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Zara's Business Model

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Founded in 1975, the La Coruna-based clothing retail Zara has grown gradually to become one of the world’s most respected brands. As Inditex’s largest brand, it has expanded its territory over the years to around 45 countries across the Americas, Europe, Africa, and Asia by the year 2003. It owes its progress to a consistency in quality, innovation, and delivery in the fashion market. As rivals struggle to stay in the market and remain competitive, Zara seems to sail through the challenges seamlessly. Zara’s secret lies in the way it embraces a new perspective that suits the fashion market better than the traditional one. The new model focuses on retaining customers through fast and current designs rather than creating designs in advance. The company boasts of a unique and exemplary business model that incorporates three major operations goals that guide its business. This paper explores the uniqueness of Zara’s business model as presented through its concept, capability, and value drivers. Zara is a successful fashion business that targets a young and fashion-sensitive market segment. The fashion industry is a highly dynamic field characterized by constant changes in style and presentation, especially among the younger target market. Its major cloth line categories include women at over 60% and men and fast-growing children sharing the rest of the percentage. Young individuals are highly price-sensitive and Zara meets this need through reduced prices for their fashionable products. Fashion companies must be flexible in order to remain competitive in such a market. Zara has penetrated, and remained at the top of the industry through the years by adopting an exceptional business model. The model is composed of three major parts, that is, capabilities, concept, and value drivers. The underlying goal of each of these concepts is to attain high flexibility and satisfy the customers’ demands faster. The effective implementation of the three goals of Zara’s unique business model offers the organization a strategic competitive advantage over its rivals. It is responsible for the brand recognition and extensive customer base Zara enjoys in its global market. Its success is also a product of the unique perspective the company uses in its production processes. The company’s central management allows branch managers to exercise autonomy in their respective areas of expertise and this enhances ownership and productivity. The branch manager’s feedback informs the headquarters of the market trends in various areas and this enables them to stay in touch with their various customers’ needs in design and quality. Moreover, the company has numerous standby designers and specialized commercials to implement the needs as communicated from the market. Production is also done in smaller portions to reduce unnecessary bulk that will outlive the trend. Other business models invest in creating several designs in advance and this is counterproductive, as it does not consider the needs of the current market. As a result, Zara is able to address current style needs fast and this further enhances their competitive edge. The concept goal ensures the compan

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