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operations Management in Practice

ZARA EXCELS ON PRICE,SPEED, AND FLEXIBILTY

zara a retail chain of high-fashion boutique clothing stores has grown rapidly since Mancini Ortega opened his first store in Spain in 1975 Headquartered in northern Spain zara with more than 400 retail stores in 25 countries, now generates sales of more than U3$2 billion annually primarily in Europe but is now beginning to penetrate the US market The reasons for its success are attributed to-several factors including low prices speed of delivery and flexibility Merchandise is delivered to each zara retail location twice a week Merchandise is air freighted to its stores in the United States  This fast and almost contumelious replenishment concept reduces the need for significant in-store inventories and the possibility- of clothes going out of fashion A major factor in area’s ability to react quickly to changes in the customer buying behavior is its use of information and technology Salespeople in each retail location use handheld computers to record buyer preferences and trends  This information along with actual sales data are transmitted daily through the Internet to zara’s headquarters in Spain  In addition, unlike its major competitors, which outsource manufacturing zara produces most of its merchandise in its state-of-the-art factory in Spain Products are designed, produced and delivered to Its stores in as little as two weeks after they have appeared for the first time in a fashion show On contrast, competitors like the GAP and H&M require between live weeks and five months lead time to’ fill orders from its retail operands.)

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