...Defining the Market The industry that M&S are operating in is the textile apparel industry. This is a highly competitive industry that is constantly changing and it is crucial for companies in this industry to adapt to new trends and customer needs. M&S have a strong focus on consistent quality and high standards. They have been aware of technological factors and social changes within this market and have reacted in particular to the technological evolutions effectively, helping them to achieve one of their core competencies that is, quality. Driving forces in this industry proved difficult for M&S, globalization, the development of casual trends, and accelerating fashion cycles were major evolutions that became prevalent in the textile apparel industry, M&S were not reacting to these factors well and so they were becoming quite lost in their own market. Macro Economic Factors/PEST Analysis. Technological Issues The textile apparel industry is becoming to rely on technology for faster production systems and better quality products. We have seen that M&S have had a successful technological component to their organization, close co-operation with suppliers and the use of the latest technology has been the foundation for achieving the highest quality in their products. The fashion industry is going to keep evolving with the newest technology, it is vital that brands react to this macro-economic factor as it will be what may differentiate you from your...
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...“Marks & Spencer and Zara: Process competition in the textile apparel industry” Javier Martínez Fernández de Valderrama Introducción. En este caso estudiamos a dos compañías, Mark & Spencer y Inditex S.A., pertenecientes al sector de la industria textil. Durante el caso se examinan las cadenas de suministros de M&S y de Zara, marca insignia de Inditex. M&S es un compañía fundada en 1884 en Inglaterra, además de ser una de las empresas textiles líder en Uk, se dedica también a la distribución de comida y muebles. Por otro lado Inditex es una empresa española propietaria de la marca Zara, la cual abrió su primera en 1975 y que ha logrado un crecimiento y expansión internacional mucho más rápido que el de sus competidores. Voy a proceder a responder a las preguntas correspondientes a este caso. 1-- ¿Qué es innovador en Zara? Son muchas las características que hacen sobresalir a Zara como una empresa innovadora dentro del mundo de la moda puesto que ha roto con todos los moldes anteriores y a definido una nueva forma de jugar. La palabra que diferencia a Zara de sus competidores desde sus orígenes es la VELOCIDAD (velocidad de crecimiento, expansión, cambio, adaptación…) todo ello conseguido gracias a una magnifica gestión de la cadena de suministros. La cadena de suministros de Zara es una de las más flexibles dentro del sector, lo que le permite hacer cosas que para los competidores sería imposible. Como ser capaz de lanzar entre 12 y 16...
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...positioning Focusing on 2 clothing brands “ZARA” and “H&M” ZARA Brief Introduction Zara is a Spanish clothing and accessories retailer based on Arteixo, Galicia. Founded in 24 May, 1975 by Amancio Ortega and Rosalia Mera. Zara needs just two weeks to develop a new product and get it to stores, compared to the six-month industry average, and launches around 10.000 new designs each year. Zara was described by Louis Vuitton Fashin Director Daneil Piette as “possibly the most innovative and devastating retailer in the world. 1763 stores, 78 countries in the worldwide. Zara has continually maintain its mission to provide fast and affordable fashionable items. The owner of Zara and five other apparel retailing chains, continued a trajectory of rapid, profitable growth by posting net income of 340 million EU on revenues of 3250 million EU in its fiscal year 2001. Zara welcomes shoppers in 86 countries to its network of 1763 stores in the world`s largest cities. Zara`s Target Market: ZARA target customer is usually aged 18-24, with a mid-range income. As part of his/her occupation fashion trends is usually on top. But not only demographic view ZARA segments its targets, their products are also designed based on a phychographic view based on its customer hectic lifestyle which means that they are usually busy people or with some kind of intense activity which combines with Zara`s tactic, making the customer buy by instinct. ZARA segmentation: Demographic Income: Mid-range...
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...Title of the Report: Zara Case Study Report Name: SeJun Lee Executive Summary Zara is one of the largest international fashion companies in the world, and it belongs to Inditex, one of the world‟s largest distribution groups. This study reviews Zara`s external environment and analyses its internal organisation to make recommendations for improving its core competencies against competitors such as H&M and GAP. This study first reviews the Zara enterprise in terms of PEEST environmental factors, Porter‟s Five Forces and the fast fashion industry life cycle (ILC). The liberalisation of European Union import quotas has had a positive political impact on the fast fashion retail industry. However, rapid style changes generate waste. In addition, recent financial crises have made customers more sensitive to price and tending to buy lower priced goods. However, young people and new Asian customers are more attracted to fashionable clothes. Also, new technology is quickly adopted to survive in a fast-moving market. Using Porter‟s competitive analysis of five forces, the threats of new entrants and substitution are low, and customers‟ and suppliers‟ bargaining power are moderate. However, the intensity of competitive rivalry is quite high because similar fashion firms are competing. Fast fashion has a shorter life cycle for products than most industries. This spurs both creativity and product innovation but demands more efficiency and advanced technology to reduce...
