...3 Competitive Analysis 4 Competitive Advantages 5 Sustainability 5 Recommendations 5 New Product/Service 5 Marketing Strategy 6 Conclusion 7 References 8 Introduction This report is mainly focusing on studies of marketing strategy. By analyzing and discussing the case of Zara, we will be able to have a more in depth analysis of companies and their marketing strategies. In the background section, basic knowledge of marketing strategy will be introduced. In the discussion section, an analysis of Zara’s existing product and service will be listed and an S.W.O.T. analysis is done to figure out the company’s current situation and position in the marketplace. In the recommendation section, a new product/service will be recommended to augment Zara’s brand. Also a marketing strategy will be suggested to improve Zara’s business. Background Firstly, some commonly used terms and their definitions will be introduced in this report in order to provide some basic knowledge and understandings of the principles and studies about marketing strategy planning. SWOT Analysis: This is a strategic planning method which used to evaluate the strength, weakness, opportunities and threats of an organization involved in a certain business. (Friend, Graham. 2009) Competitive Analysis: This is an analysis of the organization’s strength and weakness against its competitors. Competitive Advantage:...
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...Cover Page Business Model Analysis in the fast fashion industry Table of Contents 1. Introduction 3 2. Industry environment of fast fashion 4 2.1 PEST analysis 4 2.2 Five forces analysis 6 2.3 Summary of findings 7 3. Analysis of Zara and H&M 7 2.1 Analysis of Zara 7 2.1.1 Vision, mission and objectives 7 2.1.2 Internal analysis 8 2.1.3 Business model canvas 8 2.1.4 Value proposition canvas 9 2.2 Analysis of H&M 10 2.2.1 Vision, mission and objectives 10 2.2.2 Internal analysis 10 2.2.3 Business model canvas 11 2.2.4 Value proposition canvas 12 2.3 Summary of findings 12 4. Comparison of business models between Zara and H&M 12 4.1 Comparison of business models 13 4.2 Comparison of value proposition canvas 14 4.2 Summary of research insights 14 5. Development of a new entrant 15 5.1 Strategic model 15 5.2 Business model canvas 16 6. Reflection on strategic insights 16 7. Conclusion 17 References 18 1. Introduction Fast fashion is a sub sector of the fashion industry that boasts fast response to consumer demand and efficient distribution of materials and products in the global landscape (Hines and Bruce 2007). Hines and Bruce (2007) also imply that fast fashion could quickly identify and capture business opportunities and transform them into products in a timely manner. As fast fashion retailers need to deliver trendy apparels to end customers, low cost production and efficient distribution become...
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...outsourcing is denied by Zara. This is a good approach towards owned working force and not to get involved in activities that may lead to unethical concerns. Organization has developed a smooth image for quality management process implications in industry and now it is time to unleash new domains for organization. It is not recommended that company should start activities in outsourcing that may led to questions and confusions in current quality management and employee relationship management, but a healthy process that leads to internationalization should be considered. Another option that has been followed by management in last years is to become eco friendly and development of such sales points. The Inditex group has achieved eco-efficient and friendly certificates; a major one is LEED (Leadership in Energy and Environmental design). LEED is a famous and one of the acknowledged certificate and Inditex had got it for Zara Barcelona. Inditex management has mentioned this in its mission statement and following this objective will create a competitive advantage. Competitors are in process of getting this milestone and the group has to make new plans and create more benchmarks in this eco friendship race. Zara has spread a common concept of fast fashion. New style ranges are frequently introduced in market and thus Zara is moving parallel to market trends. Sales persons at stores with PDAs communicate and inform “The Cube” so fast that enables Zara to respond market...
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...The factors that really emulate me is that ZARA business model and concept: Product Development Many competitors rely on a small elite design team that plans both design and production needs well in advance. Stores have little autonomy in deciding which products to display or put on sale because Headquarters plans accordingly and ships quantities as forecasted. Zara’s speed to market in product development exceeds the capabilities of its competitors. This in itself provides additional value to stakeholders, customers, and stores in producing quality clothing at affordable prices .Zara’s product development capabilities are essential to Zara’s business strategy and future success. Strategic Partnerships and Cost of Production Competitors, through outsourcing to Asian countries such as China, sacrifice the benefits of proximity for low labor and production costs. Though there is a cost advantage in their approach in regards to labor, the lack of flexibility in changing orders based on current trends hinders their operational efficiencies. Inventory costs are higher for competitors because orders are placed for a whole season well in advance and then held in distribution facilities until periodic shipment to stores. This proximity effect and the flexibility that it gives Zara is fundamental to their basic concept to respond quickly to shifts in consumer demand and has provided them with a competitive edge in comparison to their peers. Advertising and Marketing ...
