I’ve found this video analyzing Zara’s strategy and its biggest advantages in front other companies are its flexibility, speed and fair exchange value. All these characteristics are related with the efficiency of their distribution chain.
- Flexibility. Zara has more than 2.000 stores around the world and its shops are located in areas of high human traffic. They adapt their items according to client’s needs, fashion trends and store sells. Zara is also very reactive and if one of their designs does not have exit, they retire it. They do thousand designs per month and update their collections. This fast turn over makes possible to provide new designs in stores by making shipments every two weeks which in turn attract customers to came over and over again.
- Speed. Their demand based production pushes customers to buy fast and allows Zara to:
- Have a cost effective low storage cost. They don’t keep much stock of clothes as they are constantly changing their collections.
- Be faster thanks to its efficient integrated supply chain.
- Copy new fashionable styles with a low price
- Fair value. Customers see the price of clothes fair because they can copy the new fashionable and trendy styles very fast but maintaining affordable costs.