Zara Fashion Industry Analysis

This paper is divided into 4 parts the first page will display an overview of Zara clothing industry, and present the company’s vision and mission. Together with, recognize key elements of the industry’s structure including, the producers, customers, suppliers, and producers of substitute goods. The second page will demonstrate the EFE analysis. Then the third page will detect three possible segmentation variables, and explain each in relationship with the EFE analysis. Finally, the fourth page, will try to answer the question: Is the market or the industry more important to strategy success? Supporting the answer with a real-world example.
Company Background
Zara offers fashionable designs for men, women, kids, accessories. Zara was founded

It is the biggest threats because of new and affordable products from different stores namely H&M, Forever 21, and Mango.
• Lawsuit related to Sweatshops weights 0.05 with rating of 2. This threat is not considered a big threat for the reason that the case is not highly publicized, and the company committed to stop the Sweatshop production in every factory where Zara produce their product despite its location in any country.
• Possible imitation of goods weights 0.05 with a rating of 2. There is a risk of Zara’s products being copied, since Zara is targeting the middle upper class that are weighing on the consumers loyalty who look for best quality product with affordable prices.
• Dilution of broad equity weights a 0.2 with a rating of 4. Hence, it can decrease in its brand value in the customer’s eyes. For this reason, Zara is implementing their best strategies to increase the brand’s equity. They noticed that the European consumer precedence the eco-friendly issue.
As shown on table 1, the EFE matrix result Zara has a score of 3.45 that Zara respond strongly to the opportunities and anticipation of threats.
Market

Example of the market analysis Zara understands the needs and taste of the customer in Brazil differ than the Sweden customer. Brazilian customer need shorts and sandals at any time in the year. While the Sweden customer need boots in autumn and winter. Beside of that, managers recognize the cultural factors. They must be able to understand the similarities and the differences of customers from strict cultures and liberal cultures. At the same time, Zara take in consideration the industry analysis the most compelling evidence, Zara adopted a strategy that helped the company to survive in this competitive industry is the fact that Zara is a vertically integrated retailer. It controls most of the steps of the production designing, manufacturing, and distributing. This tactic allow the company’s self-containment throughout the stages of materials, manufacture, product completion and distribution to all of its stones with locations around the worlds, in a very short period time. Other strategy Zara used after reading the industry analysis is diversification. First, Zara started only a women clothing line few years later, in 2007 it started men clothing line and later other line for