Zara started from La Coruña in Spain and began to expand internationally in 1988. In recent years, Zara has grown at a high speed, not only threatening many traditional clothing brands, but also being called a fast fashion representative, although Zara Zara does not like this title. The key to Zara's success is that the design speed is much faster than the traditional process. The number of styles is even more amazing. It can be put on the high-speed to match this advantage. Although it is also reported that the design is plagiarized from time to time, however, Many of the pirated garment makers in Asia have never been able to become multinational brands. Zara is clearly not a “copy cat†degraded by global anti-business and conspiracy theorists. Its business model must have its own special features.
The most obvious aspect of Zara's business model strategy is that supply chain management is different. Most of the world's garment industry now uses Asia as its main manufacturing base, including China, Vietnam, India, etc., but Zara's supply chain. However, it is widely distributed in Spain, Portugal, Morocco, Turkey and many other countries. The top 3 countries account for 60% of the production capacity, and they are close to the European market. This allows Zara to play its advantage in quicker strategies because other competitors’ products are from Asia. When shipped, Zara can move from design to manufacturing to shelf in 2~4 weeks, and quickly react to market changes.
Due to long-distance shipping, other competitors are developing in the same way with mass production and one-stop delivery. Otherwise, if the market responds well, it will be too late to add the code. This also poses a corresponding risk, that is, if the design is not as popular as expected. , will lead to a large amount of inventory, had to be greatly discounted to clear the end, Zara because of the close proximity of the production site close to the market, can be a small amount of trial production, the response is quick to add, the response is not good can still be quickly exhausted, There is no need to discount or sneak into the outlets, which ensures Zara's profits and eliminates the storage costs of stacked inventory.
Competitor brands are under pressure to sell a large number of products that have already been manufactured in large quantities. The compliant business model is a lot of money, a lot of exposure, overwhelming marketing advertising, and comprehensive distribution of channels to ensure that consumers will pay, Even H&M, which is also classified as fast and fashionable, can't be excused. About 4% of its revenue is on the advertising budget. Zara has been able to adopt a business model that does not pay attention to advertising, without the pressure to produce a large number of products. Zara's marketing focuses on social marketing. Save on warehousing and marketing costs, allowing Zara to maintain parity.
In this part, if other competitors are willing to make a big move in the supply chain, they can do it, but this has to be combined with the launch of 12,000 new designs every year, and it can attract a lot of design skills. This is not the case. It is easy to imitate, Zara's massive design results, it is inevitable that there will be a "collision" coincidence, or it is inevitable that a few designers suspect that "too many references", and many opponents and conspiracy theorists attacked plagiarism, However, countless plagiarized “cottage†garment factories in Asia do not have the ability to copy 12,000 designs every year.
Zara's amazing design productivity comes from Zara's entire organizational structure and management culture. In the past, the mainstream management method of enterprises was “top-downâ€, and the level supervisors issued orders. However, with the explosion of information in the digital age and the new management needs in the era of knowledge economy, the needs of management knowledge workers are different from those of laborers. The knowledge worker's job is to think. In the past, a whip was given orders. Only the supervisor is thinking and is wasting human resources. Now the emerging idea is “bottom-up†to fully promote the productivity of knowledge workers. Zara is one of them. The leader.
Unlike other competitors, Zara does not have a design director. The 350-person design team does not even have a clear hierarchy. Everyone has the right to independently design and market. Everyone can express their opinions during the design process. The sloppy discussion seems to be out of order, but it is a thorough use of the brains of everyone in the team, making the team a "multi-core computing" and quickly processing a large amount of information, and Zara also collected a lot of information for the team's reference. Zara sells the apparel products on the channel update shelves every two weeks, together with the online store sales information and customer response information, immediately feeds back to the design team to find out which designs are sold and which are slow-moving. Batch design.
Like "multi-core computing"
Zara CEO Pablo Isla said that in Zara, there is no magical formula in design, and there is no star designer. It is purely in response to changes in data throughout the season. Business managers and analysts are always discussing sales information with designers. A design is very popular. The design team uses it as a basis to create a series of products with different materials, different patterns and different prices. In the end, Zara will provide consumers with fashionable clothing.
Since 2004, Zara's performance has grown by 240%, and H&M has grown by 180%, but Gap has grown almost zero, not to mention second-degree bankrupt American Apparel, while Gap revenue declined in the first half of 2016, and H&M's profit decline Zara's two-thirds of parent company Inditex's revenue grew 11%. Many competitors want to copy the Zara success model, but they can't catch up because Zara's success is based on the management of the design team, the way of capturing information, and the special business combination of supply chain model and marketing model. Mode, just copying one of them has no effect.
In the face of the digital economy, Zara is more cautious, slowing down the speed of physical storefronts, focusing on a few flagship stores, and vigorously developing online shopping. This strategy makes market analysts worry that growth will slow down, but Zara is not like Many other companies often succumb to market pressure and expand indiscriminately. Their cautious and compliant approach allows them to maintain their performance on the online shopping trend while sweeping through many channels and competitors. This is the online area in many traditional channels. It is an era of treacherous attacks and is even more valuable.
The CEO of Zara believes that the most crucial factor for success is not the supply chain management that the media has concentrated on, but also the fast fashion name. It is considered that this title cannot reflect Zara's efforts in the design of each piece of clothing. Success does not come from a certain The most important thing is the human factor. Design is everything. That is, the key is actually the management of the design team.
The “bottom-up†management philosophy believes that front-line staff can master the most information. In the bottom-up management mode, the superior is in the role of assisting and coordinating the lower level, which is conducive to the organization to present the most information; Under the traditional whip-style leadership, the subordinates tend to conceal the information, "there are countermeasures under the policy", because letting the superior know more and more disadvantage to themselves, so the level is more than one, the superior is often seriously out of touch with the actual situation, and do In order to avoid such a situation, the superiors must implement various measures to spy, and the subordinates must also counter-measure, and the energy of all the people in the organization is seriously wasted on the top and bottom of the thief, resulting in Low productivity.
The “bottom-up†organization also facilitates the processing of large amounts of information on the fly, like “multi-core computingâ€, where everyone helps to calculate a part, rather than focusing all the data on the upper level to think and decide; in contrast, in traditional organizations In the middle, all the data are concentrated in the superiors, which will cause the superiors to be overwhelmed by excessive information, leading to decision-making opportunities. However, if the data is filtered before being reported, information distortion will occur, or the lower level can take the opportunity to “report the news and not report the worryâ€. hide.
Zara's success can be said to show the productivity advantage of the "bottom-up" thinking in the era of knowledge economy.
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