#6 Shorter Supply Chain Leads to Higher Profit
Nov 4th, 2012 by Maggie Huang
The example we are given in class which talked about the supply chain is Zara. I am interested in it not because I am a girl and Zara is a popular clothing brand, but also it special business model.
Comparing to the other brand, it is differentiable by building the factory in Europe but not Asia. Many clothing manufacturing build their factory in Asia, especially China, since the resource and labor there are cheap. Lowering the cost equals increasing profit. While Zara does not follow the pattern. It does not care about decreasing the cost in this way. It shortens the supply chain, which means they cut the shipping time and can provide new apparels faster than any other firms. In the fashion industry, who becomes the first can gain more market share.
Zara does very well in limiting the supply chain. In my opinion, it also does very well in the marketing. According to the class which talks about brand positioning, I think Zara applies this technique to boost their sales. By limited the quota of the clothing and shelf lives, Zara creates a shortage and scarcity of their products. Customers then buy more of the products and visit the shop more often. They provide what customers needs faster. That is its point of different.