Strategic Management and Zara

?Description of ZaraZara was founded in La Coruna in 1975, which is one of the largest international fashion brands of Inditex. At 1985, the Inditex became the holding company atop Zara and other retail chains. The customer is at the heart of the Zara’s business model. Zara use the same beliefs that quick response to customers, use of computers, and disintegrated decision making were important to build its business.

In the Inditex’s industry, Zara placed a big role in it. It had 550 stores and generated a major portion of Inditex’s sales accounting for 73.3%. Zara offers a great choice of fashion for men, women, and also children.

Without advertising, Zara did really well in selling that following trends and styles.Zara’s core business modal is vertically integrated, it specializes in speed and efficiency and the fast fashion trend. And the information technology is also in the core position, because Zara uses it’s personal application to do the business. However, in 2003, the CEO of Zara must decided whether to upgrade the retailer’s present system and risk the reliability with the current system, or continue with the old one...

? Achievement and core competence?Speed (QR)The respond of Zara is quickly for changing the fashion trends that is really hard to achieve and predict. Most of the companies need 6 months to chang their products, but Zara just needs 2 weeks. Zara wanted to deliver the fashion to the customers rather than persuading them through the marketing.?Decision-makingZara uses the decision-making that means not rely on a small group to decide what to make. It just gave the autonomy to all the employees to delegate on behalf of the company.

The manager can decide what would be on sale and other groups decide the design and production of clothes. This business model can easily to make the decision more locally.?Location and without advertisingZara’s unique approach to advertising and location in the significant factor to its success. Zara maintains a cost advantage over its competitors. This cost advantage helps Zara concentrate on its stores and locations.

Located at center of cities is the Zara’s business model. And also advertising at stores can be the specific activity that people who in the stores could be attracted by the advertising and would have potential purchasing powers for next time, this is kind of cycle.? Problem analysis?Inventory and no reproductionZara has less inventory than other company, it seems that its business has no backlog of goods. However, on the other hand, backlog of goods can be the products with discount, this is an important way to attract customers.

People like paying less money to buy the same products. And also, Zara produces lots of products very little although it is very popular items that could make some customers disappointing.?Higher investment on design and low qualityThe Concept of Zara is provides the fashionable products to the customers, and they change the goods at store every 2 weeks. This business model costed a lot power and financial resources on the design, and because of the value of the market positioning in the middle level, so that quality of the products is limited.

Apparel Industry was controlled by customers, low quality with middle price will be a big problem one day.? SWOT of ZaraStrength: Speed (QR), Decision-making, Location and without advertising, Ability to recreate fashion.Weakness: Inventory and no reproduction, Higher investment on design and low quality, Limitation on services.Opportunity: Global fashion products, Growth of fashion market, Diverse cultural area, produce classical fashion style(Zara style).Threat : Emerging newcomers, Limitation of design? Recommendation?Continue the improvement of QRQR is the core competence of Zara, it made Zara different from the others. Customers were attracted by Zara, because of its rapid change on fashionable products.

Good understanding on the is so significant in the marketing. This business strategy makes the Zara can continue on development and improve its own advantage.?Asian market invasionZara has already shared a great market in European, especially in Spain. But, Zara did not act a big role in Asian. Today, some countries of Asian developed really fast.

For example, China is a big country, it has a huge population and nice market prospect. This can be a good opportunity for Zara to establish its market in Asian, and make the price adjustment and design with culture to adapt to market demand at first.?Zara styleZara has been a professional company in Apparel industry, it design the fashion clothing for trend. However, in the long-term market competition, Zara needs to create its classical style. Depend on the perspective of long-term development, Zara should insists on the trend of fashion at first, and then integrate the Zara style slowly.

This business strategy can increase its core combativeness.