Zara International Marketing Strategy

Successful International Expansion Strategy of Zara

The purpose of this paper is to diagnose and comment on the successful international expansion strategy of the Spanish fashion brand – Zara. The paper commences with a brief company introduction which is then followed by examining key aspects of internationalisation undertaken by Zara. The main points discussed in here motives for international expansion, market selection, entry strategies and international marketing strategies.

Company Introduction

"Zara's aim was to democratize fashion. In contrast to the idea of fashion as a privilege, we offer accessible fashion that reaches the high street…” (Nash, October 27, 1999)

With presence in 88 countries through 2,085 stores as of 2014- Zara

These were the markets where having total control was considered critical and also feasible.

 Joint ventures: Valuable strategy to enter new markets, especially where a company has had little exposure and in markets with strong local dynamics which are limiting for a foreign company. Such a situation occurred in Italy where a local partner helped Zara in setting up shop as the Spanish company faced resistance from local traders.

Unknown markets or need for a specialist are the other scenarios where JVs are feasible. Those were the objectives behind the JVs in Japan and Germany for Zara. Being cash rich, Zara slowly increased its stake in the JVs despite starting on a near 50:50 partnership in initial phases.

 Franchising: This approach was used optimally for high-risk countries which were totally different in terms of culture and tastes, or had much lower sales potential. For Zara, the franchisees operated identically as an own store on the product range, interiors and supply chain infrastructure usage. However, the franchisees were liable for the setting up costs and recruiting local staff and managing

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. If a product is not selling in the stores, it is immediately pulled from the stores.

Small and regular stock shipments to the stores are designed to keep the inventory low and collection on the shelves fresh; this leads to a sense of urgency with loyal customers to frequently visit the store to check what is new and to make sure they do not miss out.