Zara – Sustainable Competitive Advantage Using The ‘RBV’ Approach

Zara – Sustainable competitive advantage using the ‘RBV’ approach.

Zara has a strong distribution network management enable to deliver its products within 24 hours to European stores. The shipments also delivered twice a week to each store via third party delivery services (Z,12). Despite the fact, that H&M also has a competitive distribution experience, the lead times for goods was significantly longer than Zara’s (Z,5). Its concentration on a dual-shift basis and featured mobile tracking system helped to effectively control the distribution centre and ensure short time supply (Z,11). The successful implementation of IT systems, including mobile tracking allows to use technology benefit to effectively monitor shipments and orders in distribution channels. This ensures information infrastructure when the retailer can quickly and cost-effectively provide product information for all departments (Ling, 2001). This can be argued as it is an effective way to prevent a failure which can destroy expensive shipments or infrastructure which also influence delivery time (Giaglis, 2003). However, the continuously changing technology requires a big investment and knowledge in order to successfully integrate the advanced system practices. This can include failures within processes that initiate the communication and functionality testing as the successful adoption requires a higher level of knowledge integration. Due to high costs, the technology system incompatibility is often associated with major causes of distribution network disruption (Cavusgil, 2006). On the other hand, the dual-shift basis requires advanced distribution planning which mainly concentrated on supply chain technology and social network effectiveness. This complies with the effective uncertainty management that affect distribution costs and efforts (Standtler, 2005). Therefore, Zara is focused to invest in its advanced IT and tracking system for long-term and so maintain a higher level of knowledge and the centralized logistics model success. For example, the mobile tracking system is capable to handle 45000 folded garments per hour, that automatically can quickly consider sales level and organize the deliveries (Z, 11). Although, this can be argued that the system can be copied, it takes longer time for the effective integration and efforts. Especially when Zara is already advanced and continuously investing for the systems’ improvements, the competitors can face challenges to achieve the same level of knowledge and speed. This can automatically create a value which is difficult to substitute as Zara is also adopted this with the centralized logistics model that can be difficult to adopt this with the different logistics model.