...Fashion Industry Analysis From the Perspective of Business Model Dynamics Author: Lisa Gockeln University of Twente P.O. Box 217, 7500AE Enschede The Netherlands ABSTRACT The fashion industry is a dynamic and volatile place, continuously exposed to macro-environmental factors that trigger fashion business models to change. The fast fashion model is currently at the forefront of the apparel market casting questions on whether its underlying philosophy is about to change as well. Therefore, the purpose of this study is to identify external drivers that might lead to such dynamic changes in the fast fashion model. Moreover, it will be investigated whether these may allude to a possible convergence to the newly emerged slow fashion model which is currently trying to penetrate the fashion market. The international retailer Zara has served as fast fashion representative for this analysis and has been examined for business model adjustments, which might have been triggered by macroenvironmental factors. It was found that especially social, environmental and technological factors have influenced developments in the fast fashion model and that it has indeed adopted slow fashion principles in some of its building blocks to respond to such emerging trends. The future of the fashion industry appears to be tailored by such externalities, continuously reshaping the fast fashion model to eventually arrive at a version that brings a long-lasting competitive edge. However...
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...Zara 2 Porter’s Six Forces model in Zara 3 Existing competitors 4 The bargaining power of suppliers 4 The bargaining power of customers 4 Potential competitors 5 Alternative products or services 5 The power of cooperative dealer 6 IT is the heart of ZARA mode 6 Track fashion with the information base 6 Information standardizing and optimizing design 7 Zara’s competitive advantage – based on value chain perspective 8 Design 8 Marketing 9 Conclusion 12 ZARA's Informational Rapid Response Mechanism and Fast Fashion Summary In recent years, with the unique marketing strategy, fast fashion apparel business has developed rapidly in the world. Some of enterprises engaged in the fast fashion business have obtained considerable sales and global business expansion, it can be said that fast fashion has been become one of the most valuable fields in the clothing industry, and carrying out fast fashion business has become an ideal choice for clothing enterprises to develop rapidly and create performance (Hayes & Jones, 2006). In this paper, it chose an international fast fashion clothing brand--ZARA of Spain, which is characterized on marketing and has won widely recognized worldwide, as the research object. Through the analysis of the brand's marketing strategy, it interprets the universal business model used the fast fashion clothing brand to do business. This paper adopts the method of case study, first makes detailed analysis on the research object –ZARA...
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...89 Global Marketing Management 0372 Zara: Fast Fashion Case Analysis GMM Group F: Alexandra Botescu, Ana Sabau, Felicia Postica, Mila Kostadinova, Georgi Krastev, Raisa Nazarova 08-Nov-11 Zara: Fast Fashion Table of Contents Introduction............................................................................................................................................. 1 1. 2. Problem statement.......................................................................................................................... 1 Alternatives ..................................................................................................................................... 1 2.1. 2.2. 2.3. 3. Europe ..................................................................................................................................... 1 North America ......................................................................................................................... 2 Asia .......................................................................................................................................... 2 Issues ............................................................................................................................................... 2 3.1. 3.2. 3.3. 3.4. Cultural distance...................................................................................................................... 2 Administrative distance ..........................
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...of the Report: Zara Case Study Report Name: SeJun Lee Executive Summary Zara is one of the largest international fashion companies in the world, and it belongs to Inditex, one of the world‟s largest distribution groups. This study reviews Zara`s external environment and analyses its internal organisation to make recommendations for improving its core competencies against competitors such as H&M and GAP. This study first reviews the Zara enterprise in terms of PEEST environmental factors, Porter‟s Five Forces and the fast fashion industry life cycle (ILC). The liberalisation of European Union import quotas has had a positive political impact on the fast fashion retail industry. However, rapid style changes generate waste. In addition, recent financial crises have made customers more sensitive to price and tending to buy lower priced goods. However, young people and new Asian customers are more attracted to fashionable clothes. Also, new technology is quickly adopted to survive in a fast-moving market. Using Porter‟s competitive analysis of five forces, the threats of new entrants and substitution are low, and customers‟ and suppliers‟ bargaining power are moderate. However, the intensity of competitive rivalry is quite high because similar fashion firms are competing. Fast fashion has a shorter life cycle for products than most industries. This spurs both creativity and product innovation but demands more efficiency and advanced technology to reduce waste...
