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Case Analysis Of Zara Case Study Usa

Decent Essays
USA

Problematic situation:

While making an attempt to enter USA in the year 1989 there were numerous issues that Zara faced to survive this peculiarly complex market. Major problems were as follows:
- Vanity Sizing: Men and Women is USA require plus size clothes to fit in. whereas since Zara was following a SRC would not label clothes with higher size.
- Customer psyche: Customers in USA prefer big, roomier clothes whereas Zara produce slim fit, trendy cuts clothes. Also, rural American’s are not very fashion forward unlike rural Europeans.
- Geographic Criteria – USA is a country of 50 states, in order to penetrate such a huge, market the company will have to launch multiple stores which is very difficult for Zara to maintain both in terms of cost and supply chain management as a result it started with just 1 store in New York city.
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This trend also lead to downfall of many brands and was very difficult for Zara to follow the trend.

Major issues:
Out of all the issues mentioned above vanity sizing and customer psyche were the most difficult to manage. Since Zara was not sure whether the customer would make repeat purchases or will ever become loyal to the brand. Also, the customer demanded completely different product than the company’s USP (trendy slim fit product) hence to create the demand of their existing product Zara would have to create a buzz through aggressive marketing campaigns – this is not in accordance with Zara’s policy. The other option is to expand product lines and categories which again is very expensive to do.
Strategy Adopted:

To compete and win over all the challenges mentioned above Zara adopted a wonderful strategy of internationalization. The company made a logical tradeoff between negotiable and non-negotiable decisions for the betterment of
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