Zara versus Mango: Supply Chain Analysis

How is Mango’s supply chain different from Zara’s?

It’s actually very similar. There are scale differences. Mango is a very big company, so they work with big suppliers and they have big orders. Zara is just a different scale. It’s much larger scale. Zara needs a larger supplier base than Mango. Another big difference between Zara and Mango is the decision-making process, in terms of going ahead with a collection, versus not going ahead. In Mango, it’s much more centralised, so that takes a little bit more time than it takes in Zara, where it is a lot more decentralised and decisions are made faster.

Does that mean that Zara is much quicker to market, due to the decision-making process?

Yes, it definitely is. To give you an example, it’s not unusual, in fact it’s fairly common for Zara buyers to go and instruct a supplier in, let’s say, Turkey and there and then, just issue the PO (Purchase Order), for whatever they see that they want to go ahead with. In Mango, that would never happen. The product would go back to the central office, where the decision would then be taken as to whether to go ahead with the product or not. Typically, it’s at least a week’s difference. In terms of sales, a week is a lot, when you arrive in the shop with the first product.

How do you think Mango can compete with Zara?

Product is one way they do it. Every brand, in the case of Mango and Zara, particularly Mango, they have their own brand identities, so they have their own customer base. Quality is another way that you can try and compete. Unfortunately, right now, that’s not being very successful for Mango, in the sense that, in terms of their quality, they are still probably at the same level, or maybe just trailing slightly behind Zara. It’s tough to compete with such a bit retailer as Zara, because they do everything so well. It’s very difficult to pick a winning strategy against them.

What you want to try to do, is take as much of the market as possible and, I would say, product design is probably one of the things you need to do. Right now, what Mango is doing particularly well is alliances with big online retailers, which is actually the area of business which is expanded fastest for them. That’s an area where Zara is being a bit slower, because they are concentrating more on their own e-commerce site, as opposed to other e-commerce sites.

Why is Mango’s quality lagging behind Zara’s?