Example Of Zara Company Research Paper

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It’s hard to meet someone who does not know to which category of goods ZARA brand belongs to, even if asking those who are far from the textile sector. The secret of success of this particular brand is in the correctly developed strategy that adheres to virtually all employees of the company, from ordinary cutter to senior management. The emphasis is on quality products for the mass market with its not always high family budget, but the irresistible desire to look beautiful and wear comfortable clothes from famous designer brand. Any clothing is produced in various sizes that inspire confidence among customers of different weight class, because they also care about, not only for people sew model parameters.

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ZARA Company, which won the market in record time, is a shining example of a successful strategy in each of its elements. ZARA opted for frequent changes of collections – more than 15 per year (while other clothing manufacturers change the collection once in the season), fashionable trends at reasonable prices, production in Europe (it has no time to transport goods from China or Hong Kong), location of stores in areas with a large flow of people (shopping malls, main streets), “word of mouth” estimation and repeat purchase instead of massive advertising in the media, etc. As a result, it is impossible to copy one of the links of ZARA’s strategy – it is successful only as a complete chain.

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A feature of the brand is the rate at which new lines are pass the way from design to start of sales – usually no more than a couple of weeks, for others it takes a few months. The range of shops is updated every two weeks, forcing customers to return again and again. Very often, when the store is delivered with new items, there is no a single thing from the last collection on the shelves. “Day-Z” is the so-called day of the delivery of goods in Zara stores.

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Features to create new models: Electronic digital cameras are used – pictures taken on the catwalk are sent to shops on the Internet. Each store daily sends to La Coruna special reports, which indicate the most frequent clients’ wishes regarding clothing styles. Access to this information may be obtained through the corporate Internet in real time. In addition, the store manager sends reports that include information on the amount of sales for each item, which allows managers to efficiently manage the company’s range of products and exclude those, which are not in demand, for a week. Patterns developed by designers are ready to be transmitted to the production part.
Features of the distribution system: The company’s products do not spin on international cat walks; they immediately go to the shops and are available for everyone; exceptional importance and quick delivery are crucial aspects of company’s business policy. Products, which are ready to be worn, are delivered from sewing shops in the center of Europe by trucks and planes.
Features of production: after obtaining materials from fashion show cutting new models is beginning immediately. Control of all three stages of the production – designing, sewing and selling clothes –is concentrated in the same hands. Everything is controlled from one center near the industrial center of La Coruña. Continuous improvement of management in terms of quality and product upgrades is advanced; Garment production process takes 10-15 days. All finished products pass the quality check and are sent to one of two distribution centers the company –in La Coruna or Zaragoza. The area of ​​these complexes is about 500 thousand square meters. Taking into account the urgent needs of customers, the company buys raw materials at the lowest prices of cloth, and then uses its own facilities for creation of painting process.

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PESTEL-analysis is a functionalinstrument for researching the market, the company’s position, potential and course of the production. PESTEL-analysis assists the supervisor of the organization or the analyst to realize the image of the exteriorsurroundings of the business, to emphasize the most significantaffecting factors.

The opportunities for ZARA are:

Membership in the EU, NATO and additionalglobalestablishments;
Tax system in Spain;
GDP growth rate;
Inflation rate;
Revaluation of EUR;
Insufficient number of multinational corporations;
Urbanization;
Population growth;
Acceleration of consumption;
Social media interactivity;
R&D;

High-tech products in manufactured exports;

Inditex Animal Welfare Policy.
Threats to Zara are:
Globalization circumstances;
Unemployment rate;
Potential bankruptcy;
Backlog of Spain in the field of innovation;
Acts and laws impacting on the clothing business.
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The essentialfeature of the business is the organization’s model – the layout of manufacture. Generally, all trademarks of reasonably priced clothing are created in factories, located at the third world states by enchantingbenefit of cheap workforce. Two-thirds of Inditexgoods are created in Spain, Portugal and Morocco – particularly when it is aboutluxurious and stylishclothing of exactfashion. Straightforward, fundamentalitems are bought from factories in Eastern Europe, Africa and Asia. ZARA does not withhold on the experience and incomes and depends on the national labor market in Spain. Its available factories permit to succeedin terms ofdeadlines and not to overpay for transportof clothes to Europe.

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Consumers receive precisely the desired at the moment products, and their pleasure with the provided goods is correspondingly high. The dataon innovative tendencies in the organization can be foundindifferent channels, namely some fashion demonstrations, opinion from partners, market investigations, etc. taken information can be instantaneously applied for innovative models. The purpose is that every time the customercomes to the store he finds new fashion assortments in tinyamounts.

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The book “From zero to Zara”, written by Jesús Salgado, who dedicatedit to Amancio Ortega, the founder of Inditex and the textile entrepreneur, was presented only after personal meeting with Ortega. It took Salgado a few years to have this meeting. However, his persistence was satisfied, becausecurrently it is supposed that he was the only person, who was able toexpose the world of mysteriouscharacter of Ortega.

