I will discuss the Zara in four environment factors. First of all, the political-legal factor. During the history of Zara, there was a macro-political risk in the mid 1980s. In the mid 1980s Spain had already taken part in the EEC, the trade of Spain would be opened to other regions. It means that it will improve the competitiveness of the clothing industry.
Rather than advertising, Zara relies on prime locations and light, airy, Prada inspired store layouts and shop-window displays. Examining the marketing mix for Zara in detail: Product One of the major strength of the company is that it is able to respond very quickly to the changing needs of the customers. The company does not sub-contract the manufacturing process and hence, always is fully in control of the produce. The differentiating sustainable advantage for Zara against its competition is that it imitates or creates the latest trends. In doing that, Zara makes the new line available on the store shelf usually within two weeks.
Perhaps the only competitor able to match the growth and Inditex profitability is H & M (Hennes & Mauritz AB) 4. Part of the strategy they use: drag (pull) the market is immediately provide what the consumer wants instead of doing as the other companies in the same sector which seek to impose across fashion aggressive advertising campaigns. In the case of Zara mass advertising it is almost unnecessary as they are shops, strategically located, its best communication with the public. They invest heavily in remodeling its stores level World every 5 years (something the competing brands do
2.6 ZARA’S Brands success and SWOT analysis: Inditex Annual reports: Sales Distribution-Zara’s sales distribution was 65%, Bershka 10%,Pull &Bear 7%, Stradivarius 6%,Massimo Dutti 7% and Oysho 2%. Active use of stores: 1.Change the store layout in Every 2 weeks 2.Located in the very Center of the City. 3.Using the store to
As a trend Zara, fast fashion is responding quickly to the needs of customers not to force them. This Vertical integration had given Zara competitive advantage on his competitors, his competitors are producing jointly 2,000 to 4,000 as of H&M and Gap. At the time Zara alone producing 11,000 new cloths a year. To coup in the market and to maintain the image of Zara fast fashion. They had to integrate horizontally to open more factories in different countries to ensure maintaining in in low cost too.
1. In order to understand the success of Inditex’s best brand, Zara one has to understand their strategic choices, and at its core this revolves on having a good understanding of who Zara targets, and what makes this brand attractive. Zara’s most important target market can be understood by the use of demographics, they target young (18-40 year old) women, who are price-conscious with a mid-range income, and very sensitive to fashion trends. However Zara benefits from the fact that compared to over more traditional retailer they do not stick only to age segmenting, and lifestyle, which allows them to reach to a much broader market. Using psychographic segmentation, they also target women with a so described “hectic” lifestyle, implying a busy,
Notably, Zara has shied away from the top-down decision-making approach because the company understands that the employees are more inclined to understand the consumer trends. The retail brand has formed a close association with its employees thus ensuring that they also play an active part in decision making. In effect, the company has divided itself into different segments that enable the manufacturers to produce goods that move fast within the
In cost leadership aspect, ZARA conducts little advertising and vertically integrated manufacturing operation and distribution system based on information system. Inside the company, their organization structure is simple and employees work with high participation, so that the whole company runs efficiently. All above allow ZARA to provide products with lower price. ZARA has a flat organization structure, which emphasizes a decentralized decision making approach; The design team are relatively independent; Store managers have more responsibilities. Team structure is important for operating organization
Zara’s relationship with customers. Zara created and maintained a good relationship with the customers. This was through manufacturing clothes that meets the demand, the clothes were delivered on time and at an affordable price of about $27 (Gallaugher, 2010) and shipped very fast to the stores. The company also engaged the customers in product design by asking them questions regarding color, length of clothes among others. As Azhari Osman pointed out during the discussion, technology played a cardinal role in establishing and maintaining customer relationship.
Zara is one of the largest international fashion companies. It belongs to Inditex, one of the world’s largest distribution groups. (Zara, n.d.) ZARA brand can be called an alternative brand in the fashion industry, the fast fashion ZARA created are highly respected and has become a major mainstream. ZARA is one of the popular fast-fashion brands around the world; it sells fashion for men, women and kids, welcoming shoppers in 86 markets with over 1700 strategically-located stores in main cities. (Inditex Group, n.d.) ZARA uses designers as group instead of individual to quick update products at a great extent, besides, company keep low inventory in stock because each new product is supposed to be sold within 10 days.