Zara Group - Country Market Report Positioning Zara in the...

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Country Market Report Positioning Zara in the Brazilian market Kamiren Passavanti Spencer Charles Juan Torres Kennesaw State University December, 2011 Table of Contents
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Country Market Report Group 3 Description of products currently sold overseas by Zara stores Zara is one of the largest international fashion companies in the world that belongs to Inditex (Industria de Diseño Textil). It is one of the world’s largest and innovative distribution groups. Inditex is a global specialty retailer that designs, manufactures, and sells apparel, footwear, and accessories for women, men, and children through Zara and five other chains around the world (Dutta, 18). Zara is an extremely fashionable and affordable label, appealing to many countries and cultures worldwide. Its greater competitive advantage is its low prices due to a very short lead-time on distribution and manufacture, which makes Zara’s lines enormously cheaper than its closer fashion-style competitors. “Products are shipped directly from the central distribution center to well-located stores twice a week. This eliminates the need for warehouses and keeps inventories low. Vertical integration helps reduce the “bullwhip effect, (Ghemawat, and Nueno, 16)” which is the tendency for fluctuations in final demand to get amplified as they were transmitted back up the supply chain. “More importantly, Zara was able to originate a design, and have finished goods in stores within four to five weeks in the case of entirely new designs and two weeks for modifications (or restocking) of existing products.” (Ghemawat, and Nueno, 31) The tables below are the comparison between Zara’s prices and its competitors based on their U.S. webpages (Zara.com) Brand Article Price Difference Zara Men Plain T-shirt 9.90 $ Lacoste Men Plain T-shirt 35.00 $ (25.10) $ Polo Ralph Lauren Men Plain T-shirt 25.00 $ (15.10) $ Armani Men Plain T-shirt 150.00 $ (140.10) $ Guess Men Plain T-shirt 29.00 $ (19.10) $ Hugo Boss Men Plain T-shirt 39.00 $ (29.10) $
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Country Market Report Group 3 Due to the production in small batches and vertical integration into the manufacture of the most time-sensitive items, Zara is capable of producing about 11,000 distinct items during a year creating several hundred thousand SKUs in variations of color, fabric, and sizes—compared with the 2,000 to 4,000 items for key competitors such as H&M and Benetton (Morel, Maxime, Luis Lopez Gallego, Aloïs Phommasene, and Ayse Karavilan, 3). Zara’s operations allow the stores to carry more SKUs variation, as well as more lines for men and women in every country they have presence in. Internationally, Zara is known for having consistency on the designs of their products, so that customers are able to find similar or the same products on each Zara store regardless of its location. As part of its operations, Inditex stated that every Zara store in the world must carry the following items for consistency, with the allowance of making variations
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Zara Group - Country Market Report Positioning Zara in the...

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