You are on page 1of 1

INTRODUCTION

1. What is Zara?

2. The concept of a Company Value Chain

BENCHMARK
ZARA value chain

COMPARE
3. What is ZARA value chain?
1. H&M: Logistic System (System Development)
A. PRIMARY ACTIVITIES AND COSTS
In this latest report, H&M has problems with a logistics system which cost 34 million euros and caused a sales
Supply chain
drop of 8% in effect markets.
Operation https://www.cips.org/en-SG/supply-management/news/2018/october/problems-with-logistics-system-rollout-co
st-hm-34m/
Distribution
According to the report, H&M started increasing investment in its supply chain in the first half of 2017 which
Marketing and Sales
was dropped in its profits and behind its main rival Zara. They suppose the new logistics systems are an
Service
essential part of their work to make their supply chain faster, more flexible and more efficient, however, H&M
B. SUPPORT ACTIVITIES and COSTS has been accused of failing to act on low wages in its supply chain a workers in Bulgaria (where the new H&M
General administration store was opened lately) earned less than 10%.

Procurement 2. Zara: Logistics system (System Development)

Human Resource Management The just in time strategy is highly effective. Delivery of goods to the store within Europe is done within 24

Product research and Development hours using both trucks and shipments. While to the other American and Asian outlets are accomplish within 40
hours. This system increased a 15% cost of revenue in 2018 compared with 2017 (
https://www.essaytyping.com/zaras-supply-chain-logistics/)

Zara's supply chain compared to the


traditional industry’s supply chain

Technology

How much zara covered ?

COMPARE ZARA COST vs RIVALS


Product Research & Development

Strong R&D and designers.

Production: Zara : 11000 products/year >< H&M : 2000 products/year ; Inventory: Zara : 6 days >< H&M : 52 days

COMPARE

According to (https://www.cips.org/en-SG/supply-management/news/2018/february/hm-invest-in-technology-after-disappointing-results/) H&M had a disappointing year-end results even they had a quality in operating cost of
technology (in analytics and intelligence to improve its retail assortment planning, supply chain and sales including cloud computing, RFID, 3D printing..) about 20 million euros, the international and domestic sales both
decreased by 2% and gross profits was dropped by 5%.
=> Figures show that Zara's total sales have increased 50% in the last five years (until April 2017).
=> Advantage.

Technology