The Logistics Strategy of Zara Company-Free-Samples for Students

Question: How can Zara maintain its competitive advantage, here the concept of sustainability may be introduced? Are there similarities between Zara Dells and Myers formula for success and could this be suitable for other companies and if so explain why, if not explain why? Answer: Introduction The following paper is about the comparison between the two giants in the clothing and accessories retail industry Zara and Dell and Myer. These two companies have been the potential competitors for a long time now. The prime focus will have to be on the logistics and supply chain management of these two companies. The logistics and supply chain management of the two companies will be discussed and contrasted in order to find the basic differences. Zara has been one of the most successful companies in the clothing and accessories retail industry (Zara.com 2017). Supply chain management is one of the main aspects of success for all the companies. Another company is Myer that will be discussed in this paper as well. Myer is one of the Australian fashion retailer organizations that have been very popular. The companies should look for better supply chain and logistics management so they can reach to their customers faster and smoother. The customer segmentation should be fixed properly by the organizations and they should look to utilize on these things in a better way. The logistics management of Zara has been looked upon as one of the best in the industry. This is why the delivery of the products is done on the correct time. The decision making process of the officials should be proper and Zara has been efficient in executing all their plans of serving the customers with proper logistics supply. Overview of Zara Zara is located in Spain and this organization was founded in the year 1975. They are considered to be the largest retailer in the world. Zara is the main brand of the Inditex group (Zara.com 2017). They have expanded in various countries so they will require a strong logistics supply. Their online presence is quite strong so they have acquired the trust of millions across the globe. The inventory management of the company is exclusive in the sense that they have used the RFID technology to respond better to the requirements of their customers (Zhu, Mukhopadhyay and Kurata 2012). The manufacturing process of Zara is quite fast as well since they are able to innovate new designs and spread them into the market (Caniato et al. 2014). They have upgraded their distribution of the merchandise through reverse milk-run production and distribution facilities (Zara.com 2017). Overview of Dell Dell and Myer has been one of the companies that work in the telecommunications industry. They produce laptops and other accessories (Dell.com 2017). This is why the logistics and supply chain management between the two companies will be very useful indeed. The organizational structure of these two companies is also very different. This is why the logistics supply chain will be different as well. Both these companies have their individual logistics supply chains (Dell.com 2017). Logistics management of Zara The logistics management of Zara is unique. They have also focused a lot on the inventory management as well. The main thing that is responsible for so much success of Zara is the centralization. Their centralized logistics management has earned them a huge place in the concerned industry (Fawcett, Ellram and Ogden 2013). The decision making of this organization is done with much co-ordination. The rhythm of Zaras logistics is deep and fast. They are always concerned about the fulfillment of orders at their stores. All the outlets of Zara send two orders per week on specific days and times. The trucks leave from the warehouses at specific times and they arrive at the stores with the shipments at specific times. The garments that are ordered by the customers are always labeled and they are priced as they reach their destination. This is a very smooth process and all the staffs from all the departments have a clear idea on what things they have to do (Christopher 2016). These departmen ts are procurement, production, distribution and the retail ones. This is how Zara carries out a proper logistics network. The distribution channels of the company are so good that it takes about only twenty four hours to deliver all the goods (Stadtler 2015). This is applicable for the European outlets of Zara. Tn the countries of Asia and America, it takes about 40 hours to deliver the goods. Zara maintains some of the basic of the logistics and supply chain management. These are:- They always segment their customers according to their service needs of various groups. They adapt the supply chain management properly so they can give the customer segments what they need. They have customized their logistics network according to the requirements of service and profits of their customer segments. They tend to listen to the market signals and arrange the supply chain according to the service needs. They are able to make difference between products that are closer to the customer and speed conversion of the supply chain (Jacobs and Chase 2013). Zara is able to manage the total costs of supply and manage the sources with proper technological strategy. Zara is able to develop a supply chain wide strategy that backs up the several levels of decision making. Competitive advantage of Zara Zara has been extremely successful in their quest to become the most successful organization in the fashion retail industry. They have been extremely successful in global retailing. They have also received the best points in the stock market index for the social responsible investment (West, Ford and Ibrahim 2015). They have been focusing on innovation, improvement and collaboration. These things have contributed a lot to the learning organization. The new product development and innovative thinking process of Zara has been acclaimed all around the world. The other causes for the competitive advantage for Zara are the fact that they have been constantly fostering for the international expansion and constant invention. They have been the global leaders in this industry for a big reason indeed (West, Ford and Ibrahim 2015) The approach of Zara has been continuously customer-oriented and this has driven them to focus on the requirements of the customers. In the modern international mark et, one of the key components is the brand credit. Zara has been largely successful in establishing a brand supremacy over its competitors. The value chain analysis of Zara shows how they have dominated the market. Comparison with Myer Myer has been considered as one of the most famous clothing retail chains in Australia (Myer 2017). However, it has not been so much successful as that of Zara. This is because Zara has segmented their markets along with their quality of products with a division between their customers on the basis of psychographic and demographic lines (Riefler, Diamantopoulos and Siguaw, 2012). Myer has not yet shown any intention to do all these things. This is why their target segmentation is not quite appropriate for the benefit of their customers. The brand value of Zara is so much high that they offer money value to their customers. It has been observed by certain experts that the concept of My Store by Myer is quite full of ambiguity (Myer 2017). The target market of Myer is a simple general target market of all groups. Whereas, the target market of Zara is the fashionable young people between 20 and 35 years of