...STRATEGIC MANAGEMENT PAPER ZARA Created By: Anggita Sulisetiasih 1006718706 Kenji Wibawa Junardy 1006718990 Patricia M. A. Adam 1006805694 International Undergraduate Program Faculty of Economics University of Indonesia Depok 2013 TABLE OF CONTENTS Chapter 1 4 INTRODUCTION 4 1.1. Company Background 4 1.2. Vision and Mission 4 1.3. Long-term Objectives 5 Chapter 2 6 VISION – MISSION ANALYSIS 6 2.1. Importance (Benefits) of Vision and Mission Statements 6 2.2. Characteristic of a Mission Statement 7 2.3. Mission Statement Components 8 2.4. Vision and Mission Relation: Is It Achievable? 10 Chapter 3 11 EXTERNAL ASSESSMENT 11 3.1 Michael Porter’s Five-Forces Model 11 3.2 External Factor Evaluation (EFE) Matrix 13 3.3 Competitive Profile Matrix 15 Chapter 4 19 INTERNAL ASSESSMENT 19 4.1 Resource-Based View Analysis 19 4.2 The Internal Factor Evaluation (IFE) Matrix 22 4.3 Financial Analysis 27 Chapter 5 33 STRATEGIES IN ACTION 33 5.1 The Strategies 33 5.2 Michael Porter’s Five Generic Strategies 34 Chapter 6 36 STRATEGY ANALYSIS AND CHOICE 36 6.1 The Strengths-Weaknesses-Opportunities-Threats (SWOT) Matrix 36 6.2 The Strategic Position and Action Evaluation (SPACE) Matrix 37 6.3 The Boston Consulting Group (BCG) Matrix 39 6.4 The Internal-External (IE) Matrix 40 6.5 The Grand Strategy Matrix 41 6.6 The Quantitative Strategic Planning Matrix (QSPM) 44 Chapter 7 46 IMPLEMENTING...
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...STRATEGIC MANAGEMENT PAPER ZARA Created By: Anggita Sulisetiasih 1006718706 Kenji Wibawa Junardy 1006718990 Patricia M. A. Adam 1006805694 International Undergraduate Program Faculty of Economics University of Indonesia Depok 2013 TABLE OF CONTENTS Chapter 1 4 INTRODUCTION 4 1.1. Company Background 4 1.2. Vision and Mission 4 1.3. Long-term Objectives 5 Chapter 2 6 VISION – MISSION ANALYSIS 6 2.1. Importance (Benefits) of Vision and Mission Statements 6 2.2. Characteristic of a Mission Statement 7 2.3. Mission Statement Components 8 2.4. Vision and Mission Relation: Is It Achievable? 10 Chapter 3 11 EXTERNAL ASSESSMENT 11 3.1 Michael Porter’s Five-Forces Model 11 3.2 External Factor Evaluation (EFE) Matrix 13 3.3 Competitive Profile Matrix 15 Chapter 4 19 INTERNAL ASSESSMENT 19 4.1 Resource-Based View Analysis 19 4.2 The Internal Factor Evaluation (IFE) Matrix 22 4.3 Financial Analysis 27 Chapter 5 33 STRATEGIES IN ACTION 33 5.1 The Strategies 33 5.2 Michael Porter’s Five Generic Strategies 34 Chapter 6 36 STRATEGY ANALYSIS AND CHOICE 36 6.1 The Strengths-Weaknesses-Opportunities-Threats (SWOT) Matrix 36 6.2 The Strategic Position and Action Evaluation (SPACE) Matrix 37 6.3 The Boston Consulting Group (BCG) Matrix 39 6.4 The Internal-External (IE) Matrix 40 6.5 The Grand Strategy Matrix 41 6.6 The Quantitative Strategic Planning Matrix (QSPM) 44 Chapter 7 46 IMPLEMENTING...
