Zara Operations Strategy Matrix - 2426 Words

The objective of this paper is to analyze and evaluate the operations strategy of Zara. To do this, it will be used the operation strategy matrix, that defines on the vertical side the performance objectives of the company and on the horizontal side the different areas in which decisions can be made. The intersection of both will show which the critical areas of Zara’s operations are. In order to reach a deep level of analysis, it is very important the task of defining both the performance objectives and the decision areas. These will be the first part of this paper. PERFORMANCE OBJECTIVES 1. QUALITY (***): The quality of its products is one of the reasons for Zara’s success. These are the main characteristics when talking about the†¦show more content†¦e. Design flexibility: new designs are made every week in accordance to the information received from the customer preferences and from the products performance in the stores. 5. COST (**): another key part of Zara’s business model is to maintain lower costs in order to offer affordable prices to their clients. This is achieved through different ways: a. Low inventory cost: stores have a reduced product stock, so they can maximise their selling area and spend less money in managing their inventory. It permits also to reduce the number of unsold items. b. Low production cost: they optimise the production process to reach economies of scale and maintain costs enough low to reach a profitable return with the standard of quality. c. Optimised distributions costs: d. Low promotional costs: Zara’s promotion and advertising budget is almost nonexistent, especially if we compare it compare it to their competitors’. DECISION AREAS 1. CAPACITY: the operational capacity of Zara can be measured according to these factors: a. 22 production factories b. Large designers staff: the around 100 designers makes it possible to introduce new models every week to respond to the market preferences. c. Location and size of the distribution centres: the main one in La Coruà ±a has enough capacity for current demand and they have plans of expand it. They also have other warehouses around the world to support the deliveries to this areas. d. CentralizedShow MoreRelatedZara Postponement Strategy1702 Words   |  7 Pagesï » ¿The case of Zara – The Postponement strategy I) Introduction In order to compete in the world of rising globalization and shortening of product life cycle nowadays, firms have to deal with the demand for increasing product variety to meet the diverse needs of customers. Mass customization has become a requirement for many businesses especially in the dynamic, fast-changing industries. 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