Page 192 - Aamir Rehman - Dubai & Co Global Strategies for Doing Business in the Gulf States-McGraw-Hill (2007)

176 Dubai & Co.

everywhere, of course, like new clothes. The reason this matters
more in the GCC countries is that teenage girls compose a larger
portion of the total market than they do elsewhere. Lightweight
fabrics fit the global style of some firms—H&M, for example—more
than they do of others. And while most retailers will have some
long skirts and long-sleeve shirts, these items will often use designs
targeting older women (as older women are the ones who dress
more conservatively in most other markets) and will likely make up
a relatively small proportion of the total clothing line.
One retailer whose global capabilities and regional savvy have
enabled it to execute an adapt-the-portfolio strategy with great
success is the Spanish retailer Zara. Its competencies gel with the
tastes of the Gulf region, and its local management has apparently
understood the opportunity well.

Zara: Fashion That Fits

Zara, the Spanish retailer, is a success story now sweeping the fash-
ion industry. The firm, known by consumers for its trendy fashion
at reasonable prices, now has more than 650 stores and has reached
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more than four dozen countries. Zara has become a prominent
global brand and is, in some ways, Spain’s global ambassador of
style. It also turns out that the attributes that drive Zara’s global
success are a very strong fit with the booming GCC market.
Zara’s unique operating model has been summarized by
Harvard Business School researchers as “new products in small
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quantities,” and the company’s ability to execute this model has
been widely seen as its core competitive advantage. Zara has a team
of 200 designers working on the premises of the production facility,
helping churn out new fashions at a remarkable rate. These design-
ers are typically women in their 20s, exactly the same demographic
as Zara’s target audience worldwide and in the Gulf. The mandate
of the design team is to innovate . . . and to do it fast. According to
the Harvard researchers, Zara’s designers mock up 40,000 new
designs each year, of which 10,000 are actually produced. These are
produced in small quantities, allowing for greater experimentation
at lower risk.
The needs of the GCC market fall squarely within Zara’s skill
set. The GCC market seeks new and trendy items, and that’s what