Zara Is Vertically Integrated

Zara is vertically integrated as a result of its focus on being the quickest and most agile fashion retailer in the market. Zara’s structure vertically integrates the design process, just in time production, sourcing, delivery and sales which provides a very close and informal information network and efficient coordination across all of the production and sales units. For example, store managers are able to share feedback on how new designs are being received by the market with the relevant design and production departments to help improve the process. Production and delivery of items, such as incremental design and volume adjustments, can thus be tweaked and improved during the season and put into the stores with little lead time. Another example is the speed at which Zara’s can take a product from design to market. The industry standard is for a design to market cycle of six weeks while Zara is capable of executing a three week production to market cycle.

The operation in Zara supports its supply chain strategy as all operation is very well communicated and efficient. Zara strategy is growth through diversification with both horizontal and vertical integration. Zara copies fashion by adapting couture designs. It manufactures, distributes, and retails clothes within 2 weeks of the original design appearing on catwalks. It owns the entire value added chain and competes on the basis of speed to market, having invented the concept “fast fashion”. Finally it is important to highlight the smooth integration between Zara business strategy and it is operation strategy. Zara operations are in line with the strategy and the manufacturing and distributions systems enable delivery from concept to store within 14 days. Also it has its ownership and control of manufacturing facilities in Spain allows for quick response. And the ownership of its high tech distribution systems allow for very fast delivery from factory to stores all over Europe. In addition Zara uses of sales...