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rate and brand Despite Spain’s 24 per centu alara increased its ; of what they wants to visit stores frequently in search as Amancio Ortega built the world’s largest fashion empire through his Zara-branded products and company-owned stores. Through his management approach, Ortega has become the third-richest man in the world hchind Microsoft’s Bill Gates and Mexico’s Carlos Slim Helu. Headquartered in La Coruña in Spain’s Galicia region, Orrega founded the Inditex hand Group with Zara as is . rcent unemployment rate and crippling debt, in 2012 Zara Its revenue by 17 per cent. Also 2012, Zara Zara averaged a new store opening every day, including its 6000th store launched on Londonis Oxford Street. Although the influence on economic environment (an influence from the external Success Meet that we examined in Chapter 2) affects success, the way Zara uses its resources and capabilities Chapter 1, core competencies are capabilities that serve hapter 1. con for core competencies (defined in as a potential source of competitive advantage for a firm over its rivals) demonstrates the value of understanding a firms intemal organisation (this chapter’s subject). Ortega built this successful business based on two critical goals: give customers what they wante con it to them faster than anyone else To do ‘tast fashion, is called, several critical capabilities must be in place. The first critical capability is the ability to design quickly the design pace at Zara has been described as ‘ frantic! The designers create about three itenus of new cloching a day, and pattern makers cut one sample for cach. Second are the sales specialists from each region where Zara has stores. They provide input on customer tastes and habits, which are reported store managers. Each Each specialist is trained to keep an eye on what people are wearing, which Ortega has done personally as well since founding Zara. As such, Zara has a tcam approach to match quick and creative design to information coming in from the sales staff through regional specialists and sector specialists to operationalise new fashion ideas The supply chain is also managed much more efficiently than those of other companies. The logistics department is the essence of the company, rather than waiting for cloth to come in after designing, it already has much basic cloth and owns its own dyeing operation to maintain control and speed. Zara’s objective is to deliver customised orders to every store in its empire with a 24-hour turnaround deadline for Europe, the Middle East and much of the United States, and 48 hours for Asia and Latin America. The frequent shipments keep product inventories fresh but also scarce since they send out very few items in each shipment. This approach compels customers to they want and, because of the scarcity, creates an incentive for them to buy on the spot because it will likely not be in stock tomorrow. Accordingly, Zara’s global store average of 17 visits per customer per year is considerably higher than the average of three visits per year for its competitors. Until 2010 Zara did not have an online strategy (this is common in retailing, David Jones only recently got into this arena). Unlike most retailers it has used very little advertising because it has focused on a rather cheap but fashionable approach. The fashion draws the interest of customers and has thereby created a huge following on Facebook, with approximately 10 million followers of clothing gives customers a sense of individuality. This gives Zara a stronger potential to pursue an online strategy relative to its competitors Most Zara stores are owned by the parent company and many of its suppliers, although not owned by the company, are considered long time, relationship-oriented partners As such, these partners identify with the company and thereby are also loyal. This approach also sets Zara apart and makes its suategy diffieult to duplicate because all of the various facets and capabilities of the company fit together through a unified culture . As nored above, Zara also operates its own dyeing plant for alle giving it significant control over its products . Likewise, it sews many of these garments in its own factories, and thus maintains a high level of quality control and anability to make quick changes. Overall, the company has a unique ” This s compares lavourably with other as Gap The rarity of the indis competitors such individual pieces through store set of capabilities which fit together well as it manages activities to produce “fast fashion, which creates demand from its customers and loyalry from its partner suppliers. Suures E Carlyle, 2023. The year’s biggest winner Zara billigte Arancio Ortega, Purbes, heu/www.torbes.com. 4 MAch Dudley A. Dermath & M Townsend, 2013. The hidden cost of fast fashion, Bloomberg Businessweek, IL February 15-17, Walt, 2013. Meet the lardonicletas the world. Fortune 14 January 7+79, Womens War Daily, 2017. Todete Asos past double-digit sales pias 20 Sepcember 6, Borzykowsk, 2012. Zara eludes the pain Spain. Canadian Busine. 17 September, ek Willems, W Janssen Sanne M Breng a. S Screens & N Vancouven, 2012. From Arman w Zara: Irapression formation Laser ou fashion store patrones Jurnal of Pasies Nescarc, (63): M97-514 t

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