Report on Centralised Supply Chain Network of Zara
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Added on 2020-06-06
Report on Centralised Supply Chain Network of Zara
Added on 2020-06-06
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Table of ContentsINTRODUCTION...........................................................................................................................1Main Body.......................................................................................................................................1Management Philosophies and Style of Zara...................................................................................5Centralized supply chain of the Zara...............................................................................................6Zara competitive advantages............................................................................................................7Market Expansion strategy and challenges......................................................................................8Future challenges of the Zara...........................................................................................................8CONCLUSION................................................................................................................................9REFERENCES..............................................................................................................................11
INTRODUCTIONInternational business environment is a process under which any business enterprise enterinto the new country in order to gain effective profitability and market share. In a simple word itcan be said that international business is a commercial transaction across the country border.While any firm sale and purchase the good and services outside of the country then it is knownas the international business (Liu, 2015). The major aim of this report is to understand thebusiness expansion and management philosophy with respect of Zara company. It is a Spanishclothing and accessories retailer which is based on the Arteixo and Galicia. In this report, asystematic description has been included about how Zara maintained a centralised supply chainnetwork. Furthermore, future challenges which faced by the Zara company in its global businesshas been also included in this assignment.Main BodyIn the present time, every business firm requires a sustainable growth and profitability inthe market by which it can gain large market share and profitability. In order to attain thisobjective, various companies sues several kinds of the business tactics and strategies in themarket (Grünig and Kühn, 2015). There are very huge competition in the market so in order toface competition and develop its own image in the market, companies uses strategic action suchas business expansion, product differentiation, customisation etc. Business expansion is veryimpressive strategy in order to gain the huge sustainability and market share in the present time.While any organisation sale and purchase the commodities out of the national boundary then it isknown as the international business. With assistance of this global strategy, form can easilydevelop its competitive advantage and attract the large customers toward the company's productand services. In a simple word it can be said that business expansion in the global market is astrategy by increase the numbers of stores and open up the new stores in the different physicallocation.Zara is one of the famous clothing and fashion retailer which have value of 9.1 billion. Itis a flagship chain stores which contributed to 66% of the group's annual sales income in the2012.The major objective of the Zara company is to deliver the high and impressive quality ofproduct and services to customer and meet their demand and requirement about the fashionaccessories and clothes (Anton, 2015). Its aim is to develop its competitive position in themarket and attract the large numbers of the customer toward the company. It wanted to become1
the number one clothing and fashion accessories in the market. In order to attain these allobjectives and aim, Zara has decided to enter in the global market such as France, united state,Greece, Belgium, Sweden, Japan, Singapore, Russia, Malaysia, China, Morocco, India, Costa,Rica, south Korea, south Africa, Australia etc. In the 2010 it has launched its own onlineboutique by which it has able to sale its product and services in various countries. According toits global journey, the market oriented business model of the Zara is based on the effective andhigh integrated supply logistics chain network, a compressed production buyer cycle, rapidfashion release etc. Zara have gain high success by operating both eco efficient concept storeand e-commerce shopping in the 86 countries (Grünig and Kühn, 2015). However, at the time ofglobal expansion of the business, Zara has faced several kinds of components of the internationalbusiness environment. These components are as follows-Political factor- Political factor includes the governmental rules, regulation, code of conduct,legislation, taxation policies, govern practices etc which every firm required to follow at the timeof business expansion. While Zara have entered ion the several countries like France, unitedstate, Greece, Belgium, Sweden, Japan, Singapore, Russia, Malaysia, China, Morocco, India,Costa, Rica, south Korea, south Africa, Australia etc then it has to follow each countries politicaland regulations. Political turmoil can also affect supply chain and provide various difficulties forbrands. In order to decrease this political difficulties, Zara have limiting its supply chainoperation to its home country and neighbouring nation (Bull and et.al., 2016).Moreover,Zaracan adopt various strategies in order to avoid influence of these factors on its business activities.The company can adopt strategy to comply with various government rules in order to avoidimpact of these factors on business success and growth.Economical factor- This factor includes the countries economic condition like inflation,recession, interest rates, pricing policies etc. These factors have direct influence on consumerbehaviour as well as on income. These factor may have negative impact on the profitability asrevenue generation capacity of organisation. These factors have positive impact on the companyas decrease in exchange rate may provide transactional benefit to firm. In order to enter into thedifferent market, Zara have to understand the economic condition of the different countries. Zarahave great strategy that is of affordable pricing in every country. Affordable pricing strategyhelped to the Zara company for fight the low economic activities.2
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