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...How does celebrity endorsements influence consumer behavior in fast fashion industry? 1. Introduction The fashion industry has come a long way over the past two decades. In the early years, big players such as Marks & Spencer offered a relatively straightforward fashion retail choice. However, with the lower cost of starting a retail outlet, the market has become more crowded since then. So called fast fashion retailers, are by no means the only one who succeeded and grew over the past years. Overall, the fast fashion retailers experienced a greater growth compared to the fashion industry as a whole (Cachon and Swinney, 2011). Such retailers are now ubiquitous and spotting a person on the streets who does not wear at least one fast fashion clothing item is rare. The key point to success lies in their business model; making the trends available to everyone. The rapid global changes have restructured the way fashion retailers do business. In today’s competitive market, using celebrity endorser to promote brands on television is a fairly common practice (Erdogan et al. 2001). Celebrity endorsements is believed to help consumers remember the message of the advertisement and the brand name the celebrity is endorsing. This creates the personality of a brand because when a celebrity is paired with a brand, this image helps shape the image of that brand in the minds of consumers (Argrawal & Kamakura, 1995). Celebrity endorsement is a new strategy in brand selling...
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...Innovation in the Fashion Industry: A Study of Four Cases 1 Table of Content Introduction Page 3 Page 3 Page 3 Page 5 Page 6 Page 6 Page 8 Page 10 Page 12 Page 13 Page 14 The history of fashion Major trends and developments in fashion Company Selection Analysis of the Companies House of Einstein Zara Fragile TOMS Conclusion Teamwork References Appendix 2 Introduction The history of fashion In order to fully understand where the fashion industry stands today in terms of organizational forms and strategies, we first look at the transformation this industry has gone through. This paragraph will analyze the changes that have occurred in the fashion apparel industry in the past century. We will also discuss some of the major trends that are visible in the fashion industry today. Up until the 1960s, the fashion industry was roughly divided into two groups. First there were firms which were based on mass production, with low costs and standardized styles that did not change frequently (Bhardwaj & Fairhust, 2010). During this time, a large group of consumers was less sensitive to fashion and had a preference for practical, basic apparel. Secondly there was the luxury fashion industry, which originated in France. A small group of French traditional players set up a special ...
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...THE CASE OF ZARA: PLANNING AND STRATEGIC CONTROL Alexandra Iacob University of Huelva HUELVA, SPAIN 2015 Abstract Zara is a retail company belonging to the Spanish company Inditex Group. Currently, Zara has 1,808 stores in 86 countries. This paper will analyse Zara’s business model, based on innovation and flexibility, as well as logistics chain and the various tools used to recognize the continuous changes in fashion trends and turn them into a product marketable within a few weeks. Compared with the competition, Zara has three distinctions: vertical integration to achieve a faster turnaround time; rapid expansion; and use of the store as the main tool for promotion, with low spend on advertising. This company offered a product design and quality, low price. In addition, resources and competences have allowed develop a different business model, where all processes from product design, to manufacturing, distribution and sales are carried out within the same organization. Key words: Strategic Management, Strategy, External Environment, Michael Porter’s Generic Strategies, Vertical Integration, Balanced Scorecard, Globalization Culture Introduction Company Background Four letters that make up a fashion brand known around the world. Zara is a Spanish brand of clothing and accessories and the foundation of Inditex’s success as well as their first retail format. Inditex S.A. is a Spanish multinational group of textile manufacturing and distribution established in 1975 in...
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...Sunderland The faculty of Business and Law _______________________________ Module Title: Marketing Management Module code: PGBM15 The market analysis of ZARA ______________________________________________ Student Name: Xia Tang Student Number:139151583 Tutor: Steve Storey Module Leader: Sudipta Das Word Count:4005 Date of submission: 16th June 2014 Contents Introduction of ZARA 1 1 Dynamics and trends within the marketing environment of ZARA. 1 1.1 Introduction of marketing environment 2 1.2 Macroenvironment-----PESTLE analysis of ZARA 2 1.3 Microenvironment analysis of ZARA 4 1.4 Poter’s three generic strategies on ZARA 4 1.5 SWOT analysis of ZARA 5 2 The importance of market research,marketing mix and service innovation for Zara 6 2.1 The importance of market research for ZARA 6 2.2 The importance of Marketing mix for ZARA 9 2.3 The importance of ZARA’S Service innovation 11 3 Marketing techniques for manager-decision 12 3.1 Segmentation ,targeting & positioning 12 3.2Marketing objectives and goals 14 3.3Marketing strategies and programmes 15 4 Conclusion and suggestions 17 References: 19 appendix…………………………...…………………..20 The market analysis of ZARA Introduction As one fashion brand of the Inditex Group, ZARA were founded in Spain in 1975, by Amancio Ortega and Rosalía Mera. When its first store provide low-priced lookalike products of popular, higher-end clothing fashions, after then turn out to...
