Value Proposition

Zara offers fashionable and affordable clothing by continuously presenting styles that are trendy and "hot" for the season. They are trend-setters in the field with excellent response in trends, whether it is style, cut, or color. Zara's design team generate approximately 1,000 designs per month that is then sent to their manufacturing plants and checked back in the Zara Centre, located in Spain. Zara's supply chain is integrated vertically through their closely controlled facility in Spain. This ensures a faster turnover and delivery because every item is inspected and stored in this controlled facility. 

Store managers in their brick and mortar stores submit their orders based on quantity and it is sent to the store direct from Zara's facility in Spain. The products on their E-Commerce website is sent from various warehouses via expedited shipping, and in many countries, store pick-up is available. 

Zara uses a pull system in their supply chain and inventory management. They produce a small quantity of each style because of the numerous styles that they come out with on a month to month basis. This is beneficial to their own e-commerce website as the turnover is quick and easy. Zara is able to update their website constantly based on the changes in the trends and styles that they offer. 

Zara uses the just-in-time manufacturing method which can pose a lot of threats. Any disruptions in manufacturing due to weather, factory problems, etc., will slow down production due to the different steps it needs to take after manufacturing and into the stores. Factory wages is also higher because of their facilities in Spain, which is typically a higher wage because of the higher cost of living in Europe versus Asia and South America, where many of their factories are located.