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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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...STRATEGIC MANAGEMENT PAPER ZARA Created By: Anggita Sulisetiasih 1006718706 Kenji Wibawa Junardy 1006718990 Patricia M. A. Adam 1006805694 International Undergraduate Program Faculty of Economics University of Indonesia Depok 2013 TABLE OF CONTENTS Chapter 1 4 INTRODUCTION 4 1.1. Company Background 4 1.2. Vision and Mission 4 1.3. Long-term Objectives 5 Chapter 2 6 VISION – MISSION ANALYSIS 6 2.1. Importance (Benefits) of Vision and Mission Statements 6 2.2. Characteristic of a Mission Statement 7 2.3. Mission Statement Components 8 2.4. Vision and Mission Relation: Is It Achievable? 10 Chapter 3 11 EXTERNAL ASSESSMENT 11 3.1 Michael Porter’s Five-Forces Model 11 3.2 External Factor Evaluation (EFE) Matrix 13 3.3 Competitive Profile Matrix 15 Chapter 4 19 INTERNAL ASSESSMENT 19 4.1 Resource-Based View Analysis 19 4.2 The Internal Factor Evaluation (IFE) Matrix 22 4.3 Financial Analysis 27 Chapter 5 33 STRATEGIES IN ACTION 33 5.1 The Strategies 33 5.2 Michael Porter’s Five Generic Strategies 34 Chapter 6 36 STRATEGY ANALYSIS AND CHOICE 36 6.1 The Strengths-Weaknesses-Opportunities-Threats (SWOT) Matrix 36 6.2 The Strategic Position and Action Evaluation (SPACE) Matrix 37 6.3 The Boston Consulting Group (BCG) Matrix 39 6.4 The Internal-External (IE) Matrix 40 6.5 The Grand Strategy Matrix 41 6.6 The Quantitative Strategic Planning Matrix (QSPM) 44 Chapter 7 46 IMPLEMENTING...
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...STRATEGIC MANAGEMENT PAPER ZARA Created By: Anggita Sulisetiasih 1006718706 Kenji Wibawa Junardy 1006718990 Patricia M. A. Adam 1006805694 International Undergraduate Program Faculty of Economics University of Indonesia Depok 2013 TABLE OF CONTENTS Chapter 1 4 INTRODUCTION 4 1.1. Company Background 4 1.2. Vision and Mission 4 1.3. Long-term Objectives 5 Chapter 2 6 VISION – MISSION ANALYSIS 6 2.1. Importance (Benefits) of Vision and Mission Statements 6 2.2. Characteristic of a Mission Statement 7 2.3. Mission Statement Components 8 2.4. Vision and Mission Relation: Is It Achievable? 10 Chapter 3 11 EXTERNAL ASSESSMENT 11 3.1 Michael Porter’s Five-Forces Model 11 3.2 External Factor Evaluation (EFE) Matrix 13 3.3 Competitive Profile Matrix 15 Chapter 4 19 INTERNAL ASSESSMENT 19 4.1 Resource-Based View Analysis 19 4.2 The Internal Factor Evaluation (IFE) Matrix 22 4.3 Financial Analysis 27 Chapter 5 33 STRATEGIES IN ACTION 33 5.1 The Strategies 33 5.2 Michael Porter’s Five Generic Strategies 34 Chapter 6 36 STRATEGY ANALYSIS AND CHOICE 36 6.1 The Strengths-Weaknesses-Opportunities-Threats (SWOT) Matrix 36 6.2 The Strategic Position and Action Evaluation (SPACE) Matrix 37 6.3 The Boston Consulting Group (BCG) Matrix 39 6.4 The Internal-External (IE) Matrix 40 6.5 The Grand Strategy Matrix 41 6.6 The Quantitative Strategic Planning Matrix (QSPM) 44 Chapter 7 46 IMPLEMENTING...
