Strategic Perspective - Zara Case Study Essay Example | Topics and Well Written Essays - 3750 words

Strategic Perspective - Zara Case Study - Essay Example Presently, ZARA is present in more than 73 countries worldwide and has been expanding at an accelerating pace on an international level. Currently, the group has about 6009 stores which are widespread in 86 markets; it implies that it is operating in four hundred cities in five continents. The net sales of the company as of 2012 were â‚ ¬15,964 million and ZARA has contribution of more than 30% in the total profit amount (Inditex, 2013a). The mission of the company is to offer all the customers a distinctive range of options for making a wise choice in the fast fashion industry. The brand ensures that the offerings comprise of inimitable and innovative products for enhancing the shopping experience of all customers. The store provides the uniquely designed products at reasonable prices that are created from excellent quality materials in accordance to the latest market trends (Zara, 2013). In order to understand the business environment in which ZARA is operating, it is crucial to monitor the changes that are taking place so that the retail store remains competent and proactive in its approach. As the customers of the fashion industry are always looking forward for fresh, modern and distinctive products all the time, ZARA has ensured that it develops its core competence in the manufacturing process (Bhardwaj & Fairhurst, 2010). Most of the clothing companies have to encounter problems in efficient management of their production procedure; ZARA has outclassed in this area by employing a supply chain system that is efficient, agile and capable of producing zero defect products (Hume, 2011). Hence, the store ensures that it is well-aware of the industry requirements and standards but it creates its own way of managing the business operations. The business model of ZARA is so competent that the rival companies cannot copy it at all and it is the primary source of

See attachment Essay Example | Topics and Well Written Essays - 3000 words

See attachment - Essay Example According to Torun(2007, p.7) acknowledges that Zara direct rivals in Europe are H &M, although the latter does not manufacture their products but rather outsource such services to low cost nations in the Far East. Gap is also a big competitor in the apparels and fashion industry. In the year 2008, Inditex had edged past Gap in terms of sales to emerge as the world’s largest fashion retailer (Welters and Lillethun2007, p.541).   Zara’s organizational Structure and Culture The employees at Zara have come to recognize that they are operating in fast changing world of fashion where a product can move from being trendy to staple in just a week. The owner of the company, Amancio Ortega, he likened the fashion industry to that of food by describing the industry as one with perishable goods (Casillas, Acedo and Moreno 2007, p.129).   At the company, the employees work like bees in a hive- as a team to get the work done successfully and quickly. When they are trying out new products, the design is performed, clothes prototyped and criticized in a very short time, normally in a few hours (Dunne, 2013). Brand perception and global visibility While competitors fall, Zara is going through one of the quickestinternationalgrowth the fashion globe has ever seen, opening a store a day and entering new markets worldwide – 68 countries so far and the chain’s profitability is among the highest in the industry. In the year 2012, Zara was ranked at position 37 a forty two percent increase from position 64 they had attained in the year 2005, and according to the global ranking site, its star will continue to rise as they continue to enter newer markets (Interbrand, 2013). Zara as a fashion brand is easily distinguishable from other fashion brands due the speed at which ne collection are launched, the premium price of its commodities and the premium locations of its stores in major cities. Which means that the company is not only providing their custom ers with a basic need that is clothing, but also their customers demand for self-actualization- putting on what they feel portrays their image. Every human being feels self-actualized when associated with a high performing product that has a high brand value (Mathews, 2006). For example, the name Zara easily comes to mind when one mentions the prime locations in cities that the company is associated. Zara’s brand reception all over the globe has been phenomenal over the last couple of years to say the least, for instance in New Delhi, India, when they opened a shop in the high end district, they have been recording staggering sales over the year(Jacoband Mamgain, 2011)). Trading and Business Partnerships Zara is a vertically integrated firm, which means that it controls it most of its economic activities from manufacturing to retailing. It swathes all the facets of the fashion development: design, production, logistics and circulation on its own administered retail shops. Acc ording to the owner, the firm produces almost fifty percent of its product. When entering new foreign markets, Zara has been known to enter into a new foray either through subsidiary, joint venture or through franchising (Sorge