Question

Please answer the following quesitions in 200 words or more.

A. Which elements of Zara's strategy do you believe best explains its sucess

B. Assess the fiddiculty a competitor, such as Gap, faces trying ot recreate the resources, capabilities, and core compentencies that define Zara.

Answer 1

Ans A) Zara is undoubtedly one of the most popular fashion retail brands worldwide.

Few elements of Zara's strategy that are responsible for its success are as follows:

1. Zara follows customer - centric approach i.e customer comes first. This organization culture is one of the greatest strengths that has led to its huge success and made it a favourite among the people.

2. It trains its staff to be sensitive to customer needs, pay attention to their comments about the styles they want, their ideas, observe the new styles that they are wearing and pass on this information to the concerned department for further research.

3. This brand makes an excellent effort to update and change its product collection as per the latest fashion trends. You see a clothing style in a fashion week or a new winter style is trending, you will be able to find it in Zara stores in a couple of weeks. This attracts a lot of customers who are keen on buying the latest trends and are looking for stylish stuff.

4. Zara's marketing strategy is simple, it provides high quality, stylish and latest fashion collections but at a very affordable price. It creates new styles as per the latest fashion trends and introduce it in their stores in 2-3 weeks. Other brands takes at least six to eight months for coming up with new styles which provides an edge to Zara.

5. Zara keeps a particular design or style on the shop floor from three to four weeks and replaces it with new styles. This practice helps in drawing customers more frequently to the stores as they will have access to new design and styles in a very short duration of time and hence increases their satisfaction level as well as product sales.

5. It manufactures less quantity for a particular style. This helps them in displaying more styles at a time than displaying limited styles in larger quantity. It helps them in judging if a style is suffering from poor sales or is popular for further planning. Lesser availability of a particular style also creates artificial scarcity which leads to more demand for that style.

Ans B) Following are some of the issues that GAP will face if it tries to recreate the resources, capabilities and core competencies that define Zara:

1. Gap follows the practice of manufacturing goods in huge quantities at the start of the season which leads to unsold goods staying in the stores during the entire season and no new styles being introduced. On the other hand, Zara having an effective and efficient supply chain can produce small quantities of different styles and introduce fresh styles within no time. It will be difficult for Gap to streamline their manufacturing process to produce limited quantities as they will be having huge piles of raw materials as well as manufactured products which are unsold at this moment. Disposing them off will incur a huge loss to the company.

2. Zara provides trendy and stylish clothes at an affordable price. This is not the case with Gap as their prices are way more expensive. It will be very difficult for them to lower it down to a level of other fashion retail brands. Even if they lower it down by a margin, customers will prefer brands like Zara and H&M who are known for their designs and styles at a much lower price. With less sale and low product costs in the current scenario, the brand will not be able to sustain.

3. Gap is not known to be producing stylish trendy clothes. They will have to shift their focus on stylish clothing which is not their game. It will be very difficult for them to start a new line of clothing from the scratch. Also lowering lead times and following latest trends via market research will be a huge hurdle for them.