Zara Case Study

Which of the following best describes ZARA’s approach to sourcing and procurement?

• All raw materials are produced in-house to maintain quality control

• ZARA primarily sources raw materials from Europe and avoids outsourcing

• ZARA uses global suppliers and procurement offices in Barcelona and Hong Kong to manage sourcing.

• ZARA relies exclusively on local Spanish suppliers for raw material sourcing

What is one key benefit of ZARA's Just-In-Time (JIT) strategy?

• It reduces transportation costs by producing everything in Asia.

• It allows ZARA to commit 100% of its seasonal designs before the season starts.

• It minimizes lead times and enables mid-season production based on customer demand.

• It eliminates the need for any in-house production facilities.

How does ZARA create a sense of exclusivity in its stores?

• By offering large quantities of all items in all sizes.

• By running massive seasonal discount sales.

• By producing only classic, evergreen designs with long shelf life.

• By frequently refreshing inventory and limiting available stock per item.

Where are most of Zara’s key business decisions made?

• At each store.

• In La Coruña, Spain.

• In customer focus groups.

• By franchise owners.

Zara famously describes its core operating philosophy as “not fast fashion—it is…“

• Cost-efficient fashion.

• Accurate fashion.

• Trend-setting fashion.

• Sustainable fashion.

In Zara’s case, the term “proximity” (when referring to where it produces its time-sensitive fashion) means:

• Relying on low-cost labor markets.

• Producing geographically close to its busiest stores.

• Achieving extremely fast response times.

• Using only nearby raw-material sources.

Which of the following BEST explains why speed and flexibility are crucial for Zara's success?

• Zara's complex designs require extensive production time.

• Zara's target market prefers to buy clothes at discounted prices.

• Zara focuses on producing large quantities of a limited number of styles.

• Zara's business model relies on quickly responding to changing fashion trends and customer demand.

How does Zara's flexible production system help reduce risk?

• By producing large quantities of each item to ensure economies of scale.

• By focusing on classic styles that remain popular for longer periods.

• By making small batches of clothing and adjusting production based on real-time sales data, minimizing potential waste from unsold items.

• By relying on long lead times from overseas manufacturers to guarantee low labor costs.

According to your analysis, which element of Zara's business model is considered particularly useful to serve the dynamic markets in Asia?

• The lowest product prices in the market.

• The ability to respond quickly to fashion trends.

• Large-scale advertising campaigns.

• Manufacturing all products in Asia.

How does Zara's collection of information from stores in Asia help the company, according to your presentation?

• Reduces shipping costs to Asia.

• Speeds up production in Spain.

• Helps Zara better understand local preferences and needs in Asia.

• Makes recruiting easier in Asia.