Apart from the strengths and opportunities the company has other competencies which help in realizing a competitive advantage. The capabilities are assessed based on the attainability of the competitive advantage for the company for the long term. The four criteria used are value, rarity, imitability and organizational support (Barney, 1991, p.100). In Zara, there is value for resources and capabilities as the company has strategies that enable it to utilize the opportunities and take care of the threats.
The company ensures that they get value for all resources used at every stage by ensuring that they do rely so much on the third parties (Barney, 1991, p.102). In fashion, the design is very vital, and in Zara, this is internally managed. The warehousing and distribution are also done by the company staff to ensure that there is no shortage or delay of the product. Zara is an international brand; therefore, customer needs are an essential aspect of the company. They ensure that they carry out market research and identify the changes in the customer taste and implement them to ensure that their needs are optimally met.
The second criteria used is the rarity which means that the resource used by the company should be controlled by a few companies in the industry (Barney, 1991, p.104). Majority of the companies in the apparel industry are labor-intensive, but Zara emphasizes on capital intensive. Through this approach, the company can produce items and distribute them within a short duration of time. Within a maximum of three weeks, the company can produce about 11000 distinct items while the competitors are producing a maximum of 4000 products. This means that the resource is are and is controlled by the company.
This is another factor that determines the capability of a company which means that a firm without a resource may find it impossible or difficult to produce a similar product or develop it (Barney, 1991, p.106). In this era, imitability has become a common thing. However, even if you want to imitate a specific item sometimes, it may take a long time to produce a product with the same qualities successfully. Zara has an organizational structure that can only be imitated if the competitor spends a lot of time. The vertical integration model used by Zara and the vertical integration model is costly to copy. Even if the competitor has enough money to copy this already global established brand, they will already have made changes. This is because the company is known for implementing small changes frequently. There are always things that can be changed in the company to ensure that it has a competitive advantage.
For an Organization to have a competitive advantage, it should be organized in a manner that supports the exploitation of the valuable, rare and resources that are expensive to imitate (Barney, 1991, p.108). By implementing these strategies, Zara can increase sales and profits. The company’s top management is dedicated to the excellence of the company. The success can also be attributed to the employees involved in every stage. The managers of different sections have autonomy, and they work together with other managers such as Human Resources Managers to ensure that everything runs smoothly. Despite the power being in each section, Zara can coordinate the activities in all the departments. This is one of the strength that makes the company succeed in this industry where competition is stiff.
Barney, J., 1991. Firm resources and sustained competitive advantage. Journal of management, 17(1), pp.99-120.