ZARA It for Fast Fashion and GAP - Research Paper Example

? ZARA: It for Fast Fashion and GAP By: Location Type of Business Zara Conducts Zara majors in the apparel industry with widespread branches across the country in different regions. Zara is in the fashion industry and it deals in men’s clothing industry and women’s clothing. Their products is divided into shoes, cosmetics and complements all directed towards making changes in the fashion industry and attracting more customers to purchase more of their products (Gitman & McDaniel, 2009). Zara Success in Introducing a Disruptive Business Model within the Apparel Manufacturing and Retail Industry Zara has successfully introduced a disruptive business model within the apparel manufacturing and retail industry by its IT leverage in the fashion industry. Its investment into the IT field significantly gives a boosts to its business activities by allowing it to develop its capabilities. Secondly, the application of POS also poses a challenge for Zara business within the industry because it is not availing more time for their management to accurately perform their administration functions. Core Competencies of Zara Zara has various core competencies makes it to compete favorably in the market with other companies producing similar products like them. Their key competencies lie with the resources that are found within the company and which are useful in achieving production within the company. Design g and manufacturing have been the key focus for Zara; therefore, they have a tight a control over their production process. In addition, the numerous partnerships they conduct within their market niche are located near their headquarters and this helps in maintaining a design for their products. Time is also a key competency for Zara because they ensure that their products are produced in a timely manner and are transported by the various intermediaries involved to reach the customer in a timely manner, therefore, serving their needs by availing the products at specific places within the provided time. Zara is also blessed with the capability of producing numerous products at a time; therefore, their products always satisfy the existing demand in the market. Lastly, Zara is always advanced with the changing trends in the fashion industry, therefore, are always on the front to satisfy the different needs of their clients. This builds customer loyalty amongst their client leading to an increase in sales for the products being produced. Characteristics of Zara’s Target Consumers Groups, Who They Are and Their Behavior Attitudes Zara’s target customer group consist of young of mostly young adults who are price conscious and highly value fashion trends existing in the market. The percentage of their customer group is constituted by women who form more than half of the total customers who visit the shops. Secondly, men who form of a quarter of thee customers with a small fraction of children being customers of the products produced by the company (Hill & Jones, 2010). Unique Consumer Behavior Which Zara Has Been Able To Build In Its Primary Customer Base Zara has been able to build unique customer behaviors by the products and services through their products which they have designed to be fashionable and affordable. Most, customers of Zara prefer products which are trendy while at the same time trendy in appearance. The company has guaranteed this by deciding to cut edge fashion at affordable prices enable their customers to comfortably purchase their products. Secondly, Zara satisfy their customer behavior of diversity by offering large choice of styles by their products. Being that there are different occasions, Zara’s customers have developed the need to have different clothe types and fashions. By offering large choice of styles of products produced, Zara competently satisfy the existing need in the market through their products and other services. Lastly, Zara’s customers always prefer their products availed at strategic points and Zara has satisfied this gap by situating their products at vantage points. It has succeeded in this by its numerous advertising processes (Porter & Norton, 2011). The Apparel Industry Business Models Zara has three apparel business models. They are the concept, capabilities and value drivers. Its concept oversees its production, design and distribution processes. Its capabilities work to enable it to compete favorably in the market by pointing out strategies that could aid in this. Zara’s value drivers s are there to ensure that Zara’s business activities yields a positive return to all the stake and shareholders concerned who contributed in the constitution of the business (Pahl & Mohring, 2008). Reason Why GAP Spends So Much on Advertising and the Primary Objective of This Advertising The gap spends so much on advertising because the cost involves operational expenses included in the total cost. This operational cost involves the payroll involves the general & administrative expenses. The primary objective of this advertising is to maximize on their sales of their products and also market their products to the existing and prospective customers. Introduction of GAP New Line of Clothing into the Market and What Times Of the Year Dominated These Introductions Gap introduces new lines of clothing into the market whenever there is a change in fashion or technological development within their operational region. The products produced by the company always dominate the market at various holidays’ periods and throughout the year. Where Does GAP Manufacture Its Clothing Gap primarily manufactures a majority of its products from India. This is because India provides them with sweatshop labor needed and they make use of these to increase on their profits while at the same ignoring their responsibilities towards their employees and their wider society. Primary Sources of Risk for GAP with This Approach to the Apparel Manufacturing and Retailing Business The primary sources of risk for GAP with this approach to the apparel manufacturing and retailing business lies with the unstable stock market prices which are always fluctuating. GAP also faces risk in expanding its industry because of the numerous challenges in diversity of customers and products happening annually. In addition, expansion to other countries also poses a major risk to GAP, because they are forced to enter into a new competition with other companies providing similar products. GAP also faces major risk in developing new market plan for their company as it might turn out to be success or failure for them (Trapp, 2011). Ways in Which GAP Makes Money GAP Inc. makes money from the various business activities of selling clothes and accessories to the different customers they have. The environment where their shops are located also influences the money they make because it is appealing to most customers because of its trendiness. GAP also makes money from its hardworking employees who sit round the clock all day long to ensure that there is no gap in the market caused by low production of clothes and other accessories (Ireland, Hoskisson & Hitt, 2008). GAP’s Core Competencies and Competitive Advantages The core competencies and competitive advantage of GAP is that they have a strong customer service price point that simplifies the business process between the company and the customers. Secondly GAP has strong image of branching to the internet and confirming all the needed information about the company products or services online. The company also prides itself of the quality products it produces and this plays a significant role in attracting customers to their stalls, since many customers prefer value or their products (Lussier, 2012). References Gitman, L. J., & McDaniel, C. D. (2009). The future of business: The essentials. Mason, OH: South-Western Cenage Learning. Hill, C. W. L., & Jones, G. R. (2010). Strategic management theory: An integrated approach. Boston, MA: Houghton Mifflin. Lussier, R. N. (2012). Management fundamentals: Concepts, applications, skill development. Mason, Ohio: South-Western. Ireland, R. D., Hoskisson, R. E., & Hitt, M. A. (2008). Understanding business strategy: Concepts and cases. Mason, OH: South-Western Cengage Learning. Porter, G. A., & Norton, C. L. (2011). Financial accounting: The impact on decision makers. Australia: South-Western Cengage Learning. Trapp, R. (2011). What you need to know about business. Chichester: Capstone. Pahl, N., & Mohring, W. (2008). Successful business models in the fashion retail industry: Strategic audit of H&M compared to ZARA. Norderstedt, Germany: GRIN Verlag. Read More