분야
docStrategy 1: Shorter Lead Time
Strategy 2: Creating Low Quantities
Strategy 3: Leadership in Numbers
Strategy 4: IT strategy
Challenges to foresee:
Current value system
Sustainability
Differentiation
Suggestions:
Upgrade value chain
Confirm the brand image
Works Cited
Strategy 2: Creating Low Quantities
The second strategy successfully formulated by Zara is to create an artificial scarcity by producing small batches of any single item. This reduces the risks of having just a few styles that are rejected by consumers. When people know the clothes in the store will not be there for long, they tend to desire for them even more.
Another benefit is that there are only just a few inventories to get rid of at the end of the season. Zara offers only 18% of its products on discounts at the season-end which is only half of what the competitors do. This leads to higher profit margin per product.
Strategy 3: Leadership in Numbers
Instead of more quantities per style, Zara produces more styles, roughly 12,000 a year. Thus, even if a style sells out very quickly, there are new styles already waiting to take up the space. To produce many styles according to customers’ demand, it keeps its lead time short. Thus, it means information technology, communications infrastructure, distribution management, and design and product development are all important.
Strong infrastructure and distribution system ensure that Zara can provide new items to the stores twice a week. As a result, the stores look fresh every 3-4 days and all products in the store change into brand-new ones every two and a half week. Therefore,
