Zara

ZARA

1. Founder – Amancio Ortegs – Spain’s richest man (Inditex Company)

2. Buyer driven global chain

3. Total Apparel Solution – Belt, trousers, shoes together sold

4. Tracking customer preference

5. Warehouse – Only for receiving goods & not storage. Dispatch the goods asap. Good inventory management (Doc for inward & outward)

6. Working capital – Negative – Pay supplier later

7. Grow into nearby market (to avoid high cost of logistics)

8. Merchandizing strategy (wide and shallow) – Many SKU’s and little stock. Create scarcity to make customer visit often (limited stock of a single variety)

9. Create an experience – Zara is a customer driven organization

10. Serve & Respond - Zara looks at youngsters, trend spotters to see the current trend

11. Store Manager – is responsible for what is selling & how often. Customer preference recorded and sent to design department

12. Use Grey fabric – Design it, dye it and easily sell it

13. Capacity is not fully utilized – High capacity utilization leads to high inventory. The clothe might go out of fashion

14. Fast fashion forward – Keep moving forward in new fashion

15. Zara never advertise (Brand image will come down, if prices fell down drastically).

16. Marketing - Flagship store at most visible & premier location (Like Apple, Nike). Build brand via flagship store. Flagship stores are not viable in short run (What kind of people, what is being asked, what is moving & what is not)

17. AIDA – Awareness, Interest, Desire, Adoption

18. AIETA – Awareness, Interest, Evaluation, Trial, Adoption

19. Zara is 90% global & 10% local

20. Design – Sourcing and manufacturing – Distribution – Retaining

a. Design – Information – What we do not have and what is wanted in market. Discussion between design and commercial to question – “will it sell / where it sell”.

b. Sourcing and manufacturing – 60-65% in Spain – Precut design on bulk fabrics to minimize cost (Importing fabric from Italy, France, Spain). Workshops owned by independent subcontractors

21. Different price elasticity (Differential pricing) – purchasing power of the segment. Depends on cost of currency, transportation and shipping cost.

22. Expansion strategy – JV (Legal obligation), better understanding of market, make use of pertner’s design

23. Franchise – Believes in brand – Most popular way of growing the brand. Training the staff is important

24. Window dressing – Big frontage (Max impact), word of mouth communication. Can see through windows for inner stock.

25. Priced in multiple currency – Only for developed countries.

26. Cannibalization - Same brands of same company competing.