This difficulty of the imitation is one of the foundations the leadership strategy relies on. Zara has managed to successfully exploit its economic of scale through its size and volume of production. Passemard observes that there is a relationship between firm-size measured in terms of volume of production. Based on this understanding, and considering that Zara sells medium quality fashion clothing at affordable prices, its unit production is minimum. The optimum volume of production is reached when the average cost per unit production is minimal. (Passemard, 2006). Zara has also managed to sustain the leadership strategy because of its volume of production. Passemard, points out that with a high level of production, a company is able to purchase and use specialized manufacturing tools which other small companies are not able to afford (Passemard, 2006). The study indicates that the merchandize in the rain facility has a capacity of only 45,000 folded garments per hour and that this facility has its limitation unless more capacity can be created elsewhere. A further study by Adams observes that cost advantage may be associated with division of labor, which apparently is one of the key ingredients of Zara efficiency of work. The study indicates that at Zara, the design collections are developed by creative teams rather than groups of designers. In general implementation of leadership strategy requires firms that are able to produce relatively simple standardized products and at the same time are able to sell those products at comparatively low prices. This mechanism contrasts other companies who pursue business or corporate strategies from Zara. Zara has managed to keep its low cost production by ensuring that they maintain the supply and provide the variety to the taste of the supplier. The study points that Zara stores is stocked with items tailored to the taste of the local clientele and that one would never end up looking like someone else. According to Adams, for the cost producer strategy to work best, buyers must be able to use the product in the same way and have much same needs and requirement when buyers are large and have significant bargaining power (Frankl & Rubik, 2000). This is underscored by Porter in his analysis of the buyer power while examining the Porter’s Five forces. Porter points out that this strategy will be efficient if the industry’s product is a standard product which is readily available from variety of sellers. In the case of Zara, there are several outlets providing almost the same ambience all over Northern Spain and the rest of the world. In observation of the Porter Five forces, Zara has been able to protect itself from the rivals, buyers, suppliers, potential entrants and substitutes. The study reveals that Zara has managed to keep off the new entrant by sheer reduction of prices for artificial purposes as well as using its dominance and economies of scale to contain the competitors like GAP. Identify the corporate level strategies In identifying corporate growth strategies, this paper will consider that use of Ansoff matrix. Zara has exploited the use of the matrix.Ansoff matrix portray alternative corporate growth strategies. This strategy explores the present and future potential growth of the business based on the products and markets. While looking at the position of Zara, it is important to points out that
COMPANY ANALYSIS (Author’s name) (Institutional Affiliation) Identify the business level strategy of Zara: Zara is noted to be one of the world’s fastest growing manufacturers of affordable fashion clothing this can be attributed to Cost leadership business level strategy…
Strategic Analysis of Zara BY YOU YOUR SCHOOL INFO HERE DATE HERE EXECUTIVE SUMMARY Zara operates in a very forceful and saturated retail industry with many competitors that have similar products on the market to Zara and with competency in gaining market attention with target customer segments.
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.
Wailgum (2008) argues that “Supply chain management (SCM) is the combination of art and science that goes into improving the way your company finds the raw components it needs to make a product or service and deliver it to customers.” After explaining that “supply chain is the collection of steps that a company takes to transform raw components into the final product”, Venus (2011) goes on to posit that “supply chain management (SCM) is a process used by companies to ensure that their supply chain is efficient and cost-effective.” In a bid to ensuring that the relationship between suppliers, consumers and producers is one that yields profits, companies and organizations have to s
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.
In the past, Zara’s main objectives consisted of realizing profits and becoming one of the most recognized fashion houses on a global scale. Its future objectives consist of expanding operations to all corners of the globe, ensuring increased visibility, and, most importantly, embracing more online options.
Zara is one of the leading brands in the retail industry for clothing and apparel. This market has witnessed intense competition among the existing players and also emergence of new players. The pattern of trading is also undertaking a shift due to the use of online medium of transaction for purchase of clothes.
Zara is one of the leading and most popular Spanish clothing and the accessories retailers. It is the flagship brand of Inditex group. Inditex group is one of the world’s largest fashion retailers. The Inditex group owns several brands. Among all of the owned brands, Zara is considered as one of the most popular and accepted brand among the people around the globe.
The paper taqlks about Porter’s Generic Strategy which consists of three different business level strategies, such as cost leadership strategy, differentiation strategy and focus strategy. It is highly important for Zara to consider both cost leadership and differentiation strategy in the business operation processes.
According to Zhelyazkov (2011), ZARA follows a differentiation strategy of Porter’s generic strategies and focuses on enhancing the value chain by developing highly efficient and effective logistics, distribution and supply chain system.
The three key success factors of
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