1 Universidad Americana Facultad de Ciencias Económicas y Administrativas Maestría en Administración de Empresas Segundo Semestre del 2008 Parte 09: Integrando Cadenas de Oferta y Marketing Globales Asunción, Noviembre de 2008
2 Nuestro Caso de estudio número seis: Zara Nos servirá para: Entender el proceso de Arbitraje Global de Talentos Comprender cómo se puede utilizar dicho arbitraje para la adopción de posiciones de liderazgo
3 Breve Cronología Amancio Ortega starts a factory of women s dressing gowns Confecciones Goa is constituted as a Factory to supply wholesalers Zara, the flagship of the Inditex Group is created 80s.-Spanish Development 90s.-Internationalization 00s.-Sustained Growth and Development
4 Internacionalización de Inditext
5 Presencia en la web: Hosting, Dominios y Diseño Desempeño comparativo
6 Presencia en la web: Hosting, Dominios y Diseño Elementos clave de su margen operativo
7 Ventajas Competitivas de Zara 1. Centrally Managed Inventory: Controlled and timely delivery of clothing to all stores across the world 2. Reduced design cycle time: Timely response to items that sell well, ability to quickly alter/enter with new designs 3. Strong IT system: Allows almost immediate communication of sales and inventory information across enterprise 4. Logistics/Distribution: Clothes move within hours to their destination, efficient scheduling of shipments
8 Ventajas Competitivas de Zara 1. The new business concept and marketing of Fashionable but reasonable & convenient. 2. Very sophisticated supply-chain system based on their IT system, which enable them to manage very quick lead time, reducing inventory risk, and keeping up with updated fashion, and keeping up with real market trend/needs. 3. Very sophisticated retail management system (its skill and knowhow) based on their IT system. 4. Very well organized centralized design & product development system, by mixing Push-marketing and Pull-marketing. 5. We feel that their business concept (brand concept), retail management system and design & product development system are scalable, given Zara s sophisticated communication and data gathering and analysis system.
9 Presencia en la web: Hosting, Dominios y Diseño Modelo de Negocios de Zara
10 Rivalry Presencia en la web: Hosting, Dominios y Diseño El diamante de Zara Factor Conditions Demand Conditions Related and Supporting Industries
11 El diamante de Zara 1. Inditex/Zara at the time of the case bears many similarities to the CEMEX expansion into Spain. 2. The business environment of Spain/Western Europe presented to Zara was asymmetric in that it possessed many of the positives of basing operations in a developing world, while simultaneously insulated from many of the negatives. 3. Regarding the so-called Spanish Diamond, Zara benefited from very positive factor conditions (inexpensive labor, numerous and experienced apparel workshops nearby, etc). 4. Spain also clearly presented a geographic advantage by having a close proximity to sophisticated markets (France, Italy), and even exhibited a dynamic local market, evidenced by an emergent national fashion market
12 Presencia en la web: Hosting, Dominios y Diseño Las tres A de Zara
13 Qué podría salir mal? 1. Another firm might match speed (aggregation) with lower cost (arbitrage) 2. Complexity of multiple lines, multiple regions 3. Might not master real estate in new regions
14 Preguntas para Zara 1. How well does Zara perform compared to its competitors? 2. What are the sources of Zara s competitive advantage? 3. Which of these result from the Spanish diamond? 4. How well do the various elements of Zara s business model travel globally? 5. Why might Zara fail? 6. What are the best ways to grow the Zara chain? 7. What are your top 3 recommendations to Inditex CEO Jose Maria Castellano re the internationalization of Zara?
16 Cómo crecer? 1.Try to implant their supply chain system in Asia (basically in China) and America (basically in Mexico and Caribbean countries), and try to have 3 strategic production points for their global distribution, and try to use those production points for their basic items/products manufacturing for each market, Asia and America.(Let s say, 30-40% from current Spain manufacturing, the rest from localized manufacturing for basic/standardized items). 2.Try to accelerate their brand portfolio strategy and promote other brands as well at the same time. (Don t concentrate into Zara only) 3.Try to enhance their sophisticated design and product development system (as a super copy (knock-off) machine!!). In order to do so, they should keep sending design staff to all important lead market and necessary trade shows, Milan, Paris, London, Tokyo and NY, and also maintain the communication system between design staff and each shops even in all over the world.
17 La prueba RATs para Zara 1. How far do these models/advantages travel without a local distribution hub? 2. How far do they travel without local production hub? 3. How replicable is whole system? 4. Which lines travel best?
18 La prueba RATs para Zara 1. Relevance. Zara s value proposition of high velocity fashion appeals to a global audience that is fashion conscious and discerning in price. However, it s relevance depends on the relative wealth of different countries, as well as the fashion culture. For example, the target class in Spain is 80% of the population while only the upper and middle class in Mexico can afford Zara. 2. Transferability. Zara has adopted several innovations that facilitate its transferability. These include:1.standardized store implementation this enables Zara to maintain its global image and store quality and quickly allows new store managers to focus on activities that drive store sales.2.individual inventory response each stores inventory is uniquely driven by the store clientele, thereby enabling each new store to maximize its value to its local target clientele. 3. Appropriability. Zara s power is not easily duplicated as they control a significant portion of the value chain. Even through Zara adopted alternative market entry modes such as joint ventures or franchises, the dependency on Zara s centralized system ensures that Zara can appropriate the most significant portion of available rents from their markets.
19 A dónde crecer, y cómo? Zara should consider replicating important elements of their regional platform and supply chain structure in North American and Asia if they are serious about becoming more than a niche player in those markets. Over and above tariff and logistical costs (which add roughly 25% to their FOB prices in the USA), Zara needs to become more attuned to fashion preferences and demand conditions in these regions as it is questionable whether cherry picking from their current collection will be as successful in non- European markets. This would imply that regional design capabilities would need to be developed as well as relationships with local suppliers and workshops for final stitching to decrease costs. Finally, in the generally more price sensitive North American and Asian markets, it is unlikely that the current strategy of leveraging the comparatively low cost of Spain to charge a premium in other European markets to support expansion will be transferable.
20 A dónde crecer, y cómo? The game changing plan for successful internationalization starts with top management jettisoning underperforming/under optimized brands from Inditex. Second, management must aggressively search for a site for a second distribution center on another continent. Recognizing this is no easy feat, significant resources should be dedicated to not only finding a suitable competitive second home base, but also a potential acquisition target conversant in local laws, customs, etc. This go big or go home strategy of seeking another likeminded, but locally knowledgeable firm is critical for the Zara style model to be successful in geographic locations far away from Northern Spain
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