Zara spanish clothing company - Essay Example

Zara Spanish clothing company How Zara’s supply chain is different to other clothing retailers’ supply chains. Do these other clothing retailers havedifferent competitive priorities? One of the key problems of supply chain management in the apparel industry is the long time required for the development of new products and their introduction in the market. In fact, it may takes up to 2 years for clothes of new range to enter the market (Ray 2010). Zara has minimized this time, being able to introduce ‘new ranges in the market in just few weeks’ (Ray 2010, p.324). Under certain terms, the firm is able to respond quicker to the market demands; for instance, in the study of Gourdin (2006) it is noted that in Zara the time required for the introduction of new ranges in the market can be limited to just 15 days.

The above operational characteristic of Zara is considered as one of its major competitive advantages towards its rivals. The firm has also managed to fully avoid outsourcing, a target that has not been achieved by other retailers. In this context, British retailers, like H&M and Benetton, and USA retailers, like Walmart and J.C. Penny, prefer outsourcing all parts of their supply chain, apart from the quality control phase (Ray 2010, p.324). On the other hand, the above retailers seem to have different competitive priorities from Zara.

Indeed, these firms focus more on the development of high quantities of clothes, aiming to avoid sending new ranges to their stores on a daily basis, a common practice in Zara (Gourdin 2006). Rather, they set specific time points for sending new ranges to their stores; these ranges will be appropriately aligned with the market demands, in terms of quantity and quality. There are retailers that have tried to minimize the time spent between the production line and the store, like Mango, a Spanish retailer, (Leeman 2010); however, still, the time of response to the customers’ needs is more than in Zara.

Keeping the standards of their brand name, meaning the characteristics of their products as of their design and quality, is the key competitive priority for retailers in the particular industry. For Zara, responding to the preferences of customers on a continuous basis is the key strategic priority, as reflected in the firm’s supply chain strategy. What changes Zara may need to make to their supply chain in the next ten years and how these changes are linked to competitiveness. Currently, Zara is able to launch a new collection quite rapidly; in fact, the average time required for the firm’s new ranges to reach its stores is about 15 days (Rushton and Walker 2007).

Moreover, the firm keeps certain of its facilities spare, meaning its trucks and warehouses, so that it is able to respond to emergent market needs without having to wait for completing a pending order (Mangan, Lalwani and Butcher 2008). These practices have helped the firm to keep its competitiveness in the market but it should be reviewed in the long term. More specifically, the firm’s supply chain management is based on a specific rule: that the market demand will be kept at high levels.

In 2011, the firm’s profits have been increased by 25%, showing the effectiveness of current strategic priorities (Kotler and Armstrong 2010). However, it is clear that such perspective is not standardized, i.e. in the long term the profitability of the firm cannot be guaranteed. More specifically, in ten years time it is quite possible that current market trends will be highly alternated under the influence of global financial pressures and the change in consumers’ priorities. The firm should reduce its supply chain costs, i.e. to avoid keeping its facilities and warehouse spare and use outsourcing, keeping a balance between demand and production (Dunne, Lusch and Carver 2010).

Emphasis should be paid not on minimizing the time required for the products to reach the store but on reducing the supply chain costs and risks. The development of a network of trustworthy allies would help the firm to establish a competitive supply chain management system, without having to bear all relevant risks in case that the profits in the particular industry start to decline. ReferencesDunne, P., Lusch, R. and J. Carver. 2010. Retailing. USA: Cengage Learning. Gourdin, K. 2006. Global logistics management: a competitive advantage for the 21st century.

UK: Wiley-Blackwell.Kotler, P. and G. Armstrong. 2010. Principles of marketing. UK: Pearson Education.Leeman, J. 2010. Supply Chain Management. Germany: Institute for Business Process Management. Mangan, J., Lalwani, C. and T. Butcher. 2008. Global logistics and supply chain management. USA: John Wiley and Sons.Ray, R. 2010. Supply Chain Management For Retailing. Tata McGraw-Hill Education.Rushton, A. and S. Walker. 2007. International logistics and supply chain outsourcing: from local to global.

UK: Kogan Page Publishers.