Recommendations

Specific problems for ZARA are the locations of their production plants as well as their distribution methods. Currently, stores that are located outside of the European market require extensive shipping routes which generate high shipping expenses. This is due to Zara’s manufacturing and logistics hub being located in Spain, while they must ship their products to locations in China, Japan, and the United States. These long distance destinations require shipments by plane which greatly increase expenses.

ZARA should consider localizing production by developing production plants in the foreign markets to which they distribute their products. This would drastically cut down on the need for the use of planes to deliver their products, which would ultimately reduce transportation costs. ZARA is also known for holding very little inventory, as the company is constantly sending shipments to its stores in an attempt to quickly update its products. By localizing their production, ZARA would cut down on shipment times ultimately decreasing concerns regarding delays on shipments, as well as increase its ability to stay up to date with the latest fashion trends