Zara's Multiple Level Strategy

Here are some of the Factors that have contributed towards the success of Zara’s multi-level strategy:

Vertically integrated-   Zara’s vertical integration is one of the main sources of success and competitiveness in the textile and fashion industry, because it allows the company to not only be efficient and cut cost and time, but develops a merchandising strategy to establish an environment of scarcity, opportunity and fast-fashion. Zara manufactures around half of its production in-house, with only a part of its production from Asia. The company manages all the functions of design, warehousing, distribution, and logistics. Zara deliberately leaves extra manufacturing capacity to be able to respond rapidly to unexpected demand.

Positioning: Zara positions itself differently; it does not keep prices equal in all countries as the prices have to cover costs which vary by country and target margin. The prices are based on what comparable products sell in each country, the level of income and what the consumers are ready to pay. In Spain it’s positioned as an exclusive brand as 80% of the citizens can afford it.

Small quantity: Zara manufactures and distributes its collections in small batches, which makes it more efficient to manage design and distribution of its products in house. This gives Zara more flexibility in following the market trends and customers tastes and adjusting to them in a short period of time.

Customer driven: Zara offers about 12,000 styles a year and focuses on offering a wide choice to customer’s satisfaction. The company ensures that the stores are able to carry clothes that various consumers want at that time. Zara offers its customers a unique mix of affordability, exclusivity and segregation, as well as creating a unique shopping experience and has an excellent personal customer service in the stores. Most importantly, they provide the top quality trends at an affordable price to an average customer.

Unique selling proposition:...