The Strategic of Zara - Essay Example

The Strategic of Zara Current Situation The fashion and apparel industry has been a sophisticated one; with globalization and technological innovation, this trend has been heightening in the recent years. Since clothing is a necessity for all humanity, this industry is of great importance and is characterized by a ready market globally. As a result, this industry is full of new entrants and expansions that have in effect resulted in intense competition to be able to meet the varying tastes and preferences of the various market segments served. Another reason why this industry seems to be flooded is that it requires relatively lower capital for establishment of enterprises. The companies operating in the industry are mainly involved in the manufacture and design of various ranges of clothing, footwear and accessories. In addition, these products are distinctive to be able to cater for the needs of men, women and children who may be involved in different activities or even occasions. Zara company is a subsidiary of a Spanish establishment; Inditex Ltd. It is an international company with its presence currently pegged at 86 countries worldwide. With about 1,751 stores in the world’s major cities and towns, the company boasts of being a leader in the fashion segment (Inditex, 2013). One of the concepts the company is well known for is the idea of fast fashion which entails the design and manufacture of new products within the shortest period of two weeks. On a strategic outlook, the company’s mission is based on environmental sustainability which is also its main corporate social responsibility agenda (Zara, 2013). This mission objective is reflected in the company’s major components. To begin, the company operates environmentally friendly stores. Secondly, the company’s products are mostly made from recycled materials and wastes. The company is also committed to sustainability as stressed by its awareness campaign among the staff members. In addition, the company’s fabrics are ecologically friendly and the foot wares are free from PVC. The company also has a policy of utilizing bio fuels for its supply chain operations. All these show that the strategy of the company is geared towards appealing to customers who are increasingly becoming aware of environmental conservation measures. Internal Environment One of the common methods of evaluating a company’s internal environment is through the use of SWOT analysis (Henry, 2008). Zara Company has various strengths and weaknesses. To begin, some of the strengths of the company as depicted in its relative strength in the market include: Originality of the company’s products that has distinguished it from its competitors. The company’s products are distinct in terms of design and this has made them identifiable. The company has dedicated staffs that are committed to personalized customer service. With experts in the fashion and design industry led by the CEO, the company’s human resources is unmatched. The stores and outlets across the globe are fully managed by the company as opposed to licensees and franchises used by other industry players. This has helped the company control the quality of products sold in the outlets. The company has also an admirable production line that is able to produce new products within short timelines. Technology use has been enhanced in the manufacturing segment for efficiency. Costs of the company’s products are relatively lower attracting many buyers. With relatively lower prices, the company’s attract high sales volumes. A well managed supply and value chain that ensures distribution of products required standards. The centralised warehouse acts a is within good regulator in the company’s revolutionalised distribution system. Apart from the company’s numerous strengths, the company still has weaknesses as outlined below: The company is yet to have a good advertising campaign that has had a negative impact on its brand recognition in the world’s market. There is low coverage of the brand in common media forms. With the massive growth in technological innovations, it is disappointing that the company’s online presence is still low. Social platforms have become a good promotion and awareness tool yet the company is not fully embracing this trend. Apart from the identified strengths and weaknesses of the company, it is important to highlight the core competencies of the company. This will be in terms of the value and resources the company has attained within the time it has been operational in the fashion industry as well as the company’s competitive advantages in the industry. First is the company’s heavy investment in the global arena. As mentioned earlier, the company operates in about 86 countries worldwide (Jones and Hills, 2012). All these investment reflects the company’s significant resource in terms of capital invested in the industry noting that it has full control on the various establishments as opposed to resorting to licensing or franchising. Secondly, the company’s value chain has enabled it to establish as a leader in the industry. The company owns a centralized warehouse within its distribution network that has enabled it have full control of its supply chain activities. It is also important to point out that the distribution network is highly invested in terms of technology enabling faster distribution of its products. Apart from the tangible assets, the company has also relative strengths on its intangible assets. For example, the company has a brand identity of being able to generate fast fashion. This is because the company’s manufacturing and design segment is able to develop and deliver new products in the shortest time possible comparable to its competitors in the industry. The company is also endowed with experienced human resources beginning with the company’s chief executive officer. For instance, the company boasts of a 200 person strong innovative team that is inspired by customers’ need for value and quality (Inditex, 2013). Moreover, the company’s commitment to environmental sustainability is a boost to its image given that there has been a push for environmentally friendly products in the recent years due to climate change concerns worldwide. The company’s product portfolio is full of a variety of apparel and accessories for women, children and men from all corners of the globe. The company has a good product positioning strategy with its stores adopting different outlook and set ups that vary with the respective countries or regions of operations. The company has adopted best practice for its daily operations. For instance, the company uses the just in time inventory management technique to ensure that it effectively manages the levels of inventory in its storage facility and deliver the products according to demand. This technique has helped the company to eliminate the wastes associated with inappropriate inventory management. It is also notable that the company’s internationalization strategy has been advantageous for its completion. The company has been aggressively involved in expansion in the recent years with the approach taken including the use of franchises and licenses in far flung markets. As a result, the company has positioned itself as a global leader in the design, manufacture and distribution of fashionable products. It has taken advantage of the fact that fashion cuts across all cultural and social heritages in the world and it is through this motivation that the company’s products have always remained innovative. To conclude, it is clear that Zara Company is an industry giant that needs to check on its weaknesses to maintain its position in the industry. References Henry, Anthony. (2008). Understanding Strategic Management. Oxford: Oxford University Press. Inditex (2013). Zara. Retrieved 5 April, 2013 from http://www.inditex.com/en/who_we_are/concepts/zara Jones, G. & Hill, C. (2012). Strategic Management Theory. London: Cengage Learning. Zara (2013). Mission Statement, Zara Company Ltd. Retrieved 5 April, 2013 from http://www.zara.com/webapp/wcs/stores/servlet/category/uk/en/zara-neu-S2013/18001/Our+Mission+Statement Read More