ZARA’S COMPETITIVE ADVANTAGE

This case flyer, which is based on the article1 from The Economic Times, discusses Spanish fashion

retailer Zara’s competitive advantage built on its deep-rooted innovative business model. Since

the time it was established in 1975, Zara had a philosophy of centralized design, manufacture

and distribution model. Though the company expanded globally, it never changed its centralized

model. Moreover, Zara’s business model could not be duplicated by its competitors. What

were the merits and demerits of a centralized business and supply chain model? Why could it

not be duplicated? How does Zara achieve a competitive advantage out of this model and

sustain it? What unique value proposition does Zara offer to its customers using a centralized

model? This case flyer is suitable to teach concepts in the courses of Business Strategy, Business

Model/Operating Model and Supply Chain Management. The case flyer also discusses Zara’s

expansion in China and debates whether Zara should localize or stay centralized.

Pedagogical Objectives

• To understand Zara’s innovative business model and supply chain

• To understand how Zara sustains its competitive advantage and consistently delivers value

to its target customers

• To debate on whether Zara should localize or continue with its serving business and operating

model to maintain its unique identity

ABSTRACT

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1 Susan Berfield and Manuel Baigorri, “Chain Reaction: Zara’s Fast Fashion Faces Beijing Test”, The Economic Times,November 18th 2013