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...Whiting Drive Midland, MI, U.S.A. 48640-2398 Dear Program Committee: Here is my report, “The Strategy of ZARA”, which you asked for on July 12, 2013. As we all know, the global apparel market is a consumer-driven industry. Also, globalization and new technologies have allowed consumers to have more access to fashion. As a result, consumers are changing, competition is fierce, and companies are evolving to meet these demands. Zara, a Spanish-based chain owned by Inditex, is a retailer who has taken a new approach in the industry.With their unique strategy, Zara has the competitive advantage to be sustainable. In order to maintain that advantage and growth they must confront certain challenges that face traditional retailers in the apparel industry. I will talk about the industry leader of fashion follower, ZARA and discuss the success the famous brand. Sincerely, Frank Li Executive Summary As we all know, as a fast fashion, Zara is always growing. It has the potential for sustainable growth due to its competitive advantage and its ability to face the challenges of the apparel industry. The company keeps its operating income elevated, has a strong and unique business model, and has various opportunities for expansion in the retail industry. To prove Zara has the prospect of sustainable growth in the international apparel market, it is important to understand and compare the financial differences of Inditex, its parent company, and its major...
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...International Journal of e-Education, e-Business, e-Management and e-Learning, Vol. 1, No. 3, August 2011 Case Study of Online Retailing Fast Fashion Industry Wei Zhenxiang and Zhou Lijie Abstract—The study investigates into the fast fashion industry worldwide, specifically on Zara, H&M and UNIQLO with respect to efficient supply chain management, scarce value creation, low costs promotions and positioning strategy, supported by comparisons between several typical well-known fast fashion brands. Through the overall analysis of B2C apparel online retailing in China, statistics show an enormous space for online retailing fast fashion industry to explore but a far way to catch up with the leading enterprises in the world in terms of e-commerce scale. The next main part demonstrates a case of a Chinese fast fashion online retailer-Vancl, analyzing its keys to success in aspects of proper product positioning, brand positioning, business mode, marketing strategy, products and services, user experience, logistics and team management. In addition, relevant suggestions for further prosperity are proposed in the end of the paper. Index Terms—fast fashion industry, e-commerce, B2C, online retailing retailers to acknowledge that designs move from catwalk to store in the fastest time to capture current trends in the market. The apparel products are designed and manufactured quickly and cheaply to allow the mainstream consumer to take advantage of current clothing styles at a lower...
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...its chains around the world. Zara is the largest and most internationalized of the six retailers that Inditex owns: (Zara, Massimo Dutti, Pull & Bear, Bershka, Stradivarius, and Oysho). Zara is one of the leading retail garments chain in Europe. Their main competitors are Gap and H&M, and together they form a group of speciality chains in the apparel industry. Zara has operated and adopted a different strategy as compared to Gap and H&M and the following points draw the difference between the players. 1. Vertical Integration: Traditionally the global apparel industry is highly labor intensive rather than capital intensive. Hence outsourcing production to developing countries with low labor rates to lower costs is a common trend amongst the big retailers. The same strategy is followed by Gap and H&M. In contrast, Zara has developed a successful diverse method of doing business in the fashion industry by working through the whole value chain. Zara manufactures 60% of its own products and is able to be flexible in the variety, amount, and frequency of the new styles they produce. In fact the whole line of most fashion sensitive products is produced internally (comprising around 50% of the total manufacturing) and in small batches for the most time-sensitive ones. 2. Distribution System: Zara has one centralized distribution centre compared to H&M and Gap, which have distribution centres in all the countries they operate. This reduces the distribution lead-time of...
