Zara Strategic Analysis

Zara positioned its brand on the fashion-conscious market and offered fresh assortments of designer-style clothes and accessories with relatively low prices. Zara had a cost advantage over other competitors due to its low advertising costs. Zara spent only 0.3% of revenue on the media advertising, compared with other retailers. Zara promoted its brand by offering rapid changing product lines and creating customers’ positive word of mouth that resulted. In addition, to target at the ages between 18 and 34 with middle to middle-high income, Zara mainly relied on its attractive stores which located in highly visible locations to project its image. Zara’s frequent refurbishing of store, creative window display and varied staff uniforms also allowed Zara to position its image in the elegant, high-end and fashion-driven market. However, Zara implemented a different positioning strategy for Zara overseas. In contrast to Spain, where all of Zara’s stores were company-owned, Zara used three different methods to enter into the international markets: company-owned stores for high-profile countries, joint ventures for important countries where there were barriers to direct entry, and franchises for small countries. This helped Zara reduce operational risks and gained a detailed insight into local demand. Although pricing was market-based, prices in other countries were higher than in Spain, for example, 70% higher in Americas and 100% higher in Japan. The higher retail prices

The business idea of Zara is to link customer demand to manufacturing, and to link manufacturing to distribution. And based on this general idea, Zara has several essential elements for its business model. First, speed and decision making, which means that in the external level, Zara need to respond very quickly to demands of target customers, and always keep in style. While for the inside, Zara treasure intelligence and judgment of common employees who enjoy a great deal of autonomy. Second, its marketing, merchandising and advertising strategy. Zara does not spend on virtually advertising, while it spends heavily on stores, and no selling online because of

Zara International has gained huge success by following the classical management approach and the behavioral management approach. Inditex has used a distinctive business strategy in their production and inventory control. Even in the competitive trends in apparel industry, Zara will survive in the competition if it continues to do business according to the clients’ needs and wants.

Zara is an apparel company and the leader brand of the Spanish retail mogul, Inditex. zara was established in 1975 in Spain by Amancio Ortega who is currently the 3rd richest man in the world, the first store was opened as an outlet but by 1979 the establishment already had six stores at different locations in Spain and by 1985 the company branched out to Portugal new york city and Paris. Today Zara has over 1900 stores worldwide which are located in 22 different countries; these stores render employment to over 125,000 employees. Zara depends on information they gather from customer and organizational feedback from all their stores on a daily basis this information is then forwarded to the supply chain, which works in synergy with the stores to keep the level of storage in stores down to a minimum. Zara owns the production, supply chain and in-house production, which lead to greater speed in output (M.A.Cano)

Zara is a clothing company that was founded in 1975 and came from Spain. Its under Inditex group which owns other brands such as Massimo Dutti, Pull & Bear, Oysho, Uterques and many more companies. Zara grew very fast and currently in 2012 has 1,617 stores worldwide. With a large name in the fashion industry, besides that, Zara faces tough competition internationally including H&M, Benetton, and GAP. In order to keep up with the speed chic, Zara need to keep up also with the information system to run their business.

Zara has used numerous innovative strategies to achieve global expansion making it top in the moneymaking brands. Its origin has also played a major role as nearly half of its market is from retail stores within Spain and France. In addition to its success strategies, Zara uses swift response and short time limit to offer a vast clothes choice at realistic prices in its business model. To maintain its position in the international market, it always provides new products in fashion consistently. This consequently enhances its capacity to predict the markets’ need.

In 1988, Zara opened its first abroad store in Portugal. The geographic and cultural proximity of the two countries facilitate the business. Later on, more stores were opened regardless of the geographic or cultural distance as the business grew bigger. While there were some areas or countries difficult to enter. For instance, Saudi Arabia, Andorra or Malaysia, countries predicted with small markets and low sales or great culturally distant, Zara franchised as their own subsidiaries regarding the product, store location, interior design, logistic and human resources (Flavian, 2000).

Zara is known for one of the smartest company to sustain a breakthrough marketing strategies and efforts. They have been successful in the fashion industry for over many years and now a day, still continue to earn more accomplishment to become the “Spanish successful story”.

To expand globally, Zara should focus on one country at a time. Our team concludes that United States should be Zara’s current focus on international expansion. United States is an open trade market with well formed trade regulations. This provides a safer business environment as compared to Asia countries. During the globalization process, Zara should maintain short lead time, quick inventory turnover, leading fashion brand and low advertising cost as its competitive advantage. Regional distribution center, vertical integration, outsourcing, eye-catching window displays are the key elements for Zara to continue to re-invent and innovate themselves to stay fresh in the apparel industry. Below you may find the implementation details for United States region:

Zara has differentiated from its competitors by producing low-cost designs, which can be produced and distributed to stores in a very short turnaround time. Zara´s IT strategy is to use minimal cost equipment without the need for substantial amount of information systems support. Zara´s IT internal department consists in 50 people, almost from Galicia and local universities, with a very low turnover rate and located in La Coruña. They are responsible for developing the applications for Zara´s unique business. All Zara´s IT operations are centralized from the headquarters.

Zara brand is an attractive case study for many fashion brands around the world for understanding Zara’s business model and their wining factors. One of the Zara’s strategies that make difference between Zara and other competitors is policy of zero advertising. The company tries to invest their capital in opening new branches. As result of this policy Zara is known as fashion imitator trade group and low price fashion products. The range of Zara’s products is wide such as: men\women’s clothing, Zara kids, and shoes, lower and upper garment in various sizes. Designing of Zara’s products are made 50% in Spain, 24% in African and Asian and 26% in the rest of

Zara is a Spanish brand of clothing founded by the visionary Amancio Ortega Gaona and Rosalia Mera in Artexio, Galicia. Zara was founded in the year 1975. It is one of the major selling brands of one of the biggest fashion retailer "INDITEX". Zara is now available in 86 countries with total of 1,763 stores worldwide.

Today’s fashion market is highly competitive and companies need to always be up to date. Zara has many competitors such as H&M, Mango and Gap. The successful concept of “Fast fashion” has created many retail stores to change their retail strategy but have not yet to compete with Zara system.

Zara employs one of the greatest and most successful operations strategy in the retail industry is the strategy employed by Zara. Zara being the flagship brand of a Spanish fashion retail giant, Inditex, (Industrias de Deseno Texti S.A.), was founded in 1975 and is engaged in designing textiles, manufacturing and distribution (Dutta. D, 2002). Zara started as a single shop in La Coruna but rapidly expanded to 68 countries. The company primarily operates in the Europe zone, where about 80% of its sales are made with LaCoruna, which is still home of its central offices. Its stores are opened each day and known as one of the fastest growing fashion retailers in Europe. Zara’s entire business operations, designing, sourcing, manufacturing, distribution process and retailing, it gained a couple of successful factors that include: a

Until now, every garment that is product in Zara’s factories around the world has to travel back to Spain in order to go through quality controls, and is then send to its distributors. But the continuous flows of goods from all the productions sites to Spain and from Spain to the markets of sell, as well as the relative communication flows necessary to such a business model will inevitably slow down as Zara will have to deal with a constantly growing number of customers. Thus, the highly centralized information system of Zara seems not to be easily applicable in Asia, in addition to being time and money consuming.