Zara: A Case Study on Effective Management in the Workplace

This article examines the case of the Spanish retailer Zara that plays a prominent role in the fashion industry. There are huge demands of clothing stores in the fashion industries that provide a major growth to Zara. The company provides various ranges of products to their consumers that increase their existence in the market. The company has strong marketing strategies that help them in competing for their competitors such as H&M, Gap. They effectively control over their cost through which they would able to deliver quality products at a cheaper price. The company has also an effective supply chain that made them stronger in the market and able to deliver the latest collection in a limited period of time. However, the company has faced some ethical challenges in their organization that increase dissatisfaction among employees and stakeholders. They need to focus on such issue and must take certain steps ethically to protect the rights of employees. it would help the company to achieve greater growth in the sustainable market.

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Executive Summary
This article examines the case of the Spanish retailer Zara that plays a prominent role in the
fashion industry. There are huge demands of clothing stores in the fashion industries that
provide a major growth to Zara. The company provides various ranges of products to their
consumers that increase their existence in the market. The company has strong marketing
strategies that help them in competing for their competitors such as H&M, Gap. They
effectively control over their cost through which they would able to deliver quality products
at a cheaper price. The company has also an effective supply chain that made them stronger
in the market and able to deliver the latest collection in a limited period of time. However, the
company has faced some ethical challenges in their organization that increase dissatisfaction
among employees and stakeholders. They need to focus on such issue and must take certain
steps ethically to protect the rights of employees. it would help the company to achieve
greater growth in the sustainable market.

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Table of Contents
Executive Summary...................................................................................................................1
1. Introduction of Industry.........................................................................................................3
2. Background of the company..................................................................................................3
2.1. Tactical Decision making................................................................................................3
2.2. Efficient Supply Chain....................................................................................................4
2.3. Business Ethics................................................................................................................5
4. Conclusion & Recommendations.......................................................................................5
References..................................................................................................................................7

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1. Introduction of Industry
The style and fashion are not simply prose but an essential element of nowadays life. It has
boundless prospect for inspiration in a human being. The fashion industry has a complex
network in the present scenario. It has enclosed a wider gamut and still has a huge span for
the trialling to articulate that advice of inspiration with a motive of delivering the right
product at a right place with right time and quality (Bhardwaj and Fairhurst, 2010). The
emergence of global fashion has changed the manner of fashion that is perceived in the
contemporary world. In recent years, there has been a surge of global fashion brands,
triggered by the intensive involvement of the internationalization processes in the industry of
fashion (Rabine, 2017). Most of the companies are concentrating on their management of the
business to achieve sustainable growth in the market. One of the leading companies Zara has
also played a prominent role in their sustainable growth (Macchion et al., 2015)
In the following part, there will be a detailed discussion on Zara in which there will be
discussion cover about their effective management in the workplace and where they lag in
managing their issues.
2. Background of the company
Zara is one of the foremost chain of the Spanish fashion colossal, Inditex that are presented in
approximately 72 countries with a network of 1314 stores in the key sites of the chief cities. It
was founded in the year 1975 as Spanish clothing as well as accessories retailers that were
originally the chain of Inditex Group that owned by Amancio Ortega. Beginning with the
single store in Spain, the company has launched into Australia (Anwar, 2017). It has alone
accounted for 64.6% of the Inditex Group turnover in the year 2010. Over the time the
company has become one of the notable leaders among the brands of fashion. Zara is a
distributor of apparels. The company offers a wide range of choices for men, women, as well
as children. Moreover, Zara entered in the line of perfumes, cosmetics, as well as households
(Clegg, 2015).
2.1. Tactical Decision making
Zara has taken their decision in such a way that represents the unique approach to adverting
and marketing the company. The brand has additional factors within their business model that

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added a lot to their success. They spend 0.3 percent of their total revenues on marketing as
well as advertising. The percentage level is very low in a comparison to their competitors in
their market as on average companies such as Gap as well as H&M. these companies spent
about three to four percent of their total revenue for similar expenses. It represents that Zara
is successfully maintaining the cost advantage to their competitors in the activities of
marketing. The company uses different essential locations, layouts of stores as well as the life
cycle of their products as an effective marketing tool in order to complete with their peers
successfully. The company has already opened their stores in the prime as well as porch
market to earn the maximum visibilities. The products of the company are available for very
small periods of time that provokes the consumers to visit time as well as again and force
them to make a rapid decision about their purchasing as they might not get that similar
product again when they visit the store even the next day (Filieri, 2015).
(Source: The Economist, 2016)
2.2. Efficient Supply Chain
The value chain of Zara is vertically integrated that offers huge advantages to the company.
The supply chain of the brand is efficient, they have centralized logistics as well as
Distribution channels through which they have maintained a deviation as well as have
optimized their supply chain in a more effective manner at many different levels. there is a
specific time for the trucks to leave as well as for the process of shipments to arrive at stores,

