Zara case

Zara is the largest division and the most profitable brand of the Spanish retail Group Intidex.
Zara's business model is based on the quick respond to the fast-growing fashion trends supported by the company's flat organizational structure and "rapid fire" supply-chain.
In comparison with its competitors, such as Benetton, Gap or H&M, who outsource their production in cheap Asian countries, Zara rarely uses outsourcing and maintains about 80% of its production in European countries, which is on the one hand more expensive, but on the other hand helps to keep control over design and operational processes. Zara has hired about 300 young designers, who provide quick decisions.
What is remarkable, Zara spends only 0,3% of its revenue on media advertising in comparison with 3-4% of its competitors. Nevertheless, Zara operates 5,618 stores in 85 countries and continues to expand.
Zara's fast-fashion business model has a great potential to grow. On the one hand, it has shown that supply chain management can provide sustainable competitive advantage and, on the other hand, reduce inventories and operating expenses.
In order to expand further Zara should use online channel distribution and sell its products online. This will provide Zara with more sales, because customers can buy Zara's goods even if there is no Zara fashion store in their city.