Analysis of ZARA's Business Operations and Management Strategies

This report provides an in-depth analysis of ZARA's business operations and management strategies. It begins with an introduction to business operations, defining the term and explaining its relevance to ZARA, a global apparel retailer. The report then outlines the major functions associated with business operations, such as production, supply chain, logistics, location strategies, quality control, and human resources. A case study overview provides context, describing ZARA's business model, its focus on sustainability, and its commitment to using sustainable fabrics and renewable energy. The core of the report evaluates ZARA's operational management decisions in relation to these various functions, assessing their effectiveness in achieving the company's goals, particularly in the context of its sustainability initiatives and its commitment to adapting to changing customer preferences. The report highlights ZARA's use of just-in-time production, agile supply chains, and strategic location choices to maintain its market leadership. The conclusion summarizes the key findings and emphasizes the importance of efficient business operations for maximizing profitability and achieving organizational objectives.

INTRODUCTION
TO BUSINESS
OPERATIONS AND
MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Explanation of term business operations in context with selected organisation ........................1
Major functions associated with business operations.................................................................1
Overview of case study and description about selected organisation.........................................2
Evaluation of organisation's operations management decisions in context with different
functions......................................................................................................................................3
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Business operations are referred to those activities and processes which are carry-out by
organisations on regular basis to enhance their overall value and attain maximised profits.
Business operations include different kind of functions that benefits a firm in performing each
activity with high efficiency (Andersen and De Boer, 2019). This report is prepared in context to
ZARA which is a Spain based apparel retailer, headquartered in Arteixo, Spain. This
organisation is operating at global level and manage their outlets at around 10,000 stores. This
report will mention about the meaning of term business operation and main functions which are
associated with business operation of an organisation. Information about selected company will
be discussed and at last management decision of company will be evaluated in a brief manner.
MAIN BODY
Explanation of term business operations in context with selected organisation
Business operations are defined as actions which are essential for an organisation to
perform to generate high income and revenues. Business operations are performed on day to day
basis so that all the functions of an organisation can be managed in a proper manner. These
operations are basically a repeatable element in a business that leads to productivity optimisation.
In respect with an organisation like ZARA, business operations changes according to the size,
type and industry in which a firm is operating. Business operations for an outlet are very distinct
from the operations which will be performed by an online retailer. Main elements associated
with operations of a business include staffing, location, process, technology and equipments. All
of these elements help ZARA in performing their activities properly so that high advantage over
rivals can be achieved in efficient manner (Bharara, Sabitha and Bansal, 2017).
Major functions associated with business operations
As we know that business operations are the procedures, activities and processes which
are carried out by workforce of a firm so that expected objectives can be attained on time. There
exist specific functions which are linked to the business operations. These functions helps a firm
in dividing their work in a systematic manner so that people having same expertise can deal with
it efficiently. Business functions are generally of two kinds i.e. support functions and core
functions. In case of ZARA, core business functions of firm benefits them in earning high
income. For example, manufacturing of final products to sell in market. Other than this, support
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business functions of ZARA are those processes which are performed by workforce to facilitate
core business functions (Choi and Li, 2015). Support business functions in ZARA can be
bifurcated into different aspects like marketing, after service, sales service, ICT services,
logistics, delivery,marketing, financial services etc. Without support functions, it is not possible
for ZARA to achieve their core business functions which is attainment of maximised profits in
an advantageous manner. Hence, to perform their business activities and operations in a desired
manner, manager in ZARA is needed to manage their business functions in a systematic manner.
Overview of case study and description about selected organisation
ZARA is a Spanish global retailer which operates in clothing section. This company is
performing their business operations in entire globe and earns an annual revenue of around 19
billion dollars worldwide. At present, ZARA is managing 10,000 outlets and offer accessories,
clothing, beauty products, perfumes and swimwear to their customers. This company is one of
the biggest retailer in apparel sector. Due to its supremacy in marketplace, ZARA targets
different class people which are not very price sensitive and prefer quality over quantity. This is
the reason, products of ZARA are preferred by people with good income only and customers that
are price sensitive are not targeted customers of the company. Company believes in performing
extensive production so that they can offer unique product to their customers before than their
rivals in genuine rates but this leads toward environmental depletion due to high use of non
renewable resources (Gardiner and Reefke, 2019).
