SWOT Analysis of Zara and Benetton - Term Paper Example

SWOT Analysis of Zara Strengths WeaknessesHigh brand value.High turnover.High quality products.Seamless distribution planning.Ability to recreate new fashion.Lack of effective promotion.Brand recognition is still underdevelopment due to service limitation.Weak online presence.Distribution channel is centralized. Opportunities ThreatsOnline marketing.Business expansion in Asian markets. Decentralization of distribution.

New entrants.Intense market competition.Economic recession.Barriers of entry in global markets.SWOT Analysis of Benetton Strengths WeaknessesWorldwide renowned brand.Financially stability.Good relationship with labours and suppliers.High quality products.Controversial way of advertising.Expensive products.Limited global markets reach except US. OpportunitiesThreatsOnline retail.Adoption of cost leadership strategy.Stable international market demand.

Global Diversification. Saturated clothing market increasing market competition.Competition on prices with other brands.Economic crisis.Comparing and contrasting the SWOT of Zara and BenettonThe strengths of Zara and Benetton are quite similar i.e. high brand value and high turnover. Weakness of Zara and Benetton are bit different. Zara’s weakness is inadequate promotional activities. On the other hand, Benetton’s weakness is lack of strong presence in emerging markets. Manufacturing and distribution centre of Zara is centralized (Simchi-Levi 285).

Opportunity of Zara is to adopt online marketing and decentralize the distribution process. Opportunity of Benetton is to diversify into the emerging markets and adopt cost leadership strategy. Threats of Zara and Benetton are similar i.e. threat of new entrants and price war on similar categories among the firms. In case of Zara, the prices of the apparel are lower-middle ranged which is their strength. But in case of Benetton, the prices of apparel are middle-high ranged which can be considered as their weakness.

Brand recognition of Zara is still under development. But, in case on Benetton it is high.Work CitedSimchi-Levi, David. Designing and Managing the Supply Chain Concept: Concepts, Strategies and Case Studies. New York: McGraw-Hill, 2009. Print.