As completely as possible, sketch the supply chain for Zara from raw materials to consumer purchase.
Zara makes about 40% of their raw material (fabric). The remaining 60% is outsourced from within Spain, mostly from the La Curuna. Designing of clothes at Zara is done by creative teams of over 300 professionals at the headquarters in La Curuna, Spain. They act on the information fed to them from the stores managers.
The first stage in Zara’s production system is cutting of fabric. The design is then sent for sewing by one of several hundred local cooperatives. After sewing, the clothes are returned to Zara’s facilities for ironing by an assembly line of workers. After this, the clothing items are wrapped in plastic and transported on conveyor belts to a group of giant warehouses.
In the warehouse, the customised machines patterned after the equipment used by overnight parcel services, sorts, packs, labels, and allocates clothing items for shipment to Zara’s retail stores. For Zara’s retail stores within a 24-hour drive, goods are delivered by truck whereas goods meant for stores beyond 24-hour drive are delivered by cargo jets.
Zara sells to customers at their own retail stores, each managed by a retail manager who gives feedback on fashion trends to the design team.
1. Discuss the concepts of horizontal and vertical conflict as they relate to Zara. Channel conflict is generated when one channel member’s action prevent the channel from achieving its goals. It can stem from difference between channel members goals and objectives, from disagreements over the domain of responsibility and from difference in perception of the market place. Channel conflict can be vertical or horizontal.
Horizontal Conflict occurs among firms at the same level of the channel. Vertical Conflict, conflicts between different levels of the same channel, is even more common.
2. Which type of vertical marketing system does Zara employ? List all the benefits...
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