Internal Analysis Of Zara Business Model

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Internal Analysis Of Zara Business Model
Zara is one of the largest clothing fashion manufacturing companies in the world. The business evolves fast-moving fashion specializing in clothes, jewelry shoes, beauty, and swimwear (Rothaermel, 118). This essay will look at the internal business model of Zara.
The company uses a business model that ensures its success over the years. The firm has key competencies embedded within it to maintain advantages over its rivals (Rothaermel, 118). In the case of Zara, these were activities in design, sourcing, manufacturing, retailing, and distribution. The primary activities in the business that ensured the application of its key competence are as below.
Design
The company created a design team whose main role was to source, design and develop the latest fashion trends. The team focused on identifying fashion trends across the world and create a line for each upcoming season (Hemawat & Iniesta, 82). Using a combination of information technology to predict designs, daily sales, and customer feedback ensures that all their products are the most current and fast-moving.
Manufacturing
Zara uses a just-in-time manufacturing system. They also had subcontracted manufacturers across Europe, North Africa, and Asia (Hemawat & Iniesta, 83). With a large percentage of their garments manufactured locally. The riskiest products, which sell the most, are manufactured closest to their offices, allowing a quicker response to demand changes.
Distribution
The distribution is centralized, where all their items go through their main warehouse before being dispatched to their stores (Hemawat & Iniesta, 83). The shipment of -products is based on demand and stock levels. Order requests are received on handheld devices. Allocation decisions were often made on historical sales records of the item.
Retailing
The company offers the latest in trends in fashion designs that ensure repeat customers. Zara's merchandise the latest fashion and was at a slightly lower price from the competition (Hemawat & Iniesta, 85). The company also efficiently manages the design, production, manufacturing, distribution, sales, and promotion of its products. The company does not spend much on advertising but rather on word of mouth and creating a sense of scarcity in their products. Their target clients are the fashi...