Zara Essay Example | Topics and Well Written Essays - 1500 words - 1

Zara - Essay Example Several leading organizations are trying to implement business expansion strategy in order to develop a potential global client base and achieve significant market share growth. Zara has a strong global presence. The brand implemented a unique operation management strategy in the business processes which is totally different than other retailers selling similar types of apparels. Zara is known as a vertically integrated retailer. The organization has high control on each and every step in supply chain, manufacturing, designing and distribution of the products. The company has set up its own production factory in major areas around the globe (Jones and Robinson, 2012, p.29). It helped the organization to control each and every business operation process individually. Effective integration and close look at each and every business process help the organization to maintain a strong control on production and distributions. It is discussed earlier that the organization adopted different o peration strategy in business process unlike to the similar retailers or organizations. Zara adopted just-in-time approach in the business model in order to enhance the supply chain, inventory management, and logistics management and distribution management process. The manufacturing units are located in several parts in the world. It is true that the warehouses of Zara are located in Spain. 50 % of products are manufactured in Spain. The rest of the products are manufactured throughout the world. It is a significant example of effective operation process (Slack, Chambers and Johnston, 2010, p.97). It is true that, several leading organizations used to outsource products and services from the parent country. It increases the outsourcing cost and supply chain cost. Glocal manufacturing and distribution process helped Zara to cut down the outsourcing cost. Now-a-days, Zara is significantly trying to expand its business practices due to favourable external environmental factors. In add ition to this, strong global brand name is influencing Zara to implement global expansion strategy. Manufacturing factories in different places and strong vertical integration in business model are helping Zara to adopt and implement global expansion strategy quite successfully. Question 2 Zara, being one of the leading global apparel retain chain is facing several operation management issues in its global expansion strategy. It is discussed earlier that the organization adopted vertical integration strategy in the business model. In addition to this, the organization implemented just-in-time approach in the supply chain and distribution management process. Zara believes in lowest inventor management. Zara never goes for mass production and huge inventory. According to the management of Inditex group, large inventory can affect the product quality and brand image of the organization (Johnston, Clark and Shulver, 2012, p.76). The percentage of annual sales of Zara is lower that other potential competitors due to this reason. In addition to this, Zara used to avoid developing inventories in its supply chain part from the resources and raw materials to the end users. The brand designs and manufactures almost 10,000 new models in every year and distributes it to all the retailers twice per week. This system actually increases the inventory management cost. The organization believes that large inventory and limited logistics activity can reduce the exclusivity of the products as the organization tries to provide quality and exclusive products to the target customers. The organization faced