Zara Porter's 5 Forces

result, companies such as Zara can easily switch between suppliers. As noted by Van Dam and Marcus (2012), the bargaining power of customers is determined by their ability to push down prices, switch retailers and not buy products and goods. The bargaining power of customers in the India fast-fashion industry is relatively high. On the one hand, there are numerous consumers who purchase fast-fashion goods and accessories retailers such as Zara and H&M in India (Indian Mirror, 2017, Euromonitor International, 2017a). On the other hand, the growing competition the industry forces fast-fashion companies to compete on price, making switching cost for consumers relatively low (Beamish and Bartlett, 2013).

Substitutes are those products that have

For instance, this theoretical framework does not take into consideration the external business environment, in which a certain origination operates (Larimo, 2013a). That is why it is important to consider the most suitable market entry mood only after a thorough analysis of a firm’s external environment, with the help of the previously discussed Porter’s five forces model and other strategic instruments (Swoboda et al 2015a). Another limitation of the market entry modes framework is that it overlooks the distance factor. In accordance with West et al., (2015c), cultural distance is one of the most important factors that influence company’s assessment of market potential as well as its decision to enter a particular foreign market. Nevertheless, administrative, geographical and economic distance should also be taken into account by companies that are planning to expand their business operations abroad (Asmussen et al,

At the same time, Zara standardises the key elements of its strategy, including location, interior design, store layout, logistics and customer service (Inditex, 2016a). This approach allows for minimising the retailer’s costs and expenditures and ensuring the same level of product quality and brand identity across countries (Lenox et al., 2011c). Similarly to Zara, H&M has adopted certain elements of the adaptation approach. For example, the retailer’s fitting mannequins are made after the measurement of the average German body, which can be viewed as an attempt to adapt its strategy to a specific cultural context (Petermans and Kent, 2016d). It ca be noted that, this fit is sold in all markets in which H&M operates, which demonstrates that the extent to which its adaptation strategy is effective is