Question

Zara holds a competitive advantage over its rivals despite:

A. Refusing to implement technology in its operational model.

B. Keeping large portions of its production processes in-house.

C. Operating through fewer stores across the world than its closest rivals.

D. Its globally distributed contract manufacturing model.

E. Conducting business only through online storefronts.

Answer 1

Zara holds a competitive advantage due to its globally distributed contract manufacturing model, allowing for flexibility and cost reduction. They can quickly respond to fashion trends and reduce inventory risks.

Step-by-step explanation:

Zara holds a competitive advantage over its rivals despite operating through fewer stores across the world than its closest competitors. This is because Zara has a globally distributed contract manufacturing model. By outsourcing its production to different suppliers around the world, Zara can quickly respond to changing fashion trends, reduce costs, and maintain a high level of flexibility in its operations.

For example, if a particular fashion item becomes popular, Zara can quickly increase production by allocating more orders to its manufacturers in that region. This allows Zara to minimize inventory and reduce the risks associated with producing large quantities of items that may not be sold.

Furthermore, Zara's globally distributed model enables it to mitigate risks such as supply chain disruptions or changes in labor costs in one country by diversifying its suppliers across different regions.