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...INTERNATIONALISATION OF THE SPANISH FASHION BRAND ZARA Carmen Lopez Ying Fan Brunel Business School Journal of Fashion Marketing and Management (2009), 13:2, 279-296 INTRODUCTION Zara is one of the world’s most successful fashion retailers operating in 59 countries. However, there is little research about the firm in English as the majority of publications have been written in Spanish. This paper seeks to address this gap in the literature by examining the internationalisation process of Zara. This study adopts an in-depth case approach based on extensive secondary research. Literature published in both English and Spanish has been reviewed, including company documents such as annual reports. The paper starts with a brief overview of the global textile and clothing industry, followed by the case study of Zara. The main part of the case examines the key aspects in the internationalisation of Zara namely: motives for internationalisation, market selection, entry strategies, and international marketing strategies. In the final section, comparisons are made between Zara and two of its main competitors, H&M and Gap. The global textile and clothing industry The removal of all import quotas in the textile and clothing industry from January 2005, involving the unrestricted access of all members of the World Trade Organization (WTO) to the European, American and Canadian markets is considered a key driving force in the development of the clothing sector (Keenan, et al., 2004). This...
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...INTERNATIONALISATION OF THE SPANISH FASHION BRAND ZARA Carmen Lopez Ying Fan Brunel Business School Journal of Fashion Marketing and Management (2009), 13:2, 279-296 INTRODUCTION Zara is one of the world’s most successful fashion retailers operating in 59 countries. However, there is little research about the firm in English as the majority of publications have been written in Spanish. This paper seeks to address this gap in the literature by examining the internationalisation process of Zara. This study adopts an in-depth case approach based on extensive secondary research. Literature published in both English and Spanish has been reviewed, including company documents such as annual reports. The paper starts with a brief overview of the global textile and clothing industry, followed by the case study of Zara. The main part of the case examines the key aspects in the internationalisation of Zara namely: motives for internationalisation, market selection, entry strategies, and international marketing strategies. In the final section, comparisons are made between Zara and two of its main competitors, H&M and Gap. The global textile and clothing industry The removal of all import quotas in the textile and clothing industry from January 2005, involving the unrestricted access of all members of the World Trade Organization (WTO) to the European, American and Canadian markets is considered a key driving force in the development of the clothing sector (Keenan, et al., 2004). This...
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...Economist, 2005; Crawford, 2000) iii. Low spending on advertising (Nueno and Ghemawar, 2003) iv. Follow market-based pricing strategy (Gonzalez, E., et al, 2003) c. SWOT of Zara III. Comparison of Zara with H&M and GAP The huge competitors of Zara are GAP Inc. and H&M. This part will cover some of basic information of those two competitors and give some comparison with Zara. (Nueno and Ghemawat, 2003) (Palladino, 2010) IV. Thesis Statement To analyze the key factors which influence the Zara’s Internationalization and its success Analysis I. Internationalization a. Theory of Internationalization In this part, the researcher will discuss the theory of Internationalization and why it is important to go international (Rugman, 1981; Tumbull, 1985; Piercy, 1981). b. Implication on Zara i. Motives to go international In this part, researcher will give detail of the push and pull factors that influence Zara to go International (McGoldrick, 1995; McDougall and Oviatt, 1994; Salgado and Blanco, 2004). Push and Pull Factors of Zara Internationalization (McGoldrick,...
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...1. Inditex/Zara history (Explain) Amancio Ortega Gaono began Inditex as a way to bring high fashion apparel to the market at an affordable price. After years working in the apparel retail industry in la Coruña, Spain, Ortega left his job in the early 1960’s to being manufacturing trendy designers pieces in cheaper materials and selling these items to local shops. In 1975, Ortega opened his first retail store, Zara, drawn by its inexpensive, fashionable merchandise, and Ortega expanded the Zara chain quickly. 1980’s Ortega joined with computer expert Jose Maria Castellano to design a highly responsive supply chin that could quickly produce the latest fashions. A team of designers would replicate popular items, nearby factories would produce them, and they would be shipped from a central warehouse to stores. In 1985’s, Ortega restructure the company and named it Industria de Diseño Textil S.A., o Inditex. In 1990’s, Inditex expanded internationally and diversified its brand portfolio. Zara had added childrenswear, and four new brands had been added to the portfolio; Pull & Bear, Massimo Dutti, Bershka and Stradivarius. 2. How important is Zara for Inditex group internationalization process? Explain and make comments Mainly, Zara is the first brand that Inditex had, it have been successfully accepted into the market in different countries and provide a huge opportunities to Inditex to grow up continuously. The limited market growth opportunities at home was the...