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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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...Page No | 1. | Why Zara? | 2 | 2.2.12.22.32.4 | OverviewBackgroundBeginningGlobal ExpansionsFinancials | 22222 | 3. | Brand Positioning | 3 | 4.4.14.24.34.4 | PEST AnalysisPoliticalEconomicSocio-CulturalTechnological | 33344 | 5.5.15.25.35.4 | SWOT AnalysisStrengthsWeaknessOpportunitiesThreats | 44556 | 6.6.16.26.3 | Business Strategies5 P’s of MarketingPorter Five Force analysisMaslow’s Hierarchy | 77810 | 7. | Recommendations | 11 | 1. WHY ZARA? “People will stare, make it worthwhile”. According to me this is the most apt quote for fashion, clothing. Designer clothes are meant for this sole purpose only and yes, the feel good factor follows. I had dreamt of becoming a fashioner designer during my school days. But due to social stigma I ended up being an engineer and now an mba aspirant. So now instead of designing clothes, I’m studying what makes clothing brand a successful brand. From childhood, I have been a brand hungry person and this has developed a curiosity in me as to how and what makes me want these brands. There are many clothing brands which I have been loyal to but for my individual assignment I have chosen Zara, as it is the new sensation in the market. Being a shopaholic my self I love the brand as they really have a great collection. 2. OVERVIEW 2.1 Background Zara is a flagship brand of the Spanish retail group, Inditex group. Inditex is the world's largest fashion group, which owns other fashion brands such as Pull & Bear...
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...Zara Case Study Pre-course Assignment | International Business INTRODUCTION TO THE CASE Zara is a retail chain company which operates in the fashion industry. It's owned by Indixt group in North West Spain. It holds the ownership of some world famous brands such as Massimo Dutti, Pull & Bear, Oysho, Uterqüe, Stradivarius and Bershka. The very first Zara shop was open in 1975 and their specialty is frequent innovation of new product lines. Also they decided not to outsource their production to low-cost countries which is a trend in the same industry. At the same time they followed up a special policy of investing on opening a new store instead of investing on advertising which ultimately causes them to spread their branch network and make their products available everywhere. Zara controls most of the steps on their supply chain. Also they get the customer feedbacks and respond to them in an impressive manner. Through this, they are maintaining a loyal and frequently aware customer base. INTERNATIONAL BUSINESS 1 Pre-course Assignment | International Business CASE QUESTIONS Which theory is the best representative of Zara's internationalization? When considering about the internationalization theories, there are three main theories to be taken in to consideration. 1. The Uppsala internationalization model 2. The transaction cost analysis model 3. The network model The Uppsala Internationalization model In this model, a firm is willing to intensify their commitments...
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...INTERNATIONALISATION OF THE SPANISH FASHION BRAND ZARA Carmen Lopez Ying Fan Brunel Business School Journal of Fashion Marketing and Management (2009), 13:2, 279-296 INTRODUCTION Zara is one of the world’s most successful fashion retailers operating in 59 countries. However, there is little research about the firm in English as the majority of publications have been written in Spanish. This paper seeks to address this gap in the literature by examining the internationalisation process of Zara. This study adopts an in-depth case approach based on extensive secondary research. Literature published in both English and Spanish has been reviewed, including company documents such as annual reports. The paper starts with a brief overview of the global textile and clothing industry, followed by the case study of Zara. The main part of the case examines the key aspects in the internationalisation of Zara namely: motives for internationalisation, market selection, entry strategies, and international marketing strategies. In the final section, comparisons are made between Zara and two of its main competitors, H&M and Gap. The global textile and clothing industry The removal of all import quotas in the textile and clothing industry from January 2005, involving the unrestricted access of all members of the World Trade Organization (WTO) to the European, American and Canadian markets is considered a key driving force in the development of the clothing sector (Keenan, et al., 2004). This...
