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Zara's Disruptive Business Model

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Case Analysis Disruptive Business Models Markides (2006) explains that disruptive business models are strategies implemented in a company which enables it to outshine the competitors in an individual market. The disruptive model focuses on distorting the existing market and making the customers prefer the new business as opposed to the others (Magretta, 2012). Disruptive business models may include offering higher discounts, after sales services and premium products. Such a model is often sudden, and it takes over the entire market which sometimes leaves the other market players disoriented. During this time, such a company takes advantage by acquiring massive customer following and ultimately more profits. Understanding why a company may perform …show more content…

The company has a short time frame within which an idea is implemented. For instance, Zara designers may conceive a particular design that may seem fashionable at the current time and ensure that clothes are within the retail outlets within ten days. The speed of innovation and invention favors the versatile customers who love moving with the fashion trends. Zara, however, ensures that it releases few clothes to test the market thus saving the company on huge inventory costs that would lead from a dead stock. Notably, Zara has shied away from the top-down decision-making approach because the company understands that the employees are more inclined to understand the consumer trends. The retail brand has formed a close association with its employees thus ensuring that they also play an active part in decision making. In effect, the company has divided itself into different segments that enable the manufacturers to produce goods that move fast within the …show more content…

For instance, the company manufactures its clothing in high-end countries which evidently take up much capital and after that stocks high-end stall with them. Moreover, Zara’s clothes are usually 15% cheaper as opposed to the other brands which also leave them on the losing end (Hansen, 2012). Zara regularly opens new stalls in different cities globally further extending their presence. Gap, on the other hand, focuses on advertising and opening up many stores as Zara but it ends up consuming more costs instead of surpassing Zara’s profits. While gap focuses on filling up their store with clothes, Zara stocks few high-quality products which are never

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