ZARA Case Study

Fashion

ZARA

-

-

Objective/expectation

+

Price

+

Fashion

ZARA (new)

-

-

Competitive advantage,

Strategies and Objectives

•Porter’s Generic Strategy:

Competitive advantage,

Strategies and Objectives

• Porter’s Generic Strategy:

Zara are placed on board market scope. Zara provided

leadership strategy and differentiation strategy,

cost

to win the competition. Zara compete at

combined it

leadership strategy, so

reasonable price by build cost

even they set at reasonable price they still could gaining

reasonable margin. And develop differentiation strategy,

in this case ability Zara to design and finishes product

within 4 to 5 weeks (unique competences).

Competitive advantage,

Strategies and Objectives

• Objective

• Continues and possibly to go further with time

cycle of generate design, finishes product and

distribute it.

Competitive advantage,

Strategies and Objectives

4 to 5 weeks

“Fastest”

Transform

Competitive advantage,

Strategies and Objectives

• Strategies

Value Chain Framework

MIS

Production

Objectives

Marketing

Design

Competitive advantage,

Strategies and Objectives

 Strategies

Production & Distribution

• Maintain quality

• Cost leadership

• High bargaining power to supplier

• Distribution system  Fast distribution

Marketing

• Market penetration

• R & D

• Market, location of stores, consumers behavior

analysis

Competitive advantage,

Strategies and Objectives

MIS (management information system)

• Order information flow  stores’ ordering system

• Improving inventory system

• Product distribution system

Design

• Coordinate with R & D and also with stores itself to

get the new trends

• Ability to produce new design and trend

International Strategy

• Market Entry

 Consideration

• Economics

– Macroeconomics Factors:

» Tax, political condition, export tariff.

– Microeconomics Factors:

» Local competitors

» Demand

» Location of store

• Government

– Regulation from government

• Barriers

– Local producers protection issues

International Strategy

• Marketing Approach

– Consideration

• 4 P consideration  Product, price, promotion and

placement. Each country has different marketing

approach.

– Product  local preferences, design, trends.

– Price  different pricing strategy for each country.

For example: Italy and Paris has no problem for

price but quality-oriented, but German has sensitive

price.

– Promotion  different promotion strategy for each

country.

– Placement  efficient distribution, location of stores

SWOT Analysis

Strength

Weight Rating

Weight

score

Internal Factors Analysis

Cost leadership strategy

(standardization)

Different Strategy (customization,

unique competences)

Efficient distribution

Information Tech

Fast delivery of new products, design

and trends

Weaknesses

Centralized distribution system

TOTAL

0.2

0.2

0.1

0.1

0.3

0.1

1

4

4

3

2

4

3

0.8

0.8

0.3

2

1.2

0.3

5.4

SWOT Analysis

Opportunities

Global market penetration

Online market

Distribution center in the US

Threats

Local Competitors

Global competitors

Product cannibalism

Lack of vertical integration

TOTAL

External Factors Analysis

Weight Rating Weight score

0.3

0.1

0.05

0.1

0.3

0.05

0.1

1

4

2

2

3

4

1

3

1.2

0.2

0.1

0.3

1.2

0.05

0.3

3.35

Resolution to grow

the Zara chain in best

• Change the system:

• centralized transform decentralized

– Build decentralized distribution and production

in each region (Asia, Europe and America, more

is better) to highly penetrate new market and

tend to decrease the complexity of process.

– Moreover, would tend to fastest in producing

new product (design, production and distribute)

– Keep maintain the value chain, nothing to

it should be expanded in each

change but

district/region.

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