Assess the extent to which Zara’s use of just in time (JIT) may have contributed to its success. - Edexcel - A-Level Business - Question 2 - 2019 - Paper 2

1. Encourages Frequent Purchases: By maintaining limited stock levels, Zara motivates customers to shop more frequently. Customers know that items may not be available the next time they visit, leading to increased foot traffic and sales.

2. Flexibility in Stock Management: JIT allows Zara to adapt its offerings based on real-time sales data, thus minimizing excess inventory costs and enhancing the freshness of its product lineup.

3. Quick Product Turnaround: Zara can introduce new designs rapidly, allowing them to react swiftly to fashion trends and consumer preferences, which is essential in the fast-changing fashion market.

While JIT has its advantages, it is important to consider potential downsides.

1. Risk of Stockouts: Limited stock may frustrate customers if their desired items are unavailable, potentially damaging Zara’s reputation.

2. Increased Costs: Frequent replenishment of small quantities might lead to higher logistical costs and inefficiencies, as larger orders could take advantage of economies of scale.

3. Dependence on Supplier Reliability: JIT relies on suppliers to deliver items promptly; any disruptions could adversely affect inventory levels and sales.

In conclusion, Zara’s use of JIT has significantly contributed to its success by fostering a responsive supply chain and encouraging consumer purchases. However, the company must balance these benefits with potential risks associated with stock levels and costs. Overall, while JIT is a critical factor in Zara’s strategy, other elements such as product design and effective marketing also play vital roles in the brand's success.