Zara Case Memo

1022 Words Jan 18th, 2008 5 Pages
To: Zara Management
From:
Subject: Zara 's US Expansion
Date: 2001
Background
Following is an analysis of Zara 's current expansion strategy into the US retail market and recommendations on future tactics to ensure a successful expansion. Zara 's expansion strategy thus far has been quite successful; however, with every new store opened, its ability to maintain an efficient centralized production system and a strong, unique culture will be diminished.
Analysis
Let us first consider Zara 's main competitive advantage before analyzing how current and potential future strategies will affect this competitive advantage. Zara currently employs a "design-on-demand" retail model allowing the company to bring the latest fashion trends from
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(See Appendix and above)
It is recommended that Zara maintain full ownership of new stores rather than choosing to franchise. This will ensure the continuation of the strong Zara culture.
Zara 's combination of cutting-edge fashions and culture lends itself well to a European-style, fashion-conscious consumer. While this type of consumer can be found in New York, this is not representative of the entire US market. Retailers in small towns and urban sprawls rely more on a shopping mall atmosphere. Adapting that strategy would undermine Zara 's image. It is therefore recommended that Zara target only major metropolitan areas which would likely have higher concentrations of fashion-minded individuals.
Zara currently employs no advertising at all. As word of mouth is very important in retail, this low key approach is in line with Zara 's culture. A well structured marketing campaign could, however, spread the word of Zara 's expansion across the US, while maintaining their mysterious boutique-type image. Billboards or print ads with a "teaser" approach could accomplish this goal. Advertising will become important to increase Zara 's profile during expansion. Due to its comfortable profit margins, a modest advertising budget could be afforded.
Zara 's US expansion will rely heavily upon continued emphasis on strong IT procedures both

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