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the garment of the company are pre-hung that are already labeled with their price tags even
those are set by air (Azevedo and Sanchez, 2015). Therefore, such clearly defined rhythm not
only works the supply chain smoothly but also the consumers would able to know the time
and day to visit the stores to get the fresh arrivals. They have used their supply chain
management to generate instant fashions that would be cheap, trendy clothing with using high
wage paradigm. The efficient supply chain of the company forces them to compete in the
competitive market (Ivanov, Tsipoulanidis and Schonberger, 2019).
(Source: VanGuards, 2018)
2.3. Business Ethics
Business ethics based on the social and moral values that need to adopt by the businesses to
grow sustainably. Therefore, Zara is majorly criticized for their unethical behavior. The
company has been accused of showing unethical behavior towards their employees. In major
cases, Zara has dealt with the underlying employees with loads of indictments against the
fulfillment of the obligations towards the employees by the company. In Argentina, the
company has been alleged of keeping the workers in dreadful situations. Zara has taken the
official documents of their employees and resist releasing such documents. The employees
were not allowed to move anywhere freely without the permission of the company. In such

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condition, the company has failed to meet their promises that they have made with their
employees. The employees were forced to work more than 13 hours a day. Other cases were
also found by the researchers in which the company has adopted unethical ways to target
their consumers. The employees of the company are not satisfied due to their exploitation
(Berberyan and JASTRAM, 2018)
4. Conclusion & Recommendations
From the above analysis, it can be concluded that Zara as a leading company plays a
prominent role in their success in the fashion industry. They are well-known for their brands
due to their effective quality of products they deliver to their consumers in the market. The
company has strong marketing as well as advertisement strategies that made them unique
from their competitors in the market. They spend few amounts in the marketing and
advertisement process but still, they pioneer on their competitors that represent the cost-
effectiveness of the company. The company has also a strong supply chain that made them
stronger in their market and able to achieve sustainable growth in the fashion industry.
However, Zara has not adopted ethical manner for their growth that causes dissatisfaction
among the employees and consumers.
Therefore it is highly recommended that:
 The company should take into consideration the human right for the works to protect
them from the exploitation that has already done by the company. It is the
responsibility of the company to take care of their employees and t give them the
resources for which they have committed to their employees.
 They need to understand the sentiments of the employees that made them feel
motivated which would help the company in creating a healthy organizational culture
in their workplace.
 Zara should fix the working hours for the employees that would help the employees in
protecting their rights.

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References
Anwar, S.T. (2017) Zara vs. Uniqlo: Leadership strategies in the competitive textile and
apparel industry. Global Business and Organizational Excellence, 36(5), pp.26-35.
Azevedo, T. and Sanchez, R. (2015) THE PRODUCTION METHOD ADOPTED BY ZARA
AND ITS IMPACTS ON CONSUMER DECISION MAKING. European Journal of
Business and Social Sciences, 4(09), pp.93-102.
Berberyan, Z. and JASTRAM, S.M. (2018) Drivers and obstacles of ethical fashion
consumption. In Eco-Friendly and Fair 67(82), pp. 54-66
Bhardwaj, V. and Fairhurst, A. (2010) Fast fashion: response to changes in the fashion
industry. The International Review of Retail, Distribution and Consumer Research, 20(1),
pp.165-173
Clegg, B. (2015) Fashioning a Model for Zara. Impact, 1(2), pp.7-12.
Filieri, R. (2015) From market-driving to market-driven: an analysis of Benetton’s strategy
change and its implications for long-term performance. Marketing Intelligence &
Planning, 33(3), pp.238-257.
Ivanov, D., Tsipoulanidis, A. and Schonberger, J. (2019) Operations and Supply Chain
Strategy. In Global Supply Chain and Operations Management 42(55), pp. 81-110
Macchion, L., Moretto, A., Caniato, F., Caridi, M., Danese, P. and Vinelli, A. (2015)
Production and supply network strategies within the fashion industry. International Journal
of Production Economics, 163, pp.173-188.
Rabine, L.W. (2017) Globalization and the Fashion Industry. 11(21) 1.
The Economist. (2016) The management style of Amancio Ortega [Online]. Available from:
https://www.economist.com/business/2016/12/17/the-management-style-of-amancio-ortega /
[Accessed on 19/01/19]
VanGuards. (2018) Supply Chain Management of Zara [Online]. Available from:
http://www.vanguardsw.com/2017/06/demand-data-key-supply-chain-management/
[Accessed on 19/01/19]

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