In today's time, expectation and preference of customers changes at a fast pace. In this
context, business firms are needed to adopt new tactics and strategies so that they can retain their
clients for the maximum time frame. ZARA has also taken some initiative to sustain their
supremacy in marketplace. Company has decided to make their clothes by using sustainable
fabrics only. ZARA has planned to achieve this initiative by the year of 2025. Management in
ZARA has planned that all the collection and product line of ZARA will be prepared from
sustainable fabrics only so that negative impact on environment by business activities can be
reduced. This shows that commitment of firm towards a responsible future. In context with this,
firm has also decided that by 2025, almost 80% of their energy consumption will be from
renewable resources so that landfill waste can be minimised. To support their initiative, parent
company Inditex has installed cloth banks in around 800 stores. In this cloth bank, fabrics and
clothes which are already used by customers can be redistributed under charities. Also, to
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achieve 100% sustainability in their business operations, ZARA is working in collaboration with
MIT to identify the feasible manner in which fibre recycling can be carried out. Also,
organisation has decided to dispose their unused materials in a responsible manner and factories
of ZARA will not discharge any harmful chemicals during their supply chain. Owner of ZARA
has decided to achieve this mile stone by 2020 (Zara clothes to be made from 100% sustainable
fabrics by 2025, 2019).
In order to achieve their vision in a proper manner, it is important for the manager in
ZARA to change their business operations and functions according to the expectation of
company. Carrying out change of 100% sustainability in clothing fabric is going to impact the
entire functions of ZARA in a considerable manner. In this context, management of firm will
also be needed to carry-out some changes in their business operations and functions so that
achieving their objectives will became easier (Heizer, Render and Munson, 2017).
Evaluation of organisation's operations management decisions in context with different functions
Operation management is specified as the business practice administration which helps in
achieving maximum level of operational efficiency within a company. Operational management
is associated with the conversion of labour and materials into finalised offerings in optimised
manner so that highest profits can be encountered appropriately. ZARA also wishes to achieve
operational efficiency so that they can remain market leader in their specific field. In this
situation, company has adopted the resolution to transform their manufacturing processes into
sustainable procedures so that commitment of company towards responsible future can be
fulfilled appropriately (Hill and Hill, 2017). In this section of report, operation management
decisions of ZARA will be evaluated to acknowledge their efficiency in achieving future
objectives in a desired manner. Main functions of a firm are supply chain, location strategies,
human resource, quality control etc. Success of business depends upon these functions only. In
respect with ZARA, information on these functions are stated below:
Production: Giant retailer ZARA offers trendy and fashionable products according to the
taste of their customers. In this context, company is using just in time production. JIT production
methodology benefits in reducing the time required for production along with shortening
response time from the customers and suppliers. This helps ZARA to produce their goods and
offerings at the time of requirement only so that changed demand of customers can be fulfilled
without any compromise. Most of the production of ZARA is in-house due to which company is
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flexible in deciding the amount and variety of product they want to manufacture. This helps the
company in eliminating their extra waste and expenses so that sustainability in using raw
materials and resources can be used. Therefore, the decisions related with production function of
company is sustainable in nature (Lun, And et. al., 2016).
Supply chain: This function of ZARA is agile in nature which benefits the concerned
company in attaining profitable outcomes in considerable manner. Efficient supply chain of
firms helps in sustaining rapid growth at a fast pace. Management of company has decided to
adopt agile supply chain approach to enhance their operational efficiency. In order to adapt
sustainable supply chain, company uses unique approaches like procurement methodology,
supply proximity, production feedback, demand forecasting, local manufacturing etc. All of
these aspect benefits ZARA in managing their supply chain in limited budget so that concerned
firm can make maximum profits from their business operations.
Logistics: In context with ZARA, collection of company is refreshed two times in a
week. Stores of ZARA are capable in serving the requirements of customers whereas the
logistics which are maintained by ZARA helps in fulfilling the requirements of their outlets. In
Spain, firm has 10 logistics centre where all the work is performed in sustainable manner
(Raafat, 2016). In case of international market, management of company prefers systematically
upgrading by introduction of eco-efficicnet light, installation of climate control equipment,
electric vehicle, supplying bicycle, improved insulation etc. Also, firm uses renewable energy
sources for carrying out production. This shows that company supports sustainability in
performing their manufacturing activities.
