CodeWithKriti

📚 Introduction

In a world full of uncertainties, even global retail giants like Zara (Inditex) are not immune to geopolitical disruptions.
This blog explores a fascinating real-world case study:
👉 How Zara can respond strategically to a supply chain disruption caused by rising tensions between India and Bangladesh.

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🔍 The Disruption in Focus

In 2025, escalating diplomatic tensions led India to impose:

⚡ A 200% tariff on all textile materials exported to Bangladesh.

🚧 A 30-day quarantine and inspection period for finished goods moving from Bangladesh through India.

This threatens Zara’s business because:

15% of Zara’s global clothing comes from Bangladesh.

60% of Bangladeshi fabric and yarn depends on Indian suppliers.

👉 In total, about 9% of Zara’s worldwide garment volume is immediately at risk.

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📊 Quantifying the Impact

📉 Zara could face up to $1.05 billion loss in trade value between Bangladesh and India.

⚠️ About 30 million kilograms of materials could go missing from the supply chain, causing stock-outs in key markets (US & Europe).


🔧 Visual Data Insight:
Graphical analysis shows a sharp decline in forecasted export value, pushing Zara toward the lower confidence bound.


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✅ Short-Term Strategies (0–6 Months)

1. 🚚 Switch to Türkiye for Critical SKUs

Labor cost: $4,403 per employee (reasonable compared to losses).

Proximity to Europe reduces lead time to 1–3 days by road.

Turkey already has a robust textile sector and reliable infrastructure (LPI 3.4).



2. ✈️ Use Air Freight for Urgent Items

Best for bestsellers and seasonal products where stock-outs would severely impact sales.

Though expensive, it keeps Zara’s fast fashion promise alive.

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⏳ Long-Term Strategies (6–24 Months)

1. 🌐 Embrace Digital Forecasting Tools

Use AI and predictive analytics to anticipate tariff changes and bottlenecks.

Integrate LPI scores and trade data for smarter sourcing decisions.



2. 🏗️ Diversify Sourcing Network
Recommended Countries:

🇻🇳 Vietnam: Strong infrastructure (LPI 3.3), fast customs, and reliable supply chain.

🇮🇩 Indonesia: Scalable and cost-effective alternative.

🇰🇭 Cambodia: Secondary supplier with strong trade volume and cost advantages.

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🌍 Strategic Thinking in a VUCA World

Volatility – Buffer stock, emergency logistics contracts
Uncertainty– Track monthly trade flows to detect early disruptions
Complexity– Multiple sourcing countries to reduce chokepoints
Ambiguity– Trial new suppliers gradually before full adoption

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✍️ My Personal Reflection

Working on this case study taught me the real power of combining data-driven analysis with strategic decision-making.
🌱 Even small decisions—like shifting sourcing from India to Vietnam—can make Zara resilient in unpredictable times.
It showed me how important it is to stay curious, analytical, and adaptable in business.


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🚀 Conclusion

Zara’s supply chain disruption is a perfect example of how data insights and strategic thinking work together to solve real-world problems.
👉 The key takeaway:
In a volatile and complex world, the ability to adapt, forecast intelligently, and diversify supply chains is the real competitive advantage.