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Fashion Retailer - Assignment Example
Pages 12 (3012 words)
Global fashion retailers are currently operating in a very competitive environment that is highly characterised by constant changes in customer preferences; however Zara is one retailer that has buckled this trend. This success is reflected in Zara's financial position, which has seen an oversubscription in the price of its shares, and a sustained sales growth of more than 10% per annum for the past ten years…
This supply chain innovation was essential as the industry was prone to risks in mismatches of supply and demand, and this would result in disruption, longer waiting times and smaller margins of error (Kleindorfer 2004). To negate these effects Zara produces 50% of its products in-house, instead of outsourcing all manufacturing and production related processes. This has largely been made possible by Zara's background, as Zara started life as a manufacturer. When Zara, as a manufacturer decided to compete in the retail sector, they became a retailer with manufacturing capacity (AI 2004). Instead of getting rid of this capacity, Zara identified this as an opportunity. This capacity also means that Zara is in possession of 18 manufacturing plants that are responsible for producing their fashion garments (AI 2004). Whilst other retailers are outsourcing to Asia and the Far East, Zara has integrated their manufacturing and retail aspects to minimise the uncertainties associated with long lead times, and predicting fashion trends months in advance. ...
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