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Analyse Zara - Case Study Example

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Other firms also choose to outsource with the objective of enabling the firm reduce its costs through specialization and creating efficiency in the labor and resources of the firm (Porter 1996). Other firms also in the efforts to achieve the same try to gain control over the whole firms through as many departments as possible. This they are likely to achieve by the analysis of its value chain. Such firms are said to have gained such controls over the total production process by initiating in-house production hence and achievement of shorter lead times in production and supplies. Zara is one of the fastest growing cloth retailers and it holds a number of shares in the giant Spanish Inditex Group (Folpe 2000). This part of the group in the clothing industry in Spain has developed a unique business model which has enabled it to qualify as one of the vertically integrated retailers. This it has achieved through the identification of its lines of competition over the rest of the retailers. It shapes such competitive edges into strategic issues an act which has enabled the industry to obtain control of every step of the value chain while only outsourcing only cloths with a longer shelf/fashion lifetime (Birger and Stires 2006). The competitiveness and an organization’s focus on strategic issues in the modern business environment has become of age in strategic management of such organizations. A renowned author in this field is Porter through his five forces of competition where he introduced the ideas of competitive strategy, competitive forces and competitive advantage. This model is based on the fact that an organization’s internal environment that is the resources, capabilities, value addition to the value chain are the components of the organization that are most of the time used to account for its core competencies (Birger and Stires 2006). According to Porter’s model; cost and differentiation are the initial two competitive forces that result into competitive advantage to any given organization. Low cost strategy is derived from the vast cost leadership strategy that is coupled with efficiency and stringent controls to costs (Folpe 2000). For example the high profitability and growth that is witnessed in the Zara industry over time is as a result of lower costs of advertising while adopting a flat organizational structure with superior organization systems and well laid down logistics coupled with efficient use of capital. All these are directed towards provision of efficiency (Porter 1996). The company also adopts differentiation as a competitive forces and strategy to make a difference in its operations. As a source of advantage differentiation ensures that unique brands of the products are offered as well as technology, customer service and products all these aimed at making the firm gain a bigger share of the market. Zara industry as one of the famous and fast growing firms in Spain is based on its strengths and speed in designing and merchandising the products in stores. As compared to other firms in the turbulent fashion industry, Zara products are able to reach the stores in a record time of only 5 weeks as opposed to nine months of other firms in the industry (Folpe 2000). This fast response to the market is achievable due to the differentiation strategy in the ...Show more
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Date 1. In-depth analysis of competitive forces and strategic issues shaping Zara industry For any company to sustain long term profitability and growth, it wise for such a company to have the ability of responding strategically to competition hence the need of such a company to identify its competitive forces and shape them strategically…
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