age. Myer has been considered as a departmental store along with an extensive col lection of products. Their customer service is not much satisfying contrasting that of Zara (Riefler, Diamantopoulos and Siguaw, 2012). The logistics service of Zara is always on time. This is why the Just-in-time policy of Zara is considered to be the market leaders. Myer always offers several discounts as part of their sales strategies to attract the customers. However, it has been seen that Zara offers their young customers with many fashion products that lures the customers with promotional marketing (Powell 2013). Logistics and supply chain of Zara It has been observed that Zara has achieved its competitive advantage through the proper logistics and supply chain strategies that they have adopted so far. In this way, they have been able to land with many effective marketing strategies that will benefit their customers and they will be able to receive their orders within the specified time indeed. The inventory management costs have been minimized by Zara that would help them to focus more on the production costs and improve the product quality (Qrunfleh and Tarafdar 2014). All the manufacturing units of Zara try to utilize these sources. Zara has focused more on the costs of technology that will be beneficial for them to strengthen their operations and improve the level of customer satisfaction (Best 2012). They are very active in the social media marketing process as a part of their integrated marketing communications. In this way Zara has modernized itself. They have increased their customer value proposition by the use of the se means. Comparison between Dell and Zara Dell is one of the leading firms in the production of electronic devices like laptops and computers. The supply chain management strategy of Dell and Zara are quite different from each other since they deal in two different segments of products. However, their purpose is the same and i.e. to do good business. The supply chain of Zara is totally vertically integrated where Dell does not take part in the production process actively. They tend to hire the third party suppliers for their completed goods (Sodhi and Tang 2012). These goods would be delivered by the third party suppliers within a given time. Zara keeps their control over all the phases of production of the garments. All the units including manufacturing, crafting and delivery process is looked after the company. This is why Zara has received such an immense success in fashion retail industry (Qrunfleh and Tarafdar 2014). The customer preferences change very quickly and the company has to be aware about these things very cau tiously. This is one of the most important factors that the entire control of the company has made this possible to hold all sections of the operations. This total control helps Zara to launch new designs of clothes within a very short time. Dell makes these operations through third party suppliers so they take some more time to execute these operations. This is one of the main contrasts between Zara and Dell (Qrunfleh and Tarafdar 2014). Dell has to make a coordination of several small processes to execute this. However, this is quite proper for Dell since they can make the necessary changes that are needed (Sodhi and Tang 2012) Logistics supply channels of Zara and Dell Dell follows an indirect distribution channel that includes the retailers, suppliers, assimilator, distributors and the end customers. Dell follows the business to business marketing process that permits their customers to order the laptops online (Sodhi and Tang 2012) Dell connects to their clients directly and they get rid of all the channels that fall in between. On the other hand, it has been observed that the manufactured products of Zara are shipped from Corunna depot or Zara logistica in Spain. They do not stock and pile up their inventories at the warehouse. Rather they send them to the Zara stores from where these orders are distributed. Zara would stop the production of all those products that are not selling. This would mean that Zara does not want to pile up their old stocks rather they only want to make new stocks be available to their customers. They send the ordered products to their customers and the customers can track their orders anytime after they are being shippe d (Lehmacher 2017). Sustainability of Zara Zara has been named as one of the most sustainable organizations in the fashion retail industry. They have been manufacturing their products with quality cotton that will be very much important for keeping the quality of the products. Zara has built up the eco-efficient stores that will be very helpful for all the customers indeed (Joy et al. 2012). They have begun to focus on the lower electricity consumption. This will be beneficial for the customers to avoid the greenhouse gas emissions. They have taken up the pledge of zero landfill waste because of which they began to reuse the packing supplies and they want to achieve that goal within 2020. They have produced an enormous amount of textile waste, paper and cardboard waste in the year 2015. They are looking forward to reduce it so that their production can be eco-friendly. It is very obvious that the textiles cannot be recycled. This is why Zara has made partnerships with the famous universities, social organizations and the lead ing organizations to find out the proper effective solutions to these problems (Joy et al. 2012). Suitability of success formula to other companies The formula of success that have been showed by Zara, Dell and Myer are very much dependent on the proper service delivery and building of a proper logistics and supply chain management. The new startup companies who want to become successful in the future with a huge profit margin should always keep in mind the fact they should give the utmost priority to their customers at first (Perreault Jr, Cannon and McCarthy 2013) Next, they should think about changing preferences of the customers. This will drive them to promote their products with the innovative marketing strategies. There are some similarities between Zara, Dells and Myer. All of them want to provide their customers with the best service quality with the best quality products. They have given much importance to supply chain strategies. However, the target segmentation of Myer has not been that much effective indeed (Perreault Jr, Cannon and McCarthy 2013) The marketing strategies along with the logistics strategies have bee n the most appropriate indeed. The strategies taken in by Zara are the most appropriate ones indeed. This is why the just in time policy, proper dispatching of the goods from the warehouses to the shipping addresses and a strong presence in the social media should be highly recommendable. These strategies will be indeed suitable for their growth (Perreault Jr, Cannon and McCarthy 2013) Conclusion This paper can be concluded by saying that Zara has been the leading fashion retail industry in the world and they have been operating in the universal basis. Their marketing and promotional strategies, logistics and supply chain strategies have been very much in demand to follow for the startup companies. The other companies like Myer and Dell have also their own strategies. These strategies would not be that much effective especially for Myer. Their target segmentation process has not been that much effective. The companies should be putting in some effective logistics and supply chain management strategies to enhance their business capacity. 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