What Are Zara’s Core Competencies?

What are Zara’s Core competencies?

Zara has a rare combination of factors that is inimitable and is central to the way the firm operates and produces value to the customer.

The following are some of these factors:

1. Speed

With a market-driven strategy, Zara’s supply chain operations have the capability to respond quickly and efficiently to consumer demands to offer latest fashion at reasonable prices. The firm has developed a unique capability in all stages of design, production, distribution, and retailing of clothes.

The fashion retail industry is fast changing and fashion trends have a short life cycle. In this market, it is very important to be nimble in bringing newer products to the markets and replenish them quickly when needed.

Zara designs (and orders) all its products itself using a great “commercial team” consisting of designers, “market specialists”, and “buyers”- all working in the same premises (at its La Coruna headquarters). These teams work on next season’s designs but, simultaneously and continuously; also update the current season’s designs. The most important phase of product development is design and having an own dedicated team helps reduce the time thereby increase the speed. It is difficult for other competitors to replicate such a team and hence it takes suboptimal time for them to bring new fashion items.

Zara fully exploits automation and technology wherever possible. For example, the five-storied distribution center has the most sophisticated and up-to-date automated systems. This greatly helps reduce lead times and it is difficult for a competitor to replicate these systems since they were developed by Zara in-house and has proprietary implementation. Also, the store managers use hand held digital devices to get market information and collaborate with departments in Headquarters

In addition, Zara imposes a strict discipline for stores for placing orders and receive shipments twice per week. The pre-labeled and priced goods are quickly displayed as soon as they are taken out from delivery trucks. As a result, Zara’s supply chain is able to react faster and also have precise forecasts and more reliable market information.

2. High Variety Cutting Edge Fashion

Zara caters to a wide range of demographics in the fashion retail industry. This is made possible by its young, innovative and prolific designers (in its La Coruna headquarters) and due to the scale of operations in the central warehouse.

Such a product mix offers a great competitive advantage to Zara since it takes years for a competitor to develop the similar proficiency in a fast changing fashion market.

Zara has about 100 designers with