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...Case Study – Zara Abstract The competition of current clothing industry is very fierce and Zara has many competitive advantages in this competition. This paper will analyze on about how the information technology help Zara to make decisions and make their performance more speed. First, a case review from Harvard Business Review will be covered in the introduction to show an overview of current Zara’s business model. Second is the Michael Porter’s model analysis based on Zara that including three generic strategies and five forces. Third, some of IT applications are really help the Zara to make their business more efficient, the applications will be applied in the Enterprise Resource Planning (ERP), Supply Chain Management (SCM) will emphasize a speed supply chain for Zara, and Customer Relationship Management (CRM). Finally is about the relationship between Zara and Peter Drucker’s theory, Zara and Andrew McAfee’s theory, Zara and Hey’s theory. The last part will conclude where is Zara today and make brief recommendations. Table of Contents Introduction 4 Zara and Michael Porter’s Model 5 Generic Competitive Strategies Analysis for Zara 5 Five Forces Analysis for Zara 6 Suppliers Bargaining Power 6 Buyer Bargaining Power 7 Threat of New Entrants 7 Threat of Substitute 8 Industrial Competitors 9 The Value Chain of Zara 10 Enterprise Resource Planning (ERP) 11 Supply Chain Management (SCM) 11 Customer Relationship Management (CRM) 13 Zara and...
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...Kingdom, Korea, Hong Kong and now in the United States is because of its uniqueness. UNIQLO offers high quality, fashionable clothes at a very affordable price. This report will discuss the reasons behind UNIQLO’s success and popularity. This report will discuss UNIQLO’s history, its business structure and the characteristics of the Japanese and Hong Kong retail industry. In addition, this report will also analyze the company’s Strengths, Weaknesses as well as the Opportunities and Threats that it deals with. Lastly, this report will discuss UNIQLO’s growth strategies and its plans to achieve its goal of becoming a global brand that transcends cultural boundaries. TABLE OF CONTENTS Page Number Executive Summary 1 Introduction 4 Industry Analysis Japanese Retail Industry 5 Hong Kong Apparel Industry 6 Competitor Analysis Local Competitors: Bossini 6 Giordano...
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...12/02/2011 Strategy Analysis of H&M | Maissaa BEN TAHRA | Strategy: Dr Darrell Jaya-Ratnam | Knowledge, Strategy and Business Analysis | Strategy: Dr Darrell Jaya-Ratnam | Knowledge, Strategy and Business Analysis | REPORT OF STRATEGIC ENVIRONMENT ANALYSIS | There are many external factors affecting the fast fashion industry most importantly in H&M’s case is the transportation cost and price of oil | External factors change in the markets of production. Raw material prices have increased; cotton prices for example almost doubled in 2010. H&M has to adapt to changing conditions but always in accordance with their business concept – to offer customers fashion and quality at the best price. | There is a mix of external shocks in the fast fashion industry: * Economic slowdown * Energy costs (oil price) * Employment level * Change in regulations * Logistics (i.e. shipping time) * Transportation cost and time (H&M owns design but do not own factories therefore it is importing most of its goods from china which results in high transportation costs) * Use of IT * Raw material price fluctuation (e.i: cotton’s price have doubled up in 2010) There is a mix of external shocks in the fast fashion industry: * Economic slowdown * Energy costs (oil price) * Employment level * Change in...
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...Evaluation of strategic options and recommendation 10 References 12 Appendixes 13 Executive summary This project aims to provide an in-depth analysis of external and internal factors affecting performance of world leading retailer Zara. First of all, the brief background on Zara is provided in order to familiarise reader with the business model they implement. Secondly, the PESTEL framework is utilised as the base for analysis of external environment and its potential effects on company’s performance. Further, the Porter’s 5 forces are identified in order to assess where the competitive advantage stems from. After assessment of external environment, this paper provides the overview of internal factors which might be crucial for success, as well as drawbacks of Zara’s internal organisation. Assessment of internal environment starts from the evaluation of Zara’s resources and capabilities, followed by the critical analysis of manufacturing and logistics processes. Further discussion of the PR issues and its effects on company performance is provided. In addition, the benefits of corporate socially responsible policies are discussed. Overall conclusions on Zara strategic steps that are to be taken are suggested based on the conducted analysis of the internal and external characteristics of the environment Zara is doing business in. Zara background Zara is the flagship chain store of Spanish company Inditex Group which incorporates other brands such as Zara Home, Massimo...
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