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Summarise the strategic options that are appropriate to ZARA and make definitive for ZARA to sustain its future position in the - Essay Example
Pages 4 (1004 words)
COMPANY ANALYSIS (Author’s name) (Institutional Affiliation) Identify the business level strategy of Zara: Zara is noted to be one of the world’s fastest growing manufacturers of affordable fashion clothing this can be attributed to Cost leadership business level strategy…
This difficulty of the imitation is one of the foundations the leadership strategy relies on. Zara has managed to successfully exploit its economic of scale through its size and volume of production. Passemard observes that there is a relationship between firm-size measured in terms of volume of production. Based on this understanding, and considering that Zara sells medium quality fashion clothing at affordable prices, its unit production is minimum. The optimum volume of production is reached when the average cost per unit production is minimal. (Passemard, 2006). Zara has also managed to sustain the leadership strategy because of its volume of production. Passemard, points out that with a high level of production, a company is able to purchase and use specialized manufacturing tools which other small companies are not able to afford (Passemard, 2006). The study indicates that the merchandize in the rain facility has a capacity of only 45,000 folded garments per hour and that this facility has its limitation unless more capacity can be created elsewhere. A further study by Adams observes that cost advantage may be associated with division of labor, which apparently is one of the key ingredients of Zara efficiency of work. ...
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