1. ZARA
Introduction
Contents
- SWOT Analysis
- New Operating Model
- Operation Enhancement
Conclusion
Premier 13 / Cairo

2. Zara 21st Century Task Force:
Zara global & Franchise Culture |
Search
Value Chain Expand Global Market
- No inventory - Decentralization
Operational Efficiency Intensify Franchise
- Vertical integration - Conditional integration
Culture Culture
- Open communication - Spread innovation
- 20th - - 21st -

3. Analysis Current System SWOT
S W
Overdependence on the
Vertically integrated European market
Short turnaround period Low cost competitiveness
Strategic initiatives to expand
international presence Local/Global Competitors
Positive outlook for Asia- Economic slowdown in Euro
Pacific apparel retail market
O T

4. New Operating Model
Spain HQ Vietnam Branch
From Sourcing to Sale Same organization
Planning - In-house & sub-contracting manufacture
Marketing for trendy garments
- create quality control organization
Design
Sourcing Sourcing
Mfg Mfg Only Trendy
Distribution Distribution
Sales Sales

5. New Operating Model Supply management
 Local Supplier @Vietnam
 Low Cost Fabric (China / Vietnam)
 Material transportation fee ↓
 Quality
 In-house Dyeing system
 Producing Equipments, Dye, etc from H.Q.
*. Quality Management Team to Fabric/Assembling (like HQ)
Local Garment
Supplier Fabric In-House Manufacture pieces
Out-
Dyeing Cutting Assembly sourced
H.Q. Dye Sewn &
Assembled
< Vietnam >

6. New Operating Model Manufacture/Logistics
 Manufacture at Asia
 Closer to the Asian Retailer & Quick Response – Geographical advantage
 Lower cost garments – Low labor cost & transportation fee
 Simplify Logistics @ Europe / Asia
 Europe & East America @Spain
 Pacific region (Asia, West America) @Vietnam
Trendy & Basic
Trendy
Basic
Manufacture Plants
Distribution Center
Retails

7. New Operating Model
Future Expansion
 Establish New Base Camp for Southern Hemisphere
 Where? Chile
 What? Manufacturing, and distribution center
 Why? Lower labor cost, politically stable, pacific cost
 When? 2 years later
 How? Following the Vietnam system Brand Turnover Area
Pull & Bear 161 154
 Strategy to implement ZARA system to Sister Brands
Massimo 184 182
 Integrate manufacturing, distribution system
Bershka 125 347
 Increase hypermarket & department store sales
 Create & operate Inditex shop Stadi 67 212
 Implement Zero inventory strategy ZARA 2,422 908

8. Operational Enhancement
Conditional Disintegration
 New Policy for New Market
 Adopt franchise policy for Asian market
 Maintaining Cultural Value
 Reinforce education system for franchise owner
 Free communication channel between local production manager & HQ
HQ
Edu/Design Edu.
Feedback Trend
Feedback
VB FO
Goods

9. Summary – Asian/Pacific market
• Localized Plants (Trendy) & Logistics
Model • Market coverage : Asia / Pacific (west USA)
• Secure raw Material
Benefit • Lower cost Manufacture & Distribution
• Access easily “Market Trend” @Asia
Concern • Franchise : keep culture & reinforce communication