Zara’s the shops. This allows Zara to respond quickly

Zara’s collection includes men’s clothing (suits, trousers, shirts, T-shirts, jumpers, jackets, shoes,
accessories, etc.), women’s clothing (dresses, blouses, trousers, skirts, T-shirts, jackets, handbags,
shoes, accessories, etc.) and children’s clothing (collections for girls and boys between the ages of
0 and 14). H&M is often cited as its main competitor. Zara mainly distinguishes itself from H&M
through the strong, well-optimised vertical integration of all key activities from product design
through production to sales in the shops. This allows Zara to respond quickly and flexibly while
maintaining a reasonable cost structure. In contrast, H&M has outsourced many important functions
(not least production) and focuses heavily on marketing activities. H&M’s collections are designed
and defined far in advance.
Zara’s success is based on a business system that achieves a speed of response to market
demand that is without precedent in the fast-moving fashion clothing sector. Zara’s cycles of design,
production, and distribution are substantially faster than any of its main competitors. For most
fashion retailers there is a six-month lag between completing a new design and deliveries arriving at
retail stores. Zara can take a new design from drawing board to retail store in as little as three
weeks.
Products are designed at the Inditex headquarters in La Coruna on the northwest tip of Spain. Over
40’000 garments are designed annually with about one-quarter entering production. Designs are
sketched, committed to the CAD system, then a sample is handmade by skilled workers located
within the design facility. Working alongside the designers are “market specialists” who monitor
sales and market trends in a particular country or region, and “buyers” who handle procurement and
production planning. The three groups coordinate closely and jointly select which products go into
production.In contrast to conventional chain stores like H&M or C&A, close to half of Zara’s products
are manufactured within Zara’s local network, which comprises Zara’s own factories and
subcontractors who undertake all sewing operations. The rest is outsourced to third-party
manufacturers.