• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Zara case study. Zaras Objectives, Strategies and Problems.

Extracts from this document...

Introduction

ZARA: FAST FASHION 1. Introduction In my short study case I will start by illustrating Zara's present situation (according to the case), then I will continue with a brief analysis of the internal and external environments; in the next step I will develop some alternative ways of action and I will end by presenting my recommendations regarding the adaptation of the Zara's business model in order to successfully face the future economic context. 2. Zara's Objectives, Strategies and Problems. 2.1 Objectives The first objective for Zara is to continue their expansion in countries like Switzerland, Italy, and Czech Republic and also on other continents: Latin America and Asia. A second objective is to continue their stores' growth in the countries where already exists in order to consolidate its position and increase its market share. By the accomplishment of the two objectives Zara is looking to create enduring profitable growth. 2.2 Strategies I will start with the product market penetration used by Zara and more precisely with the product line stretching (one of the tactics allowed by the product market penetration) and we can see in the case of Zara that it started with clothes and then added accessories. Zara definitively use a price differentiation that permits a differentiation between countries: starting with the lowest prices from Spain, then the prices are increasing with 10% for Southern Europe and 70% higher in the Northern countries, fact that is explained by the alignment to the standards of life in that area. ...read more.

Middle

Besides its specific capabilities Zara is facing some issues also: ?Because of an incorrect study the entrance on Argentina market was a failure because when analyzing the market the managers didn't consider all the political and the economical factors. ?The lack of advertising: There is made only twice a year advertises and that is at the end of seasons for the sales. If Zara wants to continue the expansion on other continents where they don't beneficiate of brand awareness it will be really difficult to be successful without an advertising campaign ?The Vertical Integration which is a distinctive feature of Zara's business model start to become more and more difficult to handle as long as the distance from the headquarters is getting bigger. 3.2 External Environment To have a better understanding of the company's business model it is necessary to take a look to the external factors. Opportunities: ?Once with the expansion of U.E the customs will disappear and also the liberalization of markets (e.g. Germany) will facilitate the further expansion of Zara ?Zara entered new markets that normally were riskier to approach by partnerships: franchises in Cyprus, joint-ventures with Benetton in Italy and Otto-Versand in Germany. ?If Zara will expand in Asia it will need to replicate its business model because of distance and differences Threats: ?A treat that become significant for several companies (e.g. ...read more.

Conclusion

Zara should most likely develop a second distribution center in U.S and the third one in Asia in order to deliver fashionable clothes in a fast manner. The creation of these two distributions centers it will be a test for Zara, it will be like a duplication of its business model and also a big signal of alarm towards the competitors but it also be a failure if it isn't well managed. I would like also to consolidate the transnational strategy by adding two more elements: a management team that will be in charge with the coordination of all activities regarding the development of the two distributions centers and a council will be added also in order to supervise and improve the communication between the product divisions and the distributions centers (Exhibit 1). The information from the local centers will be sent to the Spain headquarters, in this way; the "design-on-demand" model will be more adapted to the various country specificities. An optimal solution can be the combination between cost leadership and local responsiveness. 6. Conclusion Zara is one of the biggest retailers in the fashion industry. Its business model is unique: Zara gathers the information from the customers and then respond in a fast manner to their demands. As long as Zara is keeping its philosophy and make some modifications regarding its strategy in order to face the futures challenges it will be impossible to assist to the disappearance of this retailer in the near future. Exhibit 1 ?? ?? ?? ?? 1 ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Case Studies and Analysis section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Case Studies and Analysis essays

  1. Marked by a teacher

    Wace Burgess Case Study

    4 star(s)

    If the quality is of high standard then M&S will receive high revenue and will thank Wace Burgess for this and then both will benefit from high quality cards. This dependability will enable Wace Burgess to be perceived as a good supplier which will result in getting more customers.

  2. Marked by a teacher

    Business Culture & Strategy Analysis Of JD Wetherspoon

    4 star(s)

    The market had adapted to the changes in the 'tied house' system and other retail pub chain had been developing their business. Then, the market now appears to be over-supplied. Customers want more services With the change of living styles, customers need more additional service.

  1. Microsoft Case Study. Objectives, structure and marketing.

    to spend a great deal because they would be losing money hence making no profit. Finance Microsoft's finance department is also another key element to a success of it being successful; it takes in accounts of how much money is coming into the business.

  2. Market entry strategy of Aldi and Lidl. Plans for expansion.

    Advantages of greenfield investment The economic growth of the host country is one of the most important determinants for Greenfield investment considerations.

  1. The Diversity of Distribution Channels in the Retailing Industry

    * Rail * Pipe With these procedures merchandise are able to be transported in Europe and globally, There are some organisations that use RORO ferries,( RORO ferries are ferries designed to transport goods from one place to another) piggyback systems and euro channel tunnel.

  2. Proctor & Gamble, Inc. (Scope Case)

    Also, to get the approval for reducing gum inflammation and fighting gingivitis, especially for the CDA, Scope has to submit their packaging and advertising for approval to the HPB. They also require products to demonstrate effectiveness against cavities or plaque/gingivitis .

  1. Case study of the Unilever Company

    Globalization effects on Unilever. Globalization or global economy is affecting the entire world, such as multinationals, in this case Unilever. Globalization is a fact of the current economy in the world, a process by which regional economies, societies, and cultures have become integrated through a global network of communication, transportation and trade.

  2. I will be identifying the legal criteria for offer and acceptance in a valid ...

    Angus can sue her for the 600 pounds that she promised him. Contracts were only valid with Eva and Daniel. There was no contract made with Bobby, as his acceptance was rejected by Angus in the first place. There was no contract with Catherine as well, due to her means

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work