Zara Case report - Essay Example

Porter’s Five Force analysis emphasizes that market trends of apparel and fashion industry are comparable to certain other industries and going to be more challenging in near future. The report critically explains the supply chain research as one of the strongest point of Zara; because it’s flexible structure entertains the primary activities to be executed smoothly. Primary supporting activities like human resource management, procurement, and research and development departments play a key role in formulating business and corporate level strategies.

This case study highlights that Zara’s success is based on its low cost and product differentiation strategy. It further suggests that hybrid strategy could be more effectual for the company as it reduces the production cost of high quality products. The report also explains the two sad incidents which took place in recent years and have left a negative mark on the reputation of Zara. At the end of the case study, few suggestions are briefly presented for the further growth or expansion of the company.

The reports also elaborates few techniques i.e. how to implement the internationalization strategy of Zara. In the context of Zara’s global expansion, few steps of corporate level strategy are discussed. By adopting these techniques, Zara can make maximize its speedy growth with respect to different regions. Table of Contents Contents Page No EXECUTIVE SUMMARY 02 1. INTRODUCTION 05 Question – 1: MACRO LEVEL ANALYSIS 06 2.1 PESTEL Analysis 06 2.1.1 Political Factors 06 2.1.2 Economic Factors 06 2.1.3 Social Factors 07 2.1.4 Technological Factors 08 2.1.5 Environmental Factors 08 2.1.6 Legal Factors 08 2.

2 Porter's Five Forces Analysis 08 2.2.1 Bargaining Power of Suppliers: Moderate 09 2.2.2 Bargaining Power of Consumers: Moderate 09 2.2.3 Competition among Existing Rivals: High 09 2.2.4 Threat of New Entrants: Low 10 2.2.5 Threat of Substitutes: Low 10 Question – 2: ZARA VALUE CHAIN 11 3.1 Primary Activities 11 3.1.1 Design 11 3.1.2 Production 12 3.1.3 Logistics 12 3.1.4 Marketing 12 3.1.5 Store Operations 12 3.2 Supporting Activities 12 3.2.1 Company infrastructure 12 3.2.2 Human Resource Management 13 3.2.3 Technology / Research and Development 13 3.2.4 Procurement 14 3.2.5 Cost Factor 14 Question – 3: ANALYSIS OF PR CRISIS 15 4.

1 Sweatshops 15 4.2 Shop-staff Abused 16 Question – 4: STRATEGIC ANALYSIS 17 5.1 Zara Business Strategies 17 5.1.1 Low Cost Strategy 17 5.1.2 Product Differentiation Strategy 18 5.2 Zara Corporate Strategy 18 5.2.1 Market Growth 18 5.2.2 Diversification 19 5.2.3 Vertical Integration 19 5.2.4 Product and Market Development 19 5.3 Recommendations for Future Strategies 20 5.3.1 Hybrid Strategy 20 5.3.2 Growth Strategy 20 5.3.3 Online Retailing 21 5.4 Techniques to Implement Recommended 21 Strategies 5.4.1 Owned Subsidiary 21 5.4.2 Joint Venture 22 5.4.3 Franchising 22 CONCLUSION 23 BIBLIOGRAPHY 24 1.

INTRODUCTION Zara is one of the leading apparel and fashion retail companies which is based at Artexio, Galicia in Spain. It was established in 1975 by Amancio Ortega and Roselia Mera. The company is characterized by its massive infrastructure (almost 1750 stores in more than 90 countries) and flexible internal environment. Zara is beautifully decorated with vertical integration system within the organization which is helpful in designing, manufacturing, transportation, and distribution of the products to the markets.

The system has enabled the company to be less dependent on