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...According to the point of view of Salgado , Zara is getting bigger and bigger and its operating system getting more and more obsolete. Thus, it gives Zara to have a comparative advantage because for a strategic perspective. Although Zara's advantage over its competitors is not so much a result of IT leverage, the sustainability of its competitive edge might be at risk due to a lack in IT investment.The current assumption for the IT investment states about 18,000 hours. The Zara's staff devoted to IT contains about 50 people divided in several departments. So we can suppose that only 10 people are devoted to POS software and so 10 people are able to handle this project. With a brief calculation, we can figure that it would take too much time to set up this project with an internal team. That is why we are prone to think that externalize would provide a more efficient solution, completely handle by an outsourced professional team. It could be a little more expensive at short and long term that is why if we choose this option we have to integrate a training system of our staff to lower the outsourced fees. An important point is that Zara has always developed its own IT solutions and if we make it through subcontractors we are not sure that it would match with Zara values or way of doing. Zara has been used to make it alone. Thus we think that some member of the IT staff could work with subcontractors in order to lower these expenses and help them to create an It solution...
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...analysis 6 3.1 PESTEL analysis 6 3.2 Porter’s 5 forces 6 3.3 Market Life cycle 7 3.4 Benchmarking 7 4.0 SWOT 8 5.0 Strategies 8 5.1 Generic Strategy 8 5.2 Growth strategy 9 5.3 Logistics and supplier strategy 9 6.0 STP 9 6.1 Segmentation 9 6.2 Targeting 9 6.3 Positioning 9 6.4 M-mix 9 6.5 Profile 10 7.0 2nd question 10 8.0 Conclusion 11 1.0 Intro 1.1 Problem proposal How to develop H&M position on Spanish market and eventually create future growth? 1.2 Strategic questions •What is the problem? Define the demand for high end clothing for woman; increase the number of stores and the sales of products within each of 6 brands. •Why are we doing this? To be at the forefront of both fashion and sustainability •Objectives and goals. To bring fashion and quality at the best price in a sustainable way, with retention of values. •Current performance and where we want to get. There are 6 brands, 3600 stores in 58 markets worldwide and online shopping in 21 countries. Expansion target is to boost the number of stores, each year by 10-15%. 2.0 Internal analysis 2.1 Strategic capability 2.1.1 Resources and Competences 1. Tangible resources: ○ 80% of directly operated stores and 20% of franchising, mostly in North Africa and Asia. ○ Logistic and distribution model which is focusing on rising the investment on longer lasting and raw materials. Energy efficiency and sustainable process of production are very important for this company...
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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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...ZARA Word count: 3799 Table of Contents Executive summary 2 Zara background 3 External factors and competitive forces 3 PESTEL 3 Porter’s 5 4 Internal factors 6 Resources and capabilities 6 Manufacturing 8 Logistics 8 Public relations crisis and their effect on peformance 8 Evaluation of strategic options and recommendation 10 References 12 Appendixes 13 Executive summary This project aims to provide an in-depth analysis of external and internal factors affecting performance of world leading retailer Zara. First of all, the brief background on Zara is provided in order to familiarise reader with the business model they implement. Secondly, the PESTEL framework is utilised as the base for analysis of external environment and its potential effects on company’s performance. Further, the Porter’s 5 forces are identified in order to assess where the competitive advantage stems from. After assessment of external environment, this paper provides the overview of internal factors which might be crucial for success, as well as drawbacks of Zara’s internal organisation. Assessment of internal environment starts from the evaluation of Zara’s resources and capabilities, followed by the critical analysis of manufacturing and logistics processes. Further discussion of the PR issues and its effects on company performance is provided. In addition, the benefits of corporate socially responsible policies are discussed. Overall conclusions on Zara strategic...