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...Case study: Zara, Fast Fashion from Savvy Systems Introduction The poor, ship-building town of La Coruña in northern Spain seems an unlikely home to a tech-charged innovator in the decidedly ungeeky fashion industry, but that’s where you’ll find “The Cube,” the gleaming, futuristic central command of the Inditex Corporation (Industrias de Diseño Textil), parent of game-changing clothes giant, Zara. The blend of technologyenabled strategy that Zara has unleashed seems to break all of the rules in the fashion industry. The firm shuns advertising and rarely runs sales. Also, in an industry where nearly every major player outsources manufacturing to low-cost countries, Zara is highly vertically integrated, keeping huge swaths of its production process in-house. These counterintuitive moves are part of a recipe for success that’s beating the pants off the competition, and it has turned the founder of Inditex, Amancio Ortega, into Spain’s wealthiest man and the world’s richest fashion executive. Figure 3.1. Zara’s operations are concentrated in Spain, but they have stores around the world like these in Manhattan and Shanghai. The firm tripled in size between 1996 and 2000, then its earnings skyrocketed from $2.43 billion in 2001 to $13.6 billion in 2007. By August 2008, sales edged ahead of Gap, making Inditex the world’s largest fashion retailer.[1] Table 3.1 compares the two fashion retailers. While Inditex supports eight brands, Zara is unquestionably the firm’s...
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...INTERNATIONAL MARKETING CASE STUDY ZARA: THE SPANISH RETAILER GOES TO THE TOP OF WORLD FASHION Professor: Jennifer Stack Student: Martina Sekuloska San Sebastian October,2014 International marketing [ZARA:THE SPANISH RETAILER GOES TO THE TOP OF THE WORLD FASHION] INTRODUCTION Inditex is a fashion retailer which dates back to 1963 when it started life in a small workshop making woman’s clothing. Today it has more than 6.460 stores all over the world (Inditex, 2014). Officially it all started with the launch of the first Zara store in La coruña, north-west of Spain in 1975. At that time the textile maker Amancio Ortega decided to open his own store after years of work in the textile industry. This was followed by the brand’s internationalization at the end of the 1980s and the successive launch of several another retail concepts: Pull&Bear, Massimo Duti, Bershka, Stradivarius, Oysho, Zara Home and Uterqüe. Today, Inditex is considered to be the greatest fashion retail group, and its founder Amancio Ortega, the richest person in Spain. Zara is the flagship chain of the Inditex Group which generates nearly 65% of the net sales of the group (Inditex annual report 2013). It encompasses many different styles, from daily clothes, to more formal elegant clothes for women, men and children. This case study tackles the challenges of being the world’s fashion retailer, the sustainability of the competitive strategy, and the group’s internationalization process. ...
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...SAVONIA UNIVERSITY OF APPLIED SCIENCES UNIT OF BUSINESS AND ADMINISTRATION, KUOPIO THE IMPORTANCE OF STRATEGIC MANAGEMENT A case study of H&M Ding Huiru Business Administration Bachelor’s thesis International Business April 2011 2 SAVONIA UNIVERSITY OF APPLIED SCIENCES SAVONIA BUSINESS Degree Programme, option International Business Author(s) Ding Huiru Title of study The importance of strategic management, Case study of H&M Type of project Date Pages Thesis 27.4.2011 59+12 Supervisor(s) of study 1st Antti Iire 2nd Anneli Juutilainen Executive organization H&M in Kuopio,Finland Abstract Hennes & Mauritz (H&M) is a 100 billion Sweden company, engaged in designing and retailing of fashion apparel and accessories. The company offers a range of apparel, cosmetics, footwear and accessories for men, women, children and teenagers. H&M primarily operates in Europe, North America and Asia, and has a presence in over 38 countries. The company is headquartered in Stockholm, Sweden and employs approximately 87,000 people on a full-time basis. This thesis focused on the strategic management of H&M company. The main research problem was to make an in-depth analysis of its marketing strategy and how to implement it. The main research method was a qualitative research by analyzing their company data, annual reports and making interviews with the manager, staffs and customers in Kuopio shop. The thesis starts with a general introduction...
