Value Creation In The Global Apparel Industry
Introduction
The Apparel Industry consists of companies that design and sell clothing, footwear and other accessories. (basics to luxury items) Apparel Industry acted as Wholesalers to retailers to consumer at higher profit margin. Workers make specific pieces of clothing, often in a narrow range of sizes and colors. These pieces are then integrated with the output of hundreds of other such companies spread across dozens of countries.
Contd..
For example- one factory makes only zippers, one makes only lining other focuses on designs, marketing, advertisement etc. It advocates the strategy do what we do best and outsource the rest. In 1970s getting a garment from the factory to the customer took six months, but now the market will changed. Now it takes about six weeks but zara takes only 15 days for the same.
Z A R A
About zara
Co-Founder- Mr. Amancio Ortega & Rosalia Mera First store opened in 24 May 1974 Headquarters- La Coruna, Spain Presently Zara have 1700 stores in 78 countries worldwide Zara has continually maintained its mission to provide fast, affordable, and fashionable items The first store featured low-priced look-alike products of popular, higher-end clothing fashions. The first store proved to be a success, and Mr. Ortega began opening more Zara stores throughout Spain.
Cont
Each new design -2weeks Each year- 10,000 new designs Employees- 60000 Spain- about 30000 and rest in outside world Men's clothing and Women's clothing as well as children's clothing. Subdivided in Lower Garment, Upper Garment, Shoes, Cosmetics and Complements, Zara transferring fast fashion production in low-cost. The fashion group also owns brands such as Massimo Dutti, Pull and Bear and Bershka.
ZARAs Value Chain
Material Team
Design Team
Testing Stores
Productio n Facility
Sales
Network
end -customer
Designs
Zara believes no style lasts for more than four weeks. It keep on tracking market, events fashion trends and customer preferences. It designs about 11,000 distinct items per year compare to 2000 to 4000 items by competitors.
Sourcing
It grapes the ideas from TV, internet, film content store managers industry publications and trend spotters who focus on university campus and night clubs. Zara acquires fabric, and other inputs plus the finished products from suppliers in Spain, India, Morocco etc. Zara has the ability to scrap its entire production line if it is not selling, by just adding new colors or new fashion line to it.
Production
Change with time
Logistics
Effective and efficient transportation network Fast delivery time Ability to distribute merchandise within 3 weeks Promotes service quality Quick response in supply chain Coordinates with all aspects of logistics
Marketing
The company does not believe in spending more on advertisement or promotion rather emphasize on Rapidly changing Product lines Relatively high fashion image Quality goods It spends less than 1% of its revenue on media advertisement.
Store operation
Zara stores has two primary purposes1. Present the companies face to the world 2. Function as marketing research agents
Firm infrastructure
Attractive stores, both inside and outside, are an assets. Makes the customers enter a beautiful store where they are offered latest fashion Its all about creating a climate of scarcity and opportunity Buy now because you wont see this item later
ZARAs Success Factors
1. 2. 3. 4. 5. 6. 7. Utilizing shops actively Changing the store layout in every 2weeks Short period of Collection preparation The principal of small quantity production Creating the value from product differentiation Utilizing the advantage of geographical condition Presently, no other company can shift new fashion designs to stores as quickly as Zara.
Submitted By: Gyan Prakash Ritu Jamwal Bhargavi Singh Guneet Pal Kaur
