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Zara Company’s Business Model and Success Factors Case Study


Due to an extremely efficient business model, Zara achieved great success both in Europe and in the world. The other retailers could employ the elements of the same business model, for it is not impossible, given sufficient motivation and funds. Zara will be able to continue expanding all over the world with an equal level of speed and fast fashion by preserving the existing business model, keeping the industrial facilities in Spain, and actively using the achievements of the software industry.

Zara was founded by Amancio Ortega in 1975 and managed to become one of the most successful retailers in the world. At the moment, they own about 5,900 stores in 85 countries. Zara has developed an extremely efficient business model, which still ensures its success in the market of apparel production. This model consists of the following crucial elements. First, the advancement of technology allowed them to bring the time from designing to distribution down to two weeks, which gave Zara a serious advantage over the other retailers.

Second, Zara worked out a strong and effective logistics system, due to which new fashionable items arrive at the stores all over the world extremely quickly. Third, Zara is focused on satisfying a customer (“Zara, a Spanish Success Story” par. 17-20). The company encourages its staff to pay more attention to the customers, making their salaries depend significantly on commissions. Fourth, Zara spends a very small amount of money on advertising; its stores is its advertisement (Thompson par. 4). By controlling all the key elements of the business process, Zara has achieved its success and become a renowned brand (Ferdows et al. par. 3).

Zara’s business model has attracted the attention of other retailers. To my opinion, other companies could successfully employ this model since it contains nothing unusual or unachievable. Putting a customer in the center of attention and adjusting the production to a customer’s values and needs must be a universal rule for any retailer. The development of technology allows us to build a logistics model as efficient as Zara’s. Following the fashion would become even easier due to the speediness of the designing and distribution process (Lutz par. 1-3). However, if a company is not founded on the same principles as Zara, it may require hard work and serious costs to change the model, but the following success will reward these efforts.

By keeping the same business model, the leaders of Zara are able to expand their business globally, maintaining the same level of speed and fast fashion. Moreover, there are additional factors that enable them to do that. First, they intend to keep their industrial facilities in Spain (Petro par. 6), unlike the other retailers, who prefer to concentrate them in Asia. Currently, the Spanish labor force is cheaper than Asian. What is more, Zara is actively employing new achievements in the field of software for the sake of efficiency (Hiiemaa par. 20). The more advanced will software production makes, the more successful Zara will become, with the following increase in speed and effectiveness.

Zara has become a renowned brand and a successful retailer due to its well-developed business model. The other retailing companies could employ this model as well since its elements are not impossible to achieve, given the necessary funds and efforts. Zara is going to continue expanding the business over the world by means of maintaining the current business model, keeping the production facilities in Spain, and employing the new achievements in software.

Works Cited

Fersows, Kasra, Michael A. Lewis and Jose A.D. Machuca. Harvard Business Review, n.d. Web.

Hiiemaa, Kris. Erply, 2015. Web.

Lutz, Ashley. Business Insider, 2013. Web.

Petro, Greg. Forbes, 2012. Web.

Thompson, Derek. The Atlantic, 2012. Web.

Zara, a Spanish Success Story 2001. Web.

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IvyPanda. (2020, June 29). Zara Company's Business Model and Success Factors. Retrieved from https://ivypanda.com/essays/zara-companys-business-model-and-success-factors/

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"Zara Company's Business Model and Success Factors." IvyPanda, 29 June 2020, ivypanda.com/essays/zara-companys-business-model-and-success-factors/.

1. IvyPanda. "Zara Company's Business Model and Success Factors." June 29, 2020. https://ivypanda.com/essays/zara-companys-business-model-and-success-factors/.


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IvyPanda. "Zara Company's Business Model and Success Factors." June 29, 2020. https://ivypanda.com/essays/zara-companys-business-model-and-success-factors/.

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IvyPanda. 2020. "Zara Company's Business Model and Success Factors." June 29, 2020. https://ivypanda.com/essays/zara-companys-business-model-and-success-factors/.

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IvyPanda. (2020) 'Zara Company's Business Model and Success Factors'. 29 June.

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