Zara and Mark & Spencer

Bobur Boboyorov. Individual Case.

1. The most important innovative thing Zara brought was its renewal of stock in stores in very short period. Bringing new products in such short time encouraged customers to visit Zara shops often and purchase something every time, boosting its sales year by year. From both operations and marketing perspective, changing two-thirds of stock in every two weeks is tremendous success.

Second important innovation Zara introduced was creative atmosphere within the organization. Design creation process was very simple and practical, allowing Zara designers to feel and observe the latest fashion trends. Having designed about 12,000 newly designed products, the company was a leading innovative designer in its industry.

Companies traditionally targeted only one of these different customer classes. Zara also managed to successfully target to different consumer groups with different brand names. This was also new practice in textile manufacturing industry. The company offered its highest quality luxury goods under Pull & Bear and Bershka brands targeting people with high income consumers, and offered average goods with good quality under Zara and Brettos brands targeting middle income consumers.  

Application of technology in both testing and designing was another innovative side of Zara. While computer assisted design tools was used to create prototype of a new model, special algorithmic software helped to evaluate success of a new product subject to test.

2. Although some features of their supply chains are similar such as central warehouse, as well as washing and packing process, there were subtle differences in these chains depending on business models of the companies. Product development process periods were dramatically different. M&S intended to continuously improve traditional models, which required to identify specifications one year before store delivery. On the other hand, thanks to flexible product development process, Zara minimized designing period to one day, plus manufacturing process in just 3-8 days. In this way, Zara was able to successfully replicate competitors trendy model in a couple of weeks.

Suppliers of raw materials were located in different locations. M&S chose its suppliers from near locations, mainly from western European countries. However, Zara decided to import them from China.

Amount of inventory kept in stores were also different. Since Zara goods are supposed to be placed in stores relatively shorter period, there was no need for them to keep large amount of inventory. At the same time, M&S had to keep inventory equivalent to seven weeks of sales.

Vertical integration of the companies were also different. When Zara was to purchase only silk and linen from suppliers, and then produce its own material, M&S was more dependent on suppliers since it was not fully transformed to vertical integration.