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...ZARA Word count: 3799 Table of Contents Executive summary 2 Zara background 3 External factors and competitive forces 3 PESTEL 3 Porter’s 5 4 Internal factors 6 Resources and capabilities 6 Manufacturing 8 Logistics 8 Public relations crisis and their effect on peformance 8 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...
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...business strategies. In less than 30 years, Zara went from a local brand to a global brand and ranked as the 73rd in the list of the world’s 100 top brand by Interbrand. As mentioned previously, key success factors for Zara are: short turnaround time for concepts to reach the market, smaller quantities per style and many more styles during the year. Further, the elements supporting the successful factors are: extensive research providing constant inputs into the product development process, locating business functions close to headquarters for tight control and finally Zara’s advanced communication and technology. This model was carried out to 59 countries with 852 stores, where the international sales accounted for 69% of total turnover. In the initial stages, Zara followed the ethnocentric strategy where Zara measured other cultures against their own and sought what was most ideal. By encountering difficulties in some countries due to cultural differences, Zara quickly adapted and changed its strategy to geocentric strategy. Further, similar to the domestic market, all Zara’s shops were set up in prime locations, and standardized key strategic elements such as window display, interior design, layout, customer service and logistics. The internalization process of Zara focuses on the three factors: motives, market selection and entry options. The pull factors Spain’s entry into the European Union in 1986 gave the opportunity for Zara to expand internationally via potential economies...
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...INTERNATIONALISATION OF THE SPANISH FASHION BRAND ZARA Carmen Lopez Ying Fan Brunel Business School Journal of Fashion Marketing and Management (2009), 13:2, 279-296 INTRODUCTION Zara is one of the world’s most successful fashion retailers operating in 59 countries. However, there is little research about the firm in English as the majority of publications have been written in Spanish. This paper seeks to address this gap in the literature by examining the internationalisation process of Zara. This study adopts an in-depth case approach based on extensive secondary research. Literature published in both English and Spanish has been reviewed, including company documents such as annual reports. The paper starts with a brief overview of the global textile and clothing industry, followed by the case study of Zara. The main part of the case examines the key aspects in the internationalisation of Zara namely: motives for internationalisation, market selection, entry strategies, and international marketing strategies. In the final section, comparisons are made between Zara and two of its main competitors, H&M and Gap. The global textile and clothing industry The removal of all import quotas in the textile and clothing industry from January 2005, involving the unrestricted access of all members of the World Trade Organization (WTO) to the European, American and Canadian markets is considered a key driving force in the development of the clothing sector (Keenan, et al., 2004). This...
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...This paper proposes to use Zara as a case study to analyze the internationalization process and its impact on the international context. Through the analysis, it seeks to gain some insights from this Spanish fashion retailer’s internationalization strategies that we could learn and apply in international business today. Zara started as a clothing retailer in Spain in 1975 and became incorporated within Inditex in 1985 (Keeley and Clark 2008). From its first inception, Zara focused its growth in the domestic market. In 1988, Zara was motivated to search for new markets when the Spanish market became saturated. From 1989 to 1996, Zara expanded into markets geographically. From 1997 to 2005, the internationalization experience acquired has enabled Zara to expand rapidly disregarding the geographical distance and cultural differences (Lopez and Ying 2009). Zara has 1,723 stores located in 77 countries by end 2010. Overseas sales contributed more than 60% of its total sales (Inditex 2012). Push and pull factors influenced Zara’s global expansion. The limited market growth opportunity in Spain was the key push factor to expand internationally. The key pull factors were (i) Spain’s entering the European Union in 1986 and (ii) globalization of economies that creates potential economies of scale. Other pull factors include the lifting of export barriers and information technology advancements (Lopez and Ying 2009). Initially, Zara followed the ‘Uppsala Internationalization...
