Zara Case Study: Exploring Business Model, Supply Chain, and UK Market

This case study analyzes Zara, a leading fast-fashion retailer, focusing on its business model, supply chain efficiencies, and stakeholder engagement within the UK market. Zara's success is attributed to its rapid design and production cycles, efficient supply chain management, and a customer-centric approach. The study highlights Zara's ability to quickly adapt to changing fashion trends, maintain a cost advantage through its supply chain network, and engage effectively with stakeholders, including staff, clients, suppliers, and the community. By examining Zara's strategies in the UK fashion industry, the case study provides insights into the dynamics of the fast-growing fashion market and the importance of supply chain optimization and stakeholder relationships in achieving competitive advantage. Desklib offers a range of solved assignments and past papers for students seeking to enhance their understanding of business and marketing concepts.

ZARA – Fashion
Clothing Manufacturer
Case Study

Reasons to choose product:
Fashion is exciting field, have good knowledge of
fashion clothing,
Growing market with consumer spending increasing
every year at 12.5% rate opening up opportunities for
new players to flourish
Product: High Street Fashion
Clothing
FASHION INDUSTRY
1.7% contribution to GDP in
UK from fashion industry -
£26billion
Include small retailers, large
high street retailers, exclusive
stores, and fair price or charity
shops.
Retailers use multiple
channels to reach consumers
including branded stores,
ecommerce platforms, malls,
mobile shopping, etc.
555,000 employed in fashion
retail in the UK with 75% of
employed in retail sales
Consumer Expenditure on retail

Reasons to choose brand:
Always been wearing Zara fashion clothing, company
has strong supply chain & has reputation of fast
designing and production.
Company: Zara Fashion
Clothing
INTRODUCTION TO ZARA
Spanish clothing retailer operating with 2169 stores
World’s largest retailer for apparels that brings 20 clothing
collections every year
One of the most popular fashion brands which is best known
for speed to market
Uses centralized Design system with 200 designers involved
for fast production - 12,000 new designs launched every year
Highly responsive supply chain ships new products twice every
week to stores
More than 450 million items produced every year
Current profit of Zara as on 30th April 2017 was 654m Euros

Zara is a Spain based manufacturer for lifestyle clothing for men,
women and kids.
First Zara store opened in 1975 by Amancio Ortega which is a
flagship brand of Inditex group.
Other than Zara, the company owns brands like Massimo
Dutti, Pull&Bear, Bershka, Oysho, and Stradivarius.
In 2016, the company made a revenue of US$15.9 billion
In September 2010, an online boutique was launched to cater to
multiple markets including France, Germany, Italy , Portugal , Spain,
and the UK
Company outsources production of basic clothing to low cost
suppliers and manufacturers fashionable items in-house
Flagship stores of Zara are located in New York, London, Madrid,
ABOUT ZARA

UK Fashion
Industry
Core fashion
products in the
fashion industry
such as
sportswear,
street wear, work
wear, denim, and
couture etc., are
included within
main categories
like men's wear
and women's

Business Environment
in High Street fashion
Clothing
Fashion clothing is a fast
growing market that
needs speed to market.
The business environment
is influenced by supply
chain efficiencies, service
domination, and latest
fashion trends. Zara is
famous for less lead times
and fast designing and
production of fashion
clothing.
UK
Fashion
Industry
Environme
nt

young and stylish men, women
and kids
Segmented by demographics and
lifestyle
Average customer visits Zara store
17 times in a year
85% of Zara items are sold at full
price Segmentation:
Main Segmentation –
Women, Men and Kids
Demographics – Age,
Cities, Education and
income based
Psychographic – Trendy,
Looks conscious, enjoy
clothing, hectic life style
people, socialisers
Benefits based
segmentation – Based on
body shapes

ZARA is a moderately priced Lifestyle Fashion Brand that
delivers best and fast
Brand Value of Zara is shaped by
 Moderate price range of products making it more affordable to masses
Company has cost advantage over other brands due to efficient supply
chain network
With fast production, more designs, and lower quantities display at one
Advantages with Zara

Zara Clothing Company Supply Chain
11,000 distinct items per
year
Design changes every
two weeks
Biweekly replenishment in
stores
More accurate forecasts than
competition
12 inventory turns per year
60% manufacturing in
advance
Smaller bets put in fast
trends
Supplies delivered in bulk to
Zara’s automated DC – The
Cube which has a size of 5
million square fee 50% items
produced in
Spain
20% items
produced in
other parts of
Europe
24%
produced in
Asia and
Africa

Stakeholder
Engagement
Stakehol
der
Group
Communication Tools Frequency Goals Commitment
Staff Committee meetings,
training, staff promotion,
agreements, volunteering
programs , and internal
communications
Committee
on request,
rest constant
Motivate
Practice
Strengthen
commitment
Respect human
rights
Commitment to code
of conduct
Clients Customer service,
ecommerce, social
networking, health and
safety teams
Constant Fast response
to consumer
demands and
personalized
service
Integrated business
model
Suppliers Clusters, Agreements,
ethics committee,
sustainability teams
Committee
on request,
rest constant
Compliance
with codes of
conduct
Human rights
protection and
international
standards
Communi
ty
Social advisory board,
cooperation with NGO,
and sponsorship
committee
Committee
on biannual
basis, rest
constant
Remain
sustainable
and have
corporate
transparency
Serve shared
interests of
stakeholders
Environ
ment
Social advisory board and
cooperation with NGO
Committee
on biannual
basis, NGO
Strategic
environmental
planning
Respect
environment,
protect

Conclusions
Fashion industry is fast growing in UK and Zara is
the largest fashion brand in the region
The brand is famous for fast time to market which is
made possible with its efficient supply chain
decisions
It performs better than competition in
replenishment, speed of production, customer visits
to stores, and design changes
All supplies are delivered to DC of Zara which is the
central location to manage all products
Zara has a sound stakeholder engagement model

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from RIC Center.
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seasonality, product lifecycle and cannibalization. Massachusetts Institute
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LU, C. (2014, December 4). Zara supply chain analysis - the secret behind
Zara's retail success. Retrieved from TradeGecko:
https://www.tradegecko.com/blog/zara-supply-chain-its-secret-to-retail-
success