and cut their costs (Whitehead). Zara’s second competitive advantage is the fact that it manufactures and designs the majority of the attires that it sells in its stores. Customer service is also an important focus area for ZARA and helps retain customers in larger numbers. Zara has a very strong supply chain because they do not outsource any of their operations, and because of that they are able to deliver high quality and various varieties of products. Moreover, ZARA stores are located at prime locations all around the world where they attract higher number of footfalls. Abhijeet has been blogging on educational topics and business research since 2016. Michael Porter , « The Competitive Advantage of Nations », HBR , mars-avril 1990, p. 75. Overall, ZARA is in a strong position to achieve faster growth in near future. Though there is a cost advantage in their approach in regards to labour, the lack of flexibility in changing orders based on current trends hinders their operational efficiencies. Apart from that the brand is investing in emerging technologies to make shopping at Zara a distinctly great experience. These stores are designed to reflect the modern trends in fashion, fun, music and technology. The products are made from sufficiently good quality fabric. This has several benefits and it all keeps customers engaged and bringing them more frequently to the ZARA stores. Zara is ‘fast fashion’. Fashion cycles change after at ZARA. This has several benefits and it all keeps customers engaged and bringing them more frequently to the ZARA stores. Although Zara's advantage over its competitors is not so much a result of IT leverage, the sustainability of its competitive edge might be at risk due to a lack in IT investment.The current assumption for the IT investment states about 18,000 hours. Another major competitive advantage is in an area with … The brand provides high end fashion at low prices. Apart from taking special care in terms of hiring the best talent, it has also established a strong culture that keeps its employees motivated and engaged. Competitive Advantage. A very large number of brands are trying to grab the largest share of the same pie. Firstly, Zara can introduce new product rapidly. It offers good quality products that are as stylish as those offered by the high end fashion brands but still, they are not as costly. Design The designers go to fashion shows, they develop sketches and while they select fabrics, the price of each product is already determined. It also helps you market your brand and products easily. This report examines Zara, a strategic unit in the Inditex group, which is shown to be a pragmatic example of the development of market orientation in a company, as a basis for the company’s performance and competitive advantages. This also helps them reduce waste and always sell of their new designs as they are introduced in the stores. It is commendable that they have been able to maintain their position in the ever growing market of fast fashion industry. It is the flagship brand of Inditex that also accounts for the largest part of the company’s revenue. The good quality is also a reason apart from the lower prices of ZARA products that helps attract and retain customers in larger numbers. These stores are designed to offer a great in-store shopping experience and create highest satisfaction for customers. It still offers good quality products. Moreover, ZARA does not overstock its stores and the demand for its products remains high because a style available today will not be there a few weeks later. By accept the “fast fashion” strategy the company has been able to decrease its make down sale to 15 to 20%. In contrast, the traditional industry’s average is 30 to 40%. By having 50% of manufacturers in Spain, 25% in Europe and 25% in Asia, the company can have changes in merchandise in unparalleled speed. The world is so dynamic, with new products and new competitors rising seemingly overnight, that truly sustainable advantage might seem like an impossibility. Short lead times is Zara one of the most important competitive advantages over its competitors. Making customer service a central focus was important for another reason too for ZARA. Imagine being located at a place where your customers go rarely. ZARA’s greatest strength lies here. ZARA generates the highest revenue of all the brands owned by Inditex. Price is not an advantage anymore: Offering the latest fashion lines at affordable prices continues to be a strategic advantage for Zara, but cannot continue to be the only one. However, while managing the prices, it has not lost focus on quality. They have a whole team that deals with meeting the latest fashion trends and thus delivering fast fashion products to their customers. Retrieved December 28, 2017, from https://www.forbes.com/sites/walterloeb/2015/03/30/zara-leads-in-fast-fashion/#1deb44ec5944, Designed by Elegant Themes | Powered by WordPress, Click to share on Twitter (Opens in new window), Click to share on Facebook (Opens in new window), https://www.popsugar.com/fashion/Zara-Facts-37094189, https://hbswk.hbs.edu/archive/zara-s-secret-for-fast-fashion, https://www.forbes.com/sites/walterloeb/2015/03/30/zara-leads-in-fast-fashion/#1deb44ec5944. STRATEGY AND SUSTAINABLE COMPETITIVE ADVANTAGE- THE CASE OF ZARA FASHION CHAIN Sunhilde CUC, Simona TRIPA University of Oradea, Faculty of Textiles and Leatherworks, e-mail: email@example.com, firstname.lastname@example.org, Keywords: Company Strategy, Competitive Advantage, Operational Effectiveness, Strategic Positioning Abstract. Zara has been able to convert latest fashion into products and meet the needs of their customers. The fast fashion model adopted by ZARA is also a strong source of competitive advantage. Location has a special importance in terms of strategy for the retail businesses whether fashion, food or grocery. Instead it relied upon a well synchronized supply chain. Thus, Zara’s store carries diverse range of products at all times as compared to other competitors. ZAR has achieved all this without investing any thing in marketing. Zara faces competitive pressure from its competitor H & M, which is known globally for its unique and different fashion lines due to collaborating with different designers, an aspect that is different from Zara. Moreover, its focus on HR has also helped bring great results. Zara has been able to convert latest fashion into products and meet the needs of their customers. Given these challenges threatening sustainability and viability of companies in the long term, it is incumbent upon firms in the fashion industry including Zara to enhance focus on developing and implementing strategies to improve bottom line, enhance profitability and … Moreover, ZARA does not overstock its stores and the demand for its products remains high because a style available today will not be there a few weeks later. Competitive Advantage Of Zara 1214 Words | 5 Pages Initially, the efficient supply chain of the business is a good method to enhance its competitive position. ZARA has been known as the most successful retailer of fashionable clothes at moderate prices. Styles are updated frequently and faster inside ZARA stores. ZARA is a customer oriented brand which apart from prices and quality places hear focus on customer experience. One of these is the fact that it has always been adaptable to the new trends, which is one of the vital factors in the fashion industry. This is made possible due to fact that Zara has developed its own manufacturing and designing units in addition to the selling units. Instead, the value of Zara’s brand comes from its supply chain and its ability to add value to every stage of the supply chain (Porter, 1985). It has even been able to overcome the giants such as the H&M and the Gap. What Is The Competitive Advantage Of Zara 1778 Words8 Pages An advantage that organizations has over its rivals, allowing it to produce more prominent deals or margins and/or retain a bigger number of clients than its opposition. One of these is the fact that it has always been adaptable to the new trends, which is one of the vital factors in the fashion industry. Some other key strengths that have helped it achieve an edge over its rivals include its pricing strategy, focus on quality and customer service and the excellent in-store experience it has designed for visitors. Zara’s business philosophy depends on the four main values of beauty, clarity, functionality, and sustainability which also reflect the inner environment of Zara’s stores. Cost Advantage of Zara 4.1 Cost advantage through Value Chain Analysis of Zara. How does Zara add value for the customer through major logistics functions?Warehousing: The only warehousing done in this system is local and brief for the component parts and the finished items. Zara can obtain a competitive advantage from one or both sources, depending on the depth and breadth of its Value Chain Analysis. 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