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... | |11/10/2013 | | | | | Essay Introduction The targeted industry on which the effect of globalization will be studied is the garment industry, and the two companies which we will study in this regard are Zara and H&M. All the top garment industries notability Zara and H&M are doing a fine job in the garments industry as they have adopted well-defined quality standards. There is a diverse research made on the garments and fabric business as they do change with respect to the trends and fashion. Both H&M and Zara are strategically safe players and they have all what it takes to be the front runner in the market. Their stores are in the different areas of the world and most specifically in the main and posh markets. Globalization brings about your extension associated with overseas ethnical, financial, along with political actions (Boudreaux, 2008). As folks, concepts, understanding, along...
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...Pre-course Assignment | International Business INTRODUCTION TO THE CASE Zara is a retail chain company which operates in the fashion industry. It's owned by Indixt group in North West Spain. It holds the ownership of some world famous brands such as Massimo Dutti, Pull & Bear, Oysho, Uterqüe, Stradivarius and Bershka. The very first Zara shop was open in 1975 and their specialty is frequent innovation of new product lines. Also they decided not to outsource their production to low-cost countries which is a trend in the same industry. At the same time they followed up a special policy of investing on opening a new store instead of investing on advertising which ultimately causes them to spread their branch network and make their products available everywhere. Zara controls most of the steps on their supply chain. Also they get the customer feedbacks and respond to them in an impressive manner. Through this, they are maintaining a loyal and frequently aware customer base. INTERNATIONAL BUSINESS 1 Pre-course Assignment | International Business CASE QUESTIONS Which theory is the best representative of Zara's internationalization? When considering about the internationalization theories, there are three main theories to be taken in to consideration. 1. The Uppsala internationalization model 2. The transaction cost analysis model 3. The network model The Uppsala Internationalization model In this model, a firm is willing to intensify their commitments towards...
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...University of 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...
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...adapt. These forces affect the value chain and the generic strategies that help build the framework that can help the businesses know their position and their competitors’ position to make a strategic plan for the business. ZARA is the world largest clothing retailer operating in 86 countries ("INDITEX Group - Zara", n.d.). ZARA was founded by Amancio Ortega in 1975 ("ZARA - Spanish Fashion's First International Company | don Quijote", n.d.) ZARA had their first store in La Coruña, Spain, which is now the currentmain headquarter. The success of ZARA is a very interesting story so in this paper the discussion will be over ZARA’s position and its competitors’ position by applying Porter’s Five Forces. Another focus will be the generic strategy and value chain. Lasitaporn Kraikruan Porter’s Five Forces Porter’s Five Forces are tools that can help a business understand their business position, current competitive position, and its profitability level by considering the tension of 5 forces: Bargaining of suppliers, bargaining of buyers, threat of new entrants, threat of substitute products or services, rivalry among existing competitors. It also implies whether an industry is attractive or unattractive. Porter’s Five Forces in ZARA are the following: Bargaining power of suppliers: The power of suppliers can drive the price up of raw materials, if there are few suppliers in the market. Low availability to access materials and a high switching cost to...
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...Zara’s Booming Business Worldwide Zara being one of the worlds most well know fast retailers, has to do a lot to stay relevant, and get people shopping in their stores. With their fast paced supply chain making them a fast retailer who keeps low inventory, they are able to keep up with the newest trends. However to keep people coming back they have to be creative and come up with new ways to market their product. They have to come up with a sustainable competitive advantage, segment their target market for growth opportunities, different process for different countries, and finally make sure they have enough financial resources. With this innovative business model, Zara creates value for their customers and generates profit for their company. When it comes to creating a sustainable competitive advantage, Zara has to tools. First and foremost, they have a very fast production speed for which products are produced and distributed. Zara’s success comes from stocking their clothes in a limited quantity, then not replacing collections. Their customers know that if the product is sold out, there is no second chance to buy. This makes their consumers buy the product right when they see it, afraid that it may sell out or they may not find it at another time. “With Zara, you know that if you don’t buy it, right then and there, within 11 days the entire stock will change. You buy it now or never. And because the prices are so low, you buy it now”, says Masoud Golsorkhi, the...
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