Zara as one of the world’s leaders of fast fashion makes use of its understanding of the QR strategy importance (Dutta, 2002). The phenomenon of short lifecycles influences the strategies implemented by fashion businesses considerably as the mood of the moment or the seasonal demand make companies think fast of what trends will dominate the next period. High volatility is also an issue as customers change their tastes and demands in accordance with the most recent popular clothing trends, movie stars’ examples, etc. High impulse purchases also make the tasks for fashion companies harder as customers decide to buy something spontaneously, and it is the work of the designers and marketing managers to guess correctly what trends will make customers decide in their favor (Fast Fashion, 2009). To achieve this, the companies have to reduce forecasting horizons and face challenges for logistics management. Zara does this by transferring the production process and sourcing offshore, which does not involve additional transportation costs as international markets form a substantial part of Zara’s business (Infosys, 2008). Thus, becoming a global company allows Zara to choose the regions with the most appropriate tax climate, labor force costs, and potential markets, although without the necessity to face the issues present in them at all (Craig, 2004).
Moreover, to ensure comprehensive control over its modernization and development, Zara implements the speed-to-market program whose essence lies in speeding the production process up to get the competitive advantage in the market. This program makes the lifecycle shorter but is an integral part of the QR strategy. Moreover, the speed-to-market program needs less time for product refinement and allows launching quality production to the market within a shorter timeframe. Long-term relations with suppliers, manufacturers, and retailers constitute the basis of Zara’s international success as being confident of these suppliers, manufacturers, and retailers allow Zara to be sure about the quality of the raw materials they use and about the sales of their products in various markets. (Christopher, 2000). Besides placing its sourcing and production process in offshore zones, Zara also develops long-lasting business relations with its branches all over Europe, including its Russian, Spanish, English, German, etc. branches (Zara, 2009).
However, Zara can not be distinctly called either a demand-driven or a forecast-driven company because these two notions overlap to some extent. For example, a demand-driven company is oriented on the current trends in the market, but the implementation of the QR strategy in the modern quickly changing market at once makes the company into a forecast-oriented one (Zara, 2009). It becomes necessary to prepare forecasts to be ready for the new moods of the moment or volatility manifestations, and Zara comprises the features of both mentioned types of companies. Also, Zara displays considerable flexibility in shortening its development cycles and postponing certain color or design trends (Zara, 2009).
The company, working with numerous smaller contractors and long-term partners, has at its disposal the qualified management team that provides the senior management with adequate and permanently updated EPOS data and strong IT support presenting the latest computer innovations to Zara (Lowson, 2001). The latter includes information about the product lines of the company, detailed accounts on Zara’s customer base and the recent demand trends in the market. The information about the company’s suppliers is also included in the EPOS reports to ensure a comprehensive overview of the market situation (Zara, 2009). Finally, the proficient transport and delivery services add to the positive image of Zara as a reliable partner in the fast fashion business.
Reference List
- Christopher, M 2000, ‘The Agile Supply Chain: Competing in Volatile Markets’, Industrial Marketing Management, Vol. 29, pp 37-44.
- Craig, A 2004, ‘Zara: Fashion Follower, Industry Leader’, Business of Fashion Case Study Competition, pp. 1 – 7.
- Dutta, D 2002 ‘Retail at the Speed of Fashion’, Third Eyesight, pp. 1 – 7.
- Fast Fashion 2009, Fast Fashion is a Collaborative Process. Slideshare.
- Infosys 2008, Moving Work Offshore: It’s More Than Just Numbers. Infosys.com.
- Lowson R 2001, ‘Retail Sourcing Strategies: are they cost effective’, International Journal of Logistics, vol. 4, no. 3, pp 271-296.
- Zara 2009, Official Zara Website. Zara.com. Web.