Zara offers competitive advantages over its competition by:
* Offering new styles throughout the year rather than just the standard times of
spring/summer and winter/fall. Zara introduces roughly 11,000 new styles throughout the
year compared to the competitors who average 2,000 *€“ 4,000 items.
* Creating customer demand for product by ever changing store inventory and having fast
turnovers, this creates a sense of urgency for the customer. If they do not buy it now they
may not have another chance. Zara stores turnover 75% every three to four weeks.
* Empowering store managers who are the ones most suitable to react to changing trends.
The corporate structure gives great power to the managers in allowing them to choose
which items go on sale, and when as well as specifically ordering items that they
determine to be large movers.
* La Caruno store operates as a trial store to trends. The commercials are able to unroll
new designs and trends and test them as a form of live, real time market research. From
these findings they are able to adjust production rates, quantities and control the flow of
goods throughout Zaras distribution channels.
The increase in profitability from the proposed action item will resolve in recording
positive margins by Year two of the rollout and record net income profits, before additional
IT expenses by Year four at *‚¬12 MN
As the manager I would implement a trial Windows POS system in three Zara stores. I
would focus on three stores that have large traffic and are in alignment with executive
