Question

Article: www.gallaugher.com/Zara%20Case.pdf

1) Based on the article which element of Zara’s strategy do you believe best explains its success?

2) Based on the article assess the difficulty a competitor, such as Gap, faces trying to re-create the resources, capabilities, and core competencies that define Zara.

Answer 1

Not one, but two elements are most important in explaining the success of the Zara in the fashion industry, as follows:

1. Vertical integration,
2. Technology enabled value chain

The article explains Zara as a company that did something different for its competitors by using two things one is vertical integration that allowed it to take over the suppliers, manufactures, distributors and stores and other one is integration of the value chain with technology. Use of high tech information system for supply chain management, distribution, ordering and inventory management allowed it to reach success that no one ever imagined without sales and promotions.