The term “fast-fashion” has come to revolutionize the world of fashion; this business model has created frenzy among competing retailers attempting to capture market share in this ruthless industry. Ezra is the clothing and accessories retailer seated atop the industry; Ezra is the flagship specialty chain of Spain-based conglomerate Inedited consisting of 1495 stores.
Based in Rattler, Galatia, and founded In 1975 by Monoclonal Ortega and Rosalie Mere, Ezra maintains a competitive advantage through its “fast-fashion” business model; they’re able to take a product room concept through design, manufacturing, and retail store placement in a span of two weeks, while for their competitors the same feat takes months. Each year Ezra is able to produce 1 1 000 new items on average while the main competition (H and the Gap) 2000 to 4000. Ezra is able to launch an enormous quantity of merchandise in short time constraints because they are a vertically integrated retailer.
They have their own factory in La Corona which allows Ezra to control the majority of the supply-chain domestically from designing, to manufacturing, to production and distribution to stores worldwide. Situational Analysis There are many factors influencing the expansion decision. Retail fashion is an extremely competitive industry with many players, most of whom are established brand names with a national presence and high advertising budgets to make sure consumers are aware of them. Sara’s policy Is to do as little advertising as possible.
But this will Limit the rate of expansion, or Limit the growth In sales volume at the new stores as word of mouth spreads.
Sara’s main competitive advantage is its lean just in time delivery system that allows their stores to have the newest and hottest fashions on their shelves before their competitors. This system can work, but it will limit how quickly the company will expand in a market the size of the united States. SOOT Analysis Ezra stores receive new merchandise two to three times each week, whereas most clothing retailers get shipments on a seasonal basis, four to six times a year.
Ezra utilizes a vertically integrated business model where they own different levels of the supply chain (design to manufacturing to warehouse/distribution to retail). In a typical year, Ezra launches about 11 000 new items, a huge difference from the 2000 to 4000 items introduced by main competitors H and the GAP.
The scarcity of Sara’s merchandise allows selling stock at full price, eliminating the need for markdowns and maximizing profits. Production is completed domestically (Spain & Portugal) providing further flexibility to answer the consumer’s demands for new merchandise quicker than the competition.
Weaknesses Ezra produces items in smaller batches for stores; when items sell out, they are not restocked with another shipment thus creating problems for unfortunate consumers. A single distribution location leads to discomposes of scale, meaning advantage from producing a large quantity of goods at a discounted rate is negated. Expansion into foreign countries/continents generates higher cost across the board (R, transportation, manufacturing and production. Ezra doesn’t places little emphasis on advertising O – .
% compared to their competitors 3 – 4%. Opportunities Instead of solely using brick-and-mortar stores to sell merchandise, Ezra should also use the internet as a source of advertisement, brand building, the selling of products. Entry into the fast-growing Indian market, where premium brands are highly valued. Further expansion into the U. S. Market before American retailers overhaul their cuisines models while Sara’s vertically integrated, fast fashion business model maintains the advantage.
Threats Indies’s other stores present a threat as well in the form of cannibalism. Cannibalism occurs when a corporation’s multiple entities compete for the same market share. This can also occur by the same company; if Zara opens too many stores close in proximity to each other, they take away from each other’s profits Competitors such as the Gap and H&M have been quick to “internationalist” their operations offering similar merchandise groupings as Zara pose an immediate threat for existing and future industry market share.