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Published byHarold King Modified over 9 years ago
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QUALITY The design of Zara’s headquarters also make su re that equality is reinforced. The headquarters consist of large halls, filled with isles of desks. T he managers usually sit in the middle. However, everyone has the same size desks and there a re no secluded offices. This is because face-to-f ace discussions are always encouraged and em ployees are encouraged to express their views and concerns.
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Have you ever seen a Zara commercial on a billboard or on TV? The other trend-bucking aspect of the company's business model is its a pproach to advertising. Fashion retailers spend on average 3.5% of reve nue on advertising their products, while Zara's parent company Inditex s pends just 0.3%. But that doesn’t means that Zara is doing nothing for its product promot ion, Zara’s take on product promotion are slightly different form the oth er counter parts The company believes that its shop windows, the contents of which are also decided in La Corua are all the advertising it needs. The philosophy seems to have worked. The company's success is a proof that it is still possible to build a massive brand by doing no more than m eeting a market need. ADVERTISING
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OWNERSHIP AND CONTROL OF PRODUCTION For one,most other retailers (like the American Chain Gap and the Swedish retailer Hennes & Maurits) completely outsource their productio n to factories around the world,many of them i n low cost Asian countries. In contrast, it is esti mated that 80 percent of Zara's production is c arried out in Europe, much of it within a small r adius of its production is in owned or closely-c ontorolled facilities. While this gives Zara a tremendous amount of flexibility and control,it does have to contend with higer people costs,averaging 17-20 times t he costs in Asia.
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SALE Apart from designing to the fashion-of-the-day, Zara's strategy of producing low valum per styl e and changing products quickly in its stores en abels it to cut down on the discounts as well. O nly about 18 percent of Zara clothing dosn't w ork with its customers and must be discounted. That's half the industry average of 35 percent. Zara also has two clearly time-limited sales a y ear rather than constant markdowns.
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