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Zara: Fast Fashion from Savvy Systems - Essay Example

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This paper presents a brief report on the business strategy of Zara. In order to analyze the business environments, various business analysis tools such as Value Chain, PESTEL, Competitive Forces Model, Financial Analysis, Markets analysis etc will be included in the paper…
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Zara: Fast Fashion from Savvy Systems
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Zara: Fast Fashion from Savvy Systems

Download file to see previous pages... This research will begin with the statement that Zara is one of the prestigious and fast growing fashion clothes retail shop in the world. Starting from a small shipbuilding in Northern Spain, it has grown itself to staggering 68 countries throughout the world with numerous stores opened up in all of the specific countries. Being head by the richest fashion executive of the world Mr. Amanico Ortega, Zara has become a major player amongst the big names in the fashion industry. With its latest design and styles coming into the market almost every week, they tend to keep their customers and competitors constantly on their toes. This is the main reason why they have been able to sustain their demand for so long. However, it is not like Zara is hundred percent accurate in its dealing and is flawless nature when it comes to issues. Some of the issues Zara might face in the future or is facing currently are necessary to be highlighted. Due to their manufacturing and delivery did from a single source in Spain throughout the world, Zara faces an issue of the lack of a fall back in case of an emergency. As they pride on constantly changing the shelves of the shops with new clothes every four weeks, they have to constantly transport new clothing. With the rise in oil prices all over, their transportation costs are rising as well. With the economic downturn throughout the globe, people have started to switch to cheap clothing from other manufacturers such as Wall....
Zara generally focuses on producing a homogeneous product which caters for the global customer base. However, they make slight adjustments to different countries catering to their respective needs and culture. With the opening of their sister shops, they have been able to specialize according to different demographics across the globe (Lopez et al, 2009). The following graph illustrates the different sublets Inditex has opened up and their relevant percentage of inditex. This graph shows the importance Zara holds to the success of Inditex over the years. Source: Adapted from Lopez and Fin (2009). The major competitors for Zara amongst many others have always been Gap and H&M. Both these companies follow a very similar pattern as Zara when dealing with internationalization of their retail outlets. Environmental Analysis For conducting an environmental analysis of Zara, PESTLE Analysis was found appropriate. The reason a PESTLE analyses was deemed appropriate for a huge company like Zara, was because it is one of the largest fashion company in the world and it has globalized to such an extent that you can find Zara across the globe with stores reaching up to 1,723 worldwide including their extended stores (Gallaugher, 2011). Political Internationalization: During 1986 when Spain entered into the European Union, it opened up the entire trading barriers of which Zara took the most advantage. Through the concept of homogeneous products to every country, they continued to expand. They followed a single concept “national frontiers are no impediments to sharing a single fashion culture.” (Lopez et al, 2009). They have had to adhere to various government laws applied in various countries outside Europe for opening up ...Download file to see next pagesRead More
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