Zara Case Study

Answer the following questions in the template provided:

1.Describe Zaras current sourcing strategy. Explain how it is a competitive advantage for firms. What opportunities and challenges is Zara currently facing as it continues to grow?
2. List the all the types of materials (raw material, work-in-progress, or finished garment) identified in the case that are either procured from suppliers, made in house or partially subcontracted. As Zara continues to grow, apply the purchasing portfolio model to categorize the sourcing products into four types (leverage, routine, strategic, and bottleneck). Then provide a brief explanation for each material classification. HINT Material may not fall into all four categories. Based on the recommendation, material category may vary. Feel free to change materials based on the line of garment and/or the in-season production as discussed in the case.
3. Zara is currently considering outsourcing the clothing production to low-cost Asian countries, especially China. Use the total cost of ownership model to evaluate this decision. Consider associated costs such as hourly labor, transportation, tariffs, etc. for China, India, Portugal (closer to home), and Spain (local). HINT Hourly costs are given in Table 9-3, but not all costs are included. For others, perform an internet search to get the exact cost numbers or use relative measures. Please provide references for sources used.
4. For materials listed in Part 2 above, list the type of suppliers and describe the level of relationship that Zara should engage in with those suppliers.
5. In addition to cost, what other major qualitative factors identified in the case should Zara consider for a recommended sourcing strategy? Apply the weighted factor analysis to suppliers in China, India, Portugal, and Spain and offer a recommendation. Assume the appropriate weights for each factor, and provide a brief explanation of the selected weights. HINT Perform this analysis on a country level rather than an individual supplier level while considering typical characteristics of the supplier country rather than an individual supplier. For example, how quality is characterized with suppliers from China, as opposed to a particular suppliers quality.
6. To be successful and maintain its competitive advantage, how should Zara develop its supplier? What parameters/matrix Zara should use to evaluate its supplier?

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