Created by Sudhanshu Jaiswal, IIITD & M Kancheepuram, during a marketing internship by Prof. Sameer Mathur, IIM Lucknow

2. Outline:
1. History and Background
2. Foretelling of Fashion
3. Production Planning
4. Procurement
5. Market- Logistics Decision
6. Company’s Success
7. Zara’s Store Worldwide
8. Online Presence
9. Website
10.Questions
11.Disclaimer

3. History & Background of ZARA
 ZARA is a Spanish clothing and accessories
retailer based in Arteixo, Galicia.
 Founded in 24 May ,1975 by Amancio Ortega
and Rosalía Mera.
 Zara was described by Louis Vuitton Fashion
Director Daniel Piette as "possibly the most
innovative and devastating retailer in the
world.

4.  Zara needs just two weeks to develop a new product
and get it to stores, compared to the six-month
industry average, and launches around 10,000 new
designs each year.
 1763 stores , 78 countries worldwide.
 Zara’s mission is to provide fast and affordable
fashionable items.
 Zara welcomes shoppers in 86 countries to its network
of 1.763 stores in upscale locations in the world's
largest cities.
 Zara's approach to design is closely linked to their
customers.

5. Foretelling of Fashion
They do Extensive Market
Research.
 Bring Frequent new Styles.
 To Improve Products and reduce
errors, They keep Product life short.
 Continuous Customer Feedback.

6. Production Planning
 Have a Centralized Design and
Production Centre.
 Produces only small Quantity of each
collection and is willing to experience
occasional shortages to preserve an
image of exclusivity.
 Factories operate on a single-shift
mentality, and can change quickly
according to unforeseen demands
Have a constant flow of data
throughout the supply chain

7. Procurement
 Separate Procurement Staff for each
Clothing line.
 It stores half of production in House.
 Zara sources fabric, other inputs and
finished products from external suppliers
 Uncomplicated items are outsourced to
China
It also owned 20 other factories for
internal manufacturing .

8. Market- Logistics Decisions
1. How Should we handle Orders (Order Processing) ?
 Online
 Store deliveries take 2 to 3 working days,
standard deliveries, 2 to 3 working days
and express deliveries, between 1 and 2
working days.
 Delivers to the address of costumer or to
the nearest ZARA Store.
 Only delivers in UK Mainland.

9. 2. Where should we locate our
Stock (Warehousing) ?
 Zara's warehouse is 5 million square feet .
 “High-velocity” shipping.
 Merchandise is selected, sorted, and routed to the
“lungs” of the warehouse.
 Merchandise is delivered, Retailers hold products in
local distribution centers or in retail store stockrooms
 Electronically linked store to the company’s
headquarters
 Focus on : speed and flexibility.

10. 3. How much stock should we hold (Inventory) ?
 Zara is fully aware of the saying, “inventory = death”.
 It avoids piling up inventory in any part of its supply
chain from raw materials to finished products.
 Inventory optimization models are put in place to help
the company to determine the quantity that should be
delivered to every single one of its retail stores.
 The stock delivered is strictly limited, ensuring that each
store only receives just want they need.
 Focus on reducing response time.
 Launched approximately 11,000 new items per year,
compared to 2,000 - 4,000 for H&M and Gap .
 The batch is small, so there’s not a ton of unsold
inventory to get rid of.

11. 4. How should we ship goods (Transportation) ?
 Route and schedule optimization.
 Effective and efficient transportation
network.
 Queue management systems for turnaround
and waiting period of the ships at the docks.
 Air Travel (Main Costs) – Optimize routs to
minimize cost and travel time.
 Coordinates with all aspects of logistics
 Inventory Management.
 Ability to distribute merchandise within 2
weeks.

12. Company’s
Success
1. Design and Production.
It lies within Four key strategic elements :
2. Logistics

13. 3. Customers 4. Stores

14. Zara Stores World Wide
By Region.

15. By Number of Stores.

16. Online Presence:
YouTube :
https://www.youtube.com/user/zara
Facebook :
https://www.facebook.com/Zara

17. ZARA’S WEBSITE
http://www.zara.com/

18. Features of Website :
1. Products are categorically divided
for:
1. Men
2. Women
3. Kids
2. Kids category is further divided
further for kids of different ages.
3. Variety of Products.
4. Special TRF category.

19. Questions :
1. Would Zara's model work for other retailers? Why or Why not?
No, Zara’s model work will not work for other retailers because :
1. More distinctive compared to others
2. They keep small of clothes
3. Factory based in Europe
4. Not waiting for new inventory
5. Distribution cost is less
6. Creates value to customer -new clothes -pricing according to location
7. Competitive advantage is products being "fresh"

20. 2. How is Zara going to expand successfully all over
the world with the same level of speed and instant
fashion?
1. Zara would have to get the best designers to work for them to spread all over the
world.
2. They ship fast, they sell to the consumer style demands.
3. Zara employees help forecast fashion trends instantly giving Zara a competitive
advantage in speed.
4. Create production and distribution hubs in strategic regions to serve the stores or
outlets in neighboring countries. Production and distribution shall be done in each hub.
5. Outsource the distribution for fast delivery of stocks to stores in other countries, but
retain their production center in Spain, and strengthening the communication facilities

21. DISCLAIMER:
Created by Sudhanshu Jaiswal, IIITD & M Kancheepuram, during
a marketing internship by Prof. Sameer Mathur, IIM Lucknow