Location strategies: As company follows the statement “ High fashion in genuine
price”, locational strategy of ZARA do not lacks expressive style. Main location strategy of
company is to keep themselves near to their competitors so that people can acknowledge the
difference in their offering and prefers ZARA for their standardised offerings. In this context,
management of firm has decided to project a high class fashion in all of their outlets and open up
their retail stores near their biggest competitors. This strategy is highly effective as this will help
the firm in keeping a check on the strategies of their rivals so that counter measures to overcome
potential threats can be devised properly (Wakeman, 2017).
Quality control: In case of ZARA, each product of firm is an impulse purchase as people
purchase offerings of companies not because they need them. But, to assure that they have
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sufficient collection of ZARA to show off their high standard. This shows that product
replacement of firm is high and their quality is very good in comparison with products of rival in
same price range (Scott-Jackson and Michie, 2017). In this context, company adopts total
quality management so that those elements which can reduce the quality of products can be
eliminated and only high quality material can be used. This decision of firm also supports
sustainability aspect of company.
Human resource: This function of company is responsible in recruiting, selecting and
hiring right kind of employees so that other functions of an organisation can be performed in a
systematic manner. In order to hire skilled employees, management in ZARA used Best Fit
approach in which all the applicants have to give written test and interview so that their
efficiency & knowledge can be identified. By this, only desired people will be hired for
performing work. This is the reason, employees of ZARA are very skilled in performing their
work in a productive manner. By this, company achieve high targets and profits in a proper
manner (Swink and et. al., 2017).
CONCLUSION
As per this given report, it has been identified that efficient business operations of a
company helps the business in achieving high profits and revenues. If operations of a company
are not robust, it is not possible for the business to acquire utmost efficiency and productivity.
Main functions of a business are their supply chain, logistics, quality control, production etc. All
of these functions assure that changing demands and expectation of people will be served in a
proper manner.
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REFERENCES
Books and Journals
Andersen, P. H. and De Boer, L., 2019. Sustainable operations management (SOM): An
introduction to and overview of the book. In Operations Management and
Sustainability (pp. 1-12). Palgrave Macmillan, Cham.
Bharara, S., Sabitha, A. S. and Bansal, A., 2017, January. A review on knowledge extraction for
business operations using data mining. In 2017 7th International Conference on Cloud
Computing, Data Science & Engineering-Confluence (pp. 512-518). IEEE.
Choi, T. M. and Li, Y., 2015. Sustainability in fashion business operations.
Gardiner, D. and Reefke, H., 2019. Operations Management for Business Excellence: Building
Sustainable Supply Chains. Routledge.
Heizer, J., Render, B. and Munson, C., 2017. Operations management. Sustainability and Supply
Chain Management. 12th Ed.. USA.
Hill, A. and Hill, T., 2017. Essential operations management. Macmillan International Higher
Education.
Lun, Y. V. And et. al., 2016. Examining the influence of organizational capability in innovative
business operations and the mediation of profitability on customer satisfaction: An
application in intermodal transport operators in Taiwan. International Journal of
Production Economics. 171. pp.179-188.
Raafat, F., 2016. BA 628 Introduction to Operations & Supply Chain Management.
Scott-Jackson, W. and Michie, J., 2017. Culture and Business Operations: How the Gulf Arab
Leadership Style Impacts a Contingent Human Resource Management. In Business and
Society in the Middle East (pp. 31-47). Palgrave Macmillan, Cham.
Swink, M. and et. al., 2017. Managing operations across the supply chain. New York, NY:
McGraw-Hill Education.
Wakeman, T., 2017. Introduction: Transportation Systems Resilience: Lessons Learned in
Planning, Engineering, and Operations and Management. TR News. (311).
Online
Zara clothes to be made from 100% sustainable fabrics by 2025. 2019. [Online]. Available
through:<https://www.theguardian.com/fashion/2019/jul/17/zara-collections-to-be-
made-from-100-sustainable-fabrics>
Zara's Business Operations and Strategy: How and Why They Work. 2018. Available
through:<https://toughnickel.com/industries/Business-Operations-of-Clothing-Retailer-
Zara>
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