Success Factor for Zara

What ar the Key success factors of Zara? The ability to respond to customer requirements on a timely basis has forever and a day been a fundamental element of the commercialiseing concept. Martin Christopher et. al. Hence, it is important being proactive in a market such as the fast-fashion industry which Zara is operating in, time is always a crucial factor. The fast-fashion market, amongst other things, is characterized by short lifecycles, towering volatility, low predictability, and high-impulse purchases. Therefore, it is very important for Zara to constantly have their crossroads available for a latent customer in order to sell and earn more(prenominal) profit.Since the fast-fashion market is to a fault constantly faulting and trends locoweed be replaced over a night, there is a low predictability. This makes it a lot more difficult to compose accurate forecasts. In order to stay competitive in the market, it is important to bespeak be aw atomic number 18 of these ty pes of factors mentioned above, and make sure you are not left behind. One of Zara? s classifiable key success factors is their valuable and planned integrated logistics and fork out chain management. This allows them to further develop and have a competitive marketing mix.In a marketplace where customers expect to find the latest physiques that are pacify in fashion, Zara is an outstanding example of how to make that possible. It usually takes at least six months in the material industry for an idea to be transformed into a crossroad and reach the install shelves. By cut the lead-time by means of efficient channel management, Zara has developed a vertical integrated business model, which allows them to change nearly parts of their inventory in only a couple of weeks. This strategy is nowadays known as the Quick Response (QR).The definition of QR passel be described as A state of responsiveness and flexibility in which an organization seeks to provide a highly diverse ran ge of products and services to a customer/consumer in the exact quantity, variety, quality, time, place and price, as dictated by real-time customer/consumer demand. Neil Towers et. al The QR strategy allows Zara to create products that are inspired by the latest fashion trends from around the world through diverse media sources displayed to a broad public, leading fashion scenes, movies, bloggers, etc.By having products for a reasonable price with relatively high quality, Zara is one of the leading fast-fashion companies in the world. But, how does their company function to have this much success? One of the primary(prenominal) reasons why Zara is so competitive is because they have suppliers that are strategically designed to fulfill their abstract idea. Their conceptual idea is to supply trendy clothes, to a broad market, for a reasonable price. Almost 30 per centum of the companys suppliers are situated in either Spain or parts of Europe.The local front end of the manufactur ing facilities within a short distance to many of their stores and headquarters, has allowed the company to be very flexible in a changing market. With high integration to the company? s suppliers, the products that are highly sensitive to accessibility and proactive response are mainly get downd in Europe. They minimize costs and lead-time because of the local presence, which makes it possible to embark new and fresh merchandise multiple times a year.Since, major parts of the production are situated locally, the products can reach the stores at the right time, meet the actual demand, and reach a higher(prenominal) sell-through. The other part of their product line that is not susceptible for seasonal change is outsourced to low-cost-labor countries in Asia. The combine of suppliers works as a competitive advantage. It promotes high-impulse purchasing from their new lines while still profiting for their basic product lines. Another key success factor is their pricing strategy.Th e company uses a market-based pricing strategy, which means that they design products at a fixed price according to what the costumers are willing to pay. All the costs to produce and deliver the product combined with the planned gross margin for profit are then careful in accordance to the final retail price. Besides the pricing strategy, Zara also uses a market-oriented approach, which refers to being cognisant and predicting costumers hidden needs. As studies has revealed, the company only spends one percent of their annual turnover on advertising.They position most of their resources into using modern technologies, such as point-of-sales data collected from their stores as an effective intercourse tool. By regularly collecting POS-data, and translating the information into real demand and different consumption patterns, the company can deliver the exact quantity of merchandise, at the right time, to their stores. This activity minimizes the costs and results in higher profit , which can be used for other business activities such as expansion, product development and so on.Not to mention, it also makes it possible for the company to evaluate and predict which products that will have a shorter or longer product life cycle. Hence, will result in higher sell-through, quick elimination of products that are out of fashion, and replacement of new merchandise. Another reason to why their internationalization has been so successful is the fact that their merchandize can be sold in many different parts of the world. Even regardless of cultural differences. One of the reasons is that their consumers love garments from the high-end market and Zara copies those garments at lower prices for their consumers.In some cultures the company is using adaptation tools. For example, each store manager is allowed to make slight modifications to the assortment to achieve a better match between supply and demand in certain countries. In addition, the location of the stores is a nother successful factor. Zara has chosen to position their stores in attractive and high-trafficked locations. Also, Zaras stores are designed by professional store decorators in accordance to Zaras business image. The interior of the Zara in Central for instance is very similar to other high-end fashion stores, which gives customers the analogous feeling as shopping in a luxury store.References Used the two articles posted by Dawn on FB Lectures Tutorials And Retrieved on 2012-03-11http//www. google. com. hk/books? hl=sv&lr=&id=-9Ja0ZQ6gSMC&oi=fnd&pg=PA62&dq=market+orientation+and+supply+chain+management+in+the+fashion+industry&ots=0FiX4Yvyf5&sig=BoBe-KOlSiOaY6igTvN7NvyPVYM&redir_esc=yv=onepage&q=market%20orientation%20and%20supply%20chain%20management%20in%20the%20fashion%20industry&f=false Retrieved on 2012-03-11 http//martin-christopher. info/wp-content/uploads/2009/12/CREATING-AGILE-SUPPLY-CHAINS-IN-THE-FASHION-INDUSTRY. pdf