Introduction Zaras business model can be broken down into three basic components: concept, capabilities, and value

drivers. Zaras fundamental concept is to maintain design, production, and distribution processes that will enable Zara to respond quickly to shifts in consumer demands this business model innovation served Zara well for an unusually long time, over 30 years now. 1. It is very difficult for the other retailers to work like Zara. Their model does not make sense for all retailers, only fast fashion retailers with an early adopting customer and a large/international store base. My point is, maybe it's not fair to say all business processes have a higher sustainable competitive advantage, but the true competitive advantage in Zara is attached to its fashion-forward customer base and product aligning strongly with their business process. Zara produces around 12,000 styles per year (compared to the retail average of 3,000), which means that fresh fashion trends reach the stores quickly. A typical Zaras customer visits the store 17 times a year compared to the average of 3 times per year. This high number of styles also means that the commercial teams have more chances to find a winning style. Zaras target market is young, price-conscious, and highly sensitive to the latest fashion trends. They have an advantage over traditional retailers because they do not define their target by segmenting ages and lifestyles giving them a much broader market. Contrast this with other retailers, where it takes three to five months to go from creation to deliveryand they're considered one of the best. Other retailers need an average of six months to design a new collection and then another three months to manufacture it. Zara has enjoyed great success simply because they have deliberately adopted business model innovation as opposed to product or process innovation, which most companies want to follow but is unfortunately easy for rival businesses to imitate as exemplified in the case of Apple and Pfizer. It's abundantly clear that innovation for the sake of innovation does not pay and that every business should have sustainable innovation strategy like Zara. Production is then increased or decreased in the flexible production facilities. Demand based production means there is very little inventory in Zaras supply chain, which results in much lower

working capital requirements. Profits from this clothing retailer come from blending math with its data-driven fashion sense. Inventory optimization models help the firm determine how many of which items in which sizes should be delivered to stores during twice-a-week shipments, ensuring stores are stocked with just what they need. 2 Zara is the ultimate embodiment of the fast fashion category in which the brand operates. Zara makes it possible for everyone (in the world) to buy the latest fashions at a price they can afford. Fashions change at breakneck speed, which means retailers have to keep pace with changing needs. Yet affordable production of large volumes of clothing has traditionally involved long delivery times. In this world Zara delivers on its brand promise by outperforming everyone else when it comes to precision, speed and small production volumes. In making this work it has disproved all of the dogmas and automatic assumptions in the fashion world. Zaras success is achieved by one of the most ingenious design, development, production and supply chains in the world. All Zara stores are supplied with a new batch of clothing twice a week. Delivery time is 24 hours within Europe and 36 hours to all other countries. A design idea has to be translated into a garment displayed in the store in a matter of just three weeks. As fashion connoisseurs know, this process takes other clothing manufacturers an average of six months. Whereas three months ago competitors were trying to work out what customers will want three months from now, Zara listens to what the customer wants now and supplies it in three weeks. Throughout this expansion Zara has remained focused on its core fashion philosophy that creativity and quality design together with a rapid response to market demands will yield profitable results. In order to realized these results Zara developed a business model that incorporated the following three goals for operations: develop a system the requires short lead times, decrease quantities produced to decrease inventory risk, and increase the number of available styles and/or choice. These goals helped to formulate a unique value proposition: to combine moderate prices with the ability to offer new clothing styles faster than its competitors. These three goals helped to shape Zaras current business model.

Capabilities of Zara, or the required resources needed to exploit the opportunities and execute this conceptual strategy, are numerous for Zara. Zara maintains tight control over their production processes keeping design and manufacturing in-house or with some strategic partnerships located nearby Headquarters. Currently, they have strategic agreements with local manufacturers that ensure timely delivery and service. Through these strategic partnerships and the benefits brought by this proximity of manufacturing and operational processes, Zara maintains the flexibility necessary to design and produce over 12000 new items annually. This capability allows Zara to achieve their strategy of expedited response to consumer demand. Conclusion Zaras business model is the consequence of the resolute implementation of the basic principle that you make what the customer asks for and overcome all seeming impossibilities in the process. There is some logic to the fact that this radical democratization of the supply chain by putting the customer in the driving seat was first introduced in the rapidly changing world of fashion, but there is no reason to assume that it is not relevant in other sectors.