Zara Case

1.a) What is innovative about Zara?

Zara has created innovation in many ways within the company. One way that Zara has been innovative is by not outsourcing some key supply chain activities. One of these components is the choice to keep the raw material finishing capabilities in house which allows them to make last minute choices. Because of this choice this allows them the flexibility to compete with its competitors be increasing reaction time to fashion changes. Another way that Zara encourages innovation is in their way that they promote their products to the customer. Even though Zara represented 70% of Inditex’s total turnover in 1999 without paying any advertising costs they chose to opt for a better understanding of their customer base. They have learned who their target market is and that it would be best to purposely limit quantities of their product in order to associate novelty with their products. Zara has also learned that they could take successful designs and slightly alter them in different ways in order to keep up to date with fashion trends from season to season.

1.b) What are the major differences in Zara’s supply chain when compared with M&S?

One of the major differences in Zara’s supply chain compared to M&S is how they have chosen to keep most of its operations in house and not outsourcing these activities unlike M&S. Specifically Zara has chosen to not outsource production activities including cutting, washing, ironing, plying and packaging of their garments unlike M&S. The other main difference between these two companies when comparing their supply chains is the noticeable difference in simplicity with Zara’s model vs. M&S’s.

1.c) What role does postponement play in Zara’s supply chain?

Zara uses the idea of postponement by requiring new product designs to be tested further in what they call test shops to ensure their client base likes the product before mass producing the product by chance. This technique helps limit the...