However, economic downturn has threatened sales, which has been a cause of worry for the investors (Rohwedder & Johnson, 2008). Competition in international apparel industry has become rampant after the removal of quota in the sector. Thus businesses today operate in real-time in the global market place and they have to leverage comparative advantage (Ferdows, Lewis & Machuca, 2004). Thus, tapping into the foreign markets and the process of market entry, in addition to the innovative practices and technology can give a firm comparative advantage. Zara needs to ascertain the strategy for the way forward. 2.0 Present Vision, Mission and Corporate Objectives The organization has a customer-focused vision since the beginning and this continues to be the defining feature. Their challenge is to live up to customer expectations. The group philosophy can be summed up as “good designs and good quality at affordable prices” (Business Week, 2004). They have total control over the fashion process right from designing to manufacturing and distribution. The company aims to differentiate itself because of its fast fashion approach but intense competition has diluted this advantage. 3.0 Situational Analysis To alter the strategy an organization needs to evaluate its position compared to its competitors. This requires a review of its internal and external business environment. The external environment is being evaluated based on the PESTILE and the industry analysis is based on Porter’s Five Forces. 3.1 Environmental Analysis PESTILE Political The Political condition of the nations were Zara enters is fairly stable and its mode of entry depends upon the local/regional situation. Accession of Spain into the EU benefitted Spain as the export policies were revised and tariff deregulation took place (Bonnin, 2002). Economic The clothing and apparel industry contributes to the economy of Spain and several small manufacturers have emerged in the sector that can supply clothing at low cost (Bonnin, 2002). This helps in providing employment thereby positively impacting the nation’s economy. Social Zara has to educate the market and influence consumers’ shopping habits (Lopez & Fan, 2003). The country-of-origin usually adds positive value to the product but Zara has not been able to take this advantage in Spain. Technological Zara continues to rely on human intelligence, on information gathered from their store managers through the PDAs to facilitate informal exchanges (Ferdows, Lewis & Machua, 2005) but this is an obsolete version of Ms-Dos (Diaz, 2005). They have not invested in data analytics software or in POS data which can reduce the workload of the store managers. Innovation Zara is adopting technology to facilitate the store managers to display and order merchandise faster. They are also adding cargo routes for shipping goods (Rohwedder & Johnson, 2008). Legal Zara uses a different entry mode for each country depending upon the legal regulations prevalent in that market. For instance, in countries such as Cyprus and Poland it entered through franchising but in stable markets such as Germany and Japan they entered through joint ventures (Ghemawat & Nueno, 2003). In China they did not enter as a luxury brand but caters to the casual-wear segment (Fong, 2006). They use prime locations and take care in presenting their store fronts but they have very limited stores in almost all countries against their competitors who have expanded presence. Environmental Zara has eco-friendly stores and produce less waste. They have reduced energy consumption by twenty percent. They support organic farming and
Described as the most innovative and devastating retailer in the world (CNN, 2001), Zara, the Spanish clothing company, breaks all rules of the apparel industry through its low-cost approach (Heyden, 2007). It believes in just-in-time production and is able to respond to the changes in customer demand at the shortest possible time-frame in the industry…
The conclusion from this study states that apart from certain issues that Zara could face in the future, it has been successful all over the years through sticking to its current system. However, with the continued expansion of Zara into new areas and markets, a change would be required in the current process and system.
This essay discovers Zara company. This is supported with a lean production and procurement system that recognises significant cost controls in the operational model. Further advantages include the ability to ensure a two week lead time on fashion merchandise from the design phase to final in-store delivery as well as a team-oriented.
Strategic analysis of fast fashion company: Zara BY YOU YOUR SCHOOL INFO HERE DATE HERE Executive Summary Zara is able to successfully outperform competition in terms of sustaining a low cost product provider strategy founded on lean manufacturing philosophy and controlling waste in raw products and finished merchandise.
Zara maintains many retail competitors, ranging from H&M to Benetton, each providing products with similar characteristics and moderately-similar pricing structures. It is a highly saturated market in which Zara maintains its international operations. Because of this, the business must be aware of the competitive forces that drive strategic needs.
Zara Company is known as one of the biggest companies in the fashion industry in the world based in Spain. It is in association with the largest distribution group in the world, the Inditex. The primary focus of the company lies with its customers and the company focuses on its innovative designs targeted towards its customers, its manufacturing processes, its distribution and sales as well as the widespread network that is in association with the company (Company, 2010).
ZARA: IT for fast fashion. Upgrading Zara’s POS systems From the case study scenario, it would be recommendable for Salgado to upgrade the POS terminals to a modern operating system. This is the ideal decision for Zara as it is continually expanding its stores making it more complex to operate using the simple DOS systems which is increasingly becoming obsolete, and which is highly manual.
In keeping with the rapidly increasing business practices within the fast fashion retail industry, Zara can be considered as one of the leading fast fashion retail companies. Zara is widely recognised as the leading fashion retail organisation especially for offering extensive number of quality based high-street fashion products to the global customers.
This essay analyzes Zara brand. It believes in just-in-time production and is able to respond to the changes in customer demand at the shortest possible time-frame in the industry. However, economic downturn has threatened sales, which has been a cause of worry for the investors. Competition has become rampant after the removal of quota.
The case study focuses on Inditex, Spanish retail giant, and the manner in which its largest retail chain, Zara, has been successful. The success is due to its flexibility, excellent fashions and application of a simple business model. As of 2002, Inditex had six separate distribution chains; Zara, Stradivarious, Oysho, pull and bear, Bershka and Massimo.