Zara is a leader in rapid response retailing. In-house teams produce fresh design twice a week. While competitors typically up to an 11- month lead time to move a garment from design to manufacturing, total turnaround time at Zara is just 2 weeks. None of its style last in store more than a month. Zara is fast and flexible in meeting market needs by integrating design, production, distribution and sales within its own stores. Zara created about thirty thousand different items in 2017, because textiles are a labor -intensive business, most retailers source from low cost shops in Asia. Zara, on the other hand produces its most fashionable items 60% of all its merchandise at 12 companies owned factories in Spain. Clothes with longer shelf life are outsourced to low cost supplier in Turkey and Asia.

Zara supply chain is lightning fast. Once clothing is produced, it is shipped to stores in 24 to 36 hours. Using the latest information technologies, garments are continuously scanned as they pass through the distribution channel. Pre-determined fabrics await design instruction, and suppliers provide other needed materials, such as thread, zippers and buttons just in time not in advance. Nevertheless, the Spain based production and distribution model has its limitation. Rapid response retailing becomes harder to manage the farther away from Spain the firms outlets are located.

Management emphasizes production innovation and value pricing. Adapted to individual markets, prices are higher in high income countries and more competitive in low-income or low-demand countries. Zaras positioning differentiates the firm from the key competitors based on pricing (low to moderate) and fashion (slightly formal and chic), Swedens H&M offers merchandise that is casual and targeted to younger people. A key competitive advantage of Zara is that it stays at the very leading edge of fashion.

Using wireless organizers, managers and sales people in Zaras stores advice headquarters daily about constantly changing consumer tastes. Stores employ retail specialist with a strong sense of fashion who advise on which items move faster.

Zaras researchers duplicate fast moving items and visit college campus, clubs and fashion magazines to provide additional inspirations. The firm is expanding in Asia. Managers intend to apply the same strategies that have proven successful thus far.

QUESTIONS:

1. What were the limitations faced by Zara while retailing away from Spain? Justify in about four valid points. (4 Marks)

2. If you were a marketing research consultant, what recommendations (strategies/ideas) would you give to Zaras managers for a successful retailing expansion in Asia? Justify in about four valid points

(subjct is markting )