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...products and new competitors rise seemingly overnight, that truly sustainable advantage might seem like impossibility, but there are winners and the Zara chain is one of them. The Zara fashion chain, founded in 1975 in Arteixo, is perhaps the world's most successful clothing chain. Zara has helped its parent, the Spanish firm Inditex, grow from obscurity in the mid. 90’s to the world's third largest pure-play fashion retailer after the Swedish H&M and US-based Gap Inc. with financial performance well ahead of these rivals. With 1021 shops, at 13.04.2007, in 55 countries, Zara appears to have found the formula for success: Give the public what it wants, at the lowest possible price, in the shortest time possible. In order to think about how the firms achieve sustainable advantage, it's useful to start with two concepts defined by Michael Porter: operational effectiveness and strategic positioning. (I) OPERATIONAL EFFECTIVENESS According to Porter, the reason so many firms suffer aggressive, margin eroding competition, is because they've defined themselves according to operational effectiveness rather than strategic positioning. Operational effectiveness refers to performing the same tasks better than rivals perform them. Everyone wants to be better, but the danger in operational effectiveness is in "sameness". At its heart Zara is building on a vertically integrated demand and supply chain, while most other textile chains rely on outsourcing and cheap labor in China. It enables...
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...de la cei mai buni Zara Propunerea Unica de Vanzare (PUV) adoptata de Zara este aceea de a crea sau a imita cele mai recente tendinte intr-o perioada scurta de 2 saptamani; noile stiluri sunt disponibile in vitrinele magazinului pentru o perioada ce nu depaseste 4 saptamani. In cazul in care un produs nu se vinde, acesta este imediat scos din vitrina si stocurile sunt eliminate dupa o saptamana. Se spune ca Zara are cea mai neobisnuita strategie de marketing: politica publicitatii zero; in schimb, compania prefera sa investeasca o cota-parte din venituri pentru deschiderea de noi magazine. Strategia de marketing urmata de Zara este foarte eficienta, datorita: 1) preturilor accesibile si 2) raspunsului unic la cerintele pietei. Deoarece produsele se misca foarte repede in magazinele Zara, clientii simt presiunea de a cumpara un produs, de teama ca nu il vor mai gasi data viitoare3. Strategie de marketing: • Locatii de vanzare premium • Aproape zero publicitate: 0.3% din vanzari pentru advertising (majoritatea competitorilor din industrie investesc aproximativ 3.5% din cifra lor de afaceri in marketing). • Target: 25-35 de ani • Preturi scazute si produse la moda: deoarece produsele au o mobilitate foarte mare in magazine, exista o presiune crescuta asupra clientilor de a le achizitiona repede, ceea ce ii permite retailerului sa discounteze doar 18% din produse, comparativ cu aproximativ 35% in cazul celorlalte companii concurente. M&S Marks & Spencer...
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...Identify the corporate strategy of the clothing retailer ZARA and discuss how the five operations performance objectives support Zara’s corporate strategy. In addition explain the external benefits of these five objectives. Zara is the clothing retailer the best known as a brand of Spanish holding group Inditex (Industrias de Diseno Textil). First Zara store was opened in 1975,in Spain by Inditex father and founder Amancio Ortegas Gaona. It was first step and strong foundation to his success. Zara became most successful brand in fashion industry and it keeps growing and expanding constantly. There are 1721 Zara stores in 87 countries all over the world. All offer great catwalk fashion clothes for reasonable prices. The triumph of this brand has his root in the business corporate strategy which Inditex group applied and based all operation within a company. ‘Corporate strategy concerns all units of the business, covers its business philosophy and ideology, including a basic set of guidelines regarding its business. This guidelines my take into consideration industries and technologies, product and services, raw materials and employee’s skills , countries and geographical locations, market and customers, quality and prices , margins and value –added profits and cash flow, volume and sizes , governmental regulations and export opportunities, or any operationalization of the corporate vision. (Eli Segev, p4 ) Zara’s strategy represent blend of Old Economy and NewTone...
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...THE CASE OF ZARA: PLANNING AND STRATEGIC CONTROL Alexandra Iacob University of Huelva HUELVA, SPAIN 2015 Abstract Zara is a retail company belonging to the Spanish company Inditex Group. Currently, Zara has 1,808 stores in 86 countries. This paper will analyse Zara’s business model, based on innovation and flexibility, as well as logistics chain and the various tools used to recognize the continuous changes in fashion trends and turn them into a product marketable within a few weeks. Compared with the competition, Zara has three distinctions: vertical integration to achieve a faster turnaround time; rapid expansion; and use of the store as the main tool for promotion, with low spend on advertising. This company offered a product design and quality, low price. In addition, resources and competences have allowed develop a different business model, where all processes from product design, to manufacturing, distribution and sales are carried out within the same organization. Key words: Strategic Management, Strategy, External Environment, Michael Porter’s Generic Strategies, Vertical Integration, Balanced Scorecard, Globalization Culture Introduction Company Background Four letters that make up a fashion brand known around the world. Zara is a Spanish brand of clothing and accessories and the foundation of Inditex’s success as well as their first retail format. Inditex S.A. is a Spanish multinational group of textile manufacturing and distribution established in 1975 in...
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