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...casting questions on whether its underlying philosophy is about to change as well. Therefore, the purpose of this study is to identify external drivers that might lead to such dynamic changes in the fast fashion model. Moreover, it will be investigated whether these may allude to a possible convergence to the newly emerged slow fashion model which is currently trying to penetrate the fashion market. The international retailer Zara has served as fast fashion representative for this analysis and has been examined for business model adjustments, which might have been triggered by macroenvironmental factors. It was found that especially social, environmental and technological factors have influenced developments in the fast fashion model and that it has indeed adopted slow fashion principles in some of its building blocks to respond to such emerging trends. The future of the fashion industry appears to be tailored by such externalities, continuously reshaping the fast fashion model to eventually arrive at a version that brings a long-lasting competitive edge. However, only time can indicate whether this version will eventually be the result of a conflation of the fast and slow fashion model. Supervisors: Kasia Zalewska-Kurek, PhD. Björn Kijl, MSc. Keywords Business models, business model dynamics, PESTEL, canvas framework, fast fashion, slow fashion Permission to make digital or hard copies of all or part of this work for personal or classroom use...
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...Innovation in the Fashion Industry: A Study of Four Cases 1 Table of Content Introduction Page 3 Page 3 Page 3 Page 5 Page 6 Page 6 Page 8 Page 10 Page 12 Page 13 Page 14 The history of fashion Major trends and developments in fashion Company Selection Analysis of the Companies House of Einstein Zara Fragile TOMS Conclusion Teamwork References Appendix 2 Introduction The history of fashion In order to fully understand where the fashion industry stands today in terms of organizational forms and strategies, we first look at the transformation this industry has gone through. This paragraph will analyze the changes that have occurred in the fashion apparel industry in the past century. We will also discuss some of the major trends that are visible in the fashion industry today. Up until the 1960s, the fashion industry was roughly divided into two groups. First there were firms which were based on mass production, with low costs and standardized styles that did not change frequently (Bhardwaj & Fairhust, 2010). During this time, a large group of consumers was less sensitive to fashion and had a preference for practical, basic apparel. Secondly there was the luxury fashion industry, which originated in France. A small group of French traditional players set up a special ...
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...and manufacturing with distribution, when creating ZARA in 1975 in la Coruña, Spain Zara came under the holding company Inditex in the year 1985 and is today the biggest fashion brand of the group. Zara believes that the prime factors for running a successful business are quick response to customers, use of computers, and disintegrated decision-making (McAfee, Dessain, & Sjoman, 2007) Inditex has a total of 1,558 stores operating in 45 countries out of which 550 stores are of Zara. Inditex’s major sales contribution is Zara accounting for 73.3%. Zara presents new style clothes for Men, Women, and Children along with reasonable prices. (McAfee, Dessain, & Sjoman, 2007) Women clothing accounts for 60% of Zara’s revenue. It has built up a business model to sell the garments by following trends and style, with virtually no advertising and trust the choices of store managers which is called as "commercials" on what garments should to be in stores. (McAfee, Dessain, & Sjoman, 2007) Value Chain Model: Zara currently uses the value chain model (concept originally proposed by Michael Porter), which is helpful to access areas of weakness and strengthen them to achieve profit and competitive edge. This model helps decision-making that can implement IT or add value to the products and services. The chain mainly consists of six Primary activities and three Support activities. (Kroenke, 2012). Problems that Zara might face in its primary activities when its operations...
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...Strategies. Chapter 5. STRATEGY ANALYSIS AND CHOICE. 5.1 The StrengthsWeaknessesOpportunitiesThreats (SWOT) Matrix. 5.2 The Strategic Position and Action Evaluation (SPACE) Matrix. 5.3 The Boston Consulting Group (BCG) Matrix. 5.4 The InternalExternal (IE) Matrix. 5.5 The Grand Strategy Matrix. Chapter 6. CONCLUSION. 6.1 H&M’s Competitive Advantage. 6.2 Vision, Mission, and Strategies. BIBLIOGRAPHY Introduction 1.1. Company Background In 1947 Hennes women’s clothing store opened in Vasteras, Sweden. Today the Hennes & Mauritz (H&M) Group offers fashion for everyone under the brands of H&M, COS, Monki, Weekday, Cheap Monday and & Other Stories, as well as fashion for the home at H&M Home. Their business concept is fashion and quality at the best price in a sustainable way. H&M should always have the best customer offering in each and every market. H&M offers collections that are wideranging and varied for women, men, teenagers and children. To H&M, design, quality and sustainability are not a question of price: H&M should always offer inspiring fashion with unbeatable value for money. H&M ensures the best price by: inhouse design, no middlemen, large purchasing volumes, buying the right products from the right markets, efficient logistics, and...
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