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How Can Systems Concepts and the Notion of Contingency Thinking Explain the Success of Some of Zara’s Distinctive Practices?

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Within a few days, hundreds of European women were searching out the same look. Welcome to fast fashion, a trend that sees clothing retailers frequently pur-chasing small quantities of merchandise to stay on top of emerging trends. In this world of “hot today, gauche tomorrow,” no company does fast fashion better than Zara International. Shoppers in 77 countries are fans of Zara’s knack for bringing the latest styles from sketchbook to clothing rack at lightning speed and reasonable prices. Because style-savvy customers expect shorter and shorter delays from runway to store, Zara International employs a creative team of 200 professionals to help it keep up with the latest fashions. It takes just two weeks for the company to update existing garments and get them into its stores; new pieces hit the market twice a week. Defying the recession with its cheap-and-chic Zara clothing chain, Zara’s parent company Inditex posted strong sales gains, Low prices and a rapid response to fashion trends are enabling it to challenge Gap Inc. for top ranking among global clothing ven-dors. The improved results highlight how Zara’s formula continues to work even in the economic downturn. The chain special-izes in lightning-quick turnarounds of the latest designer trends at prices tailored to the young-about $27 an item. Louis Vuit-ton fashion director Daniel Piette described Zara as “possibly the most innovative and devastating retailer in the world.” Inditex Group shortens the time from order to arrival by a complex system of just-in-time production and inventory reporting that keeps Zara ahead. Their distribution centers can have items in European stores within 24 hours of receiving and order, and in American and Asian stores in under 48 hours. “They’re a fantastic case study in terms of how they man-age to get product to their stores so quick,” said Stacey Cartwright, CEO of burberry Group PLC. “We are mindful of their techniques.” Inditex’s history in fabrics manufacturing made it good business sense to internalize as many points in the supply chain as possible. Design, production, distribution, and retail sales are all controlled by Inditex to optimize the flow of goods, without having to share profits with wholesalers or intermediary partners. Customers win by having access to new fashions while they’re still fresh off the runway. During a Madonna concert tour in Spain, Zara’s quick turnaround let young fans at the last show wear Madonna’s outfit from the first one.

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