Zara Fast Fashion Case Study

Case study: Zara

Fast Fashion

Zara’s strategy until 2006

Among Inditex’s global strategy — that is to keep each of its brand clearly separated from one another to conquer different segments of the international clothing market — we can highlight Zara’s. Surprisingly, in comparison to its competitors, Zara has kept its production in its home country that is to say Spain. Furthermore, Zara decided not to « over promote » its product as some competitive firms did (United Colors of Benetton or H&M for instance). What creates the brand image is basically the design and the way their stores are laid-out. The point is to keep producing quality products at a reasonable price selling it in numerous « signature stores ».

Being the most important of its subsidiaries regarding profit and quantities, Zara is key to Inditex’s success. What makes the difference between Zara and its competitors (and also its added value!) is also that they have young and opinion-leader designers who are able to adapt their design any time and not only twice a year (Fall/Winter - Spring/Summer). In addition, we should notice that it basically owns the whole supply chain in order to control the production and to make possible the fact that the time between design and production is 14 days maximum.

Zara’s main issues

First, dealing with supply chain. If it’s true that it can control every phase of the production, Inditex has to do it for 6 different companies since they decided to separate clearly each of their brands. Plus, without outsourcing at all, they cannot benefit from economy of scale because it possesses less manufacturing facilities than it would be needed to do so. Eventually, the production cost is way higher for Zara than for its competitors because they need to be very flexible and to change its organization regarding production very often since they promised to renew their collections monthly or even in a shorter time. Also, this type of supply chain management doesn’t allow it to enter foreign markets or at least far foreign markets as Asia or the US.