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Ansoff matrix shows four different strategies – the main directions of development in medium-and long-term perspective.
This strategy aims at sales increase by introducing existing products to new markets. There are also a number of alternatives. New segments: address new segments in the same regional market, for example, to offer goods for industrial use in consumer market changing the positioning of a product, sell it to other group of customers; to offer the product in other industries. New channels: implement the item to another network, markedly different from the existing ones. Territorial expansion: to penetrate the other regions of the country or other countries. Market development strategy is based mainly on the distribution system and know-how in the field of marketing.

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Porter’s five forces model of competition is a powerful tool for the systematic diagnosis of the main competitive forces affecting the market, and determine the impact of each of them. The model is not only the most widely used, but is quite simple to use. The purpose of the model is that the organization must search for such a sphere of activity, in which it is protected from the effects of competitive forces, or create a unique business model and profit higher than the industry average. Five forces include existing competitors (industry rivalry); bargaining power of suppliers;“competitors” offering substitute products (threat of substitutes); new competitors – new players in the market (threat of new entrants);and bargaining power of buyers.

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Internationalization drivers researched by George Yip consider market drivers, cost globalization drivers, competitive drivers and government drivers. They occur to encourage companies to establish themselves internationally.

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Consistently implementing the idea of Fast Fashion, ZARA founder Amancio Ortega and his team managed to build one of the most successful brands. The basis for this was the ability to understand what does not satisfy the customers “traditional” business models and the courage to build its business on the weaknesses of competitors.
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References

AnjaAnastasja Keller (2012). Zara Marketing Audit.[pdf].[Online]. Available from <http://www.oeconomicae.com/documents/Author/Marketing%20Audit,%20Zara,%20Arteixo,%20Spain.pdf>
Barnat, R. (n. d.). Strategic Management: Formulation and Implementation. [Online]. Available from <http://www.24xls.com/>
Bilal, N. (2014).Segmented marketing driving Inditex’s growth.[Online]. Available from <http://www.marketline.com/blog/segmented-marketing-driving-inditexs-growth/>
Brooks, I., Weatherston, J. and Wilkinson, G. Globalisation, challenges and changes. (2010). The International Business Environment: Challenges and Changes. New Jersey: FT Prentice Hall, pp. 306-336.
Donquijote (2015).ZARA – Spanish Fashion Shops.[Online]. Available from <http://www.donquijote.org/culture/spain/fashion/zara>
Forbes (2015).ZARA.[Online]. Available from<http://www.forbes.com/companies/zara/>
Global Strategy, n. d. [pdf].[Online]. Available from <http://2012books.lardbucket.org/pdfs/global-strategy.pdf>
Greenblat, E. and Munro, K. (2013).Fashionably fast the key to Zara success. [Online]. Available from<http://www.smh.com.au/business/fashionably-fast-the-key-to-zara-success-20130308-2fr4u.html>
Hunt, S. D., and Arnett, D. B. (2004). Market segmentation strategy, competitive advantage and public policy: grounding segmentation strategy in resource-advantage theory, Australasian Marketing Journal.
Inditex (2014).Annual report of 2013.[pdf].[Online]. Available from <http://www.inditex.com/documents/10279/18789/Inditex_Group_Annual_Report_2013.pdf/88b623b8-b6b0-4d38-b45e-45822932ff72>
JustLanded (2015).Spanish government.[Online]. Available from<http://www.justlanded.com/english/Spain/Articles/Culture/Spanish-government>
Kotler, Ph. and Armstrong, G. (2012).Principles of Marketing, 14th edition, Pearson Prentice Hall.
Sosa, R. (2014). Zara 87 Success Secrets – 87 Most Asked Questions On Zara – What You Need To Know.Emereo Publishing.
Stacey, R. D. (2011). Strategic management and organizational dynamics: the challenge of complexity to ways of thinking about organizations. 6th ed., Harlow, England; New York: Financial Times Prentice Hall.
Steiner, R. (2014). Zara’s fast-paced fashion revolution that pays at till: Storming success for retailer's customer-focused designers. [Online]. Available from<http://www.thisismoney.co.uk/money/markets/article-2799177/zara-s-fast-paced-fashion-revolution-pays-till-storming-success-retailer-s-customer-focused-designers.html>
The Strategist’s Choice (n.d.).The Story of Zara – the Speeding Bullet. [pdf]. [Online]. Available from <http://www.uniquebusinessstrategies.co.uk/pdfs/case%20studies/zarathespeedingbullet.pdf >
Thompson, A. A. and Strickland, A. J. (2003).Strategic management: concepts and cases, McGraw-Hill/Irwin.
Trading Economics (2015).Spain – Economic Indicators.[Online]. Available from <http://www.tradingeconomics.com/spain/indicators>
Wiedmann, K.-P., Hennigs, N. and Siebels, A. (2009). Value-Based Segmentation of Luxury Consumption Behavior, Psychology & Marketing, 26(7), pp. 625–651.
ZARA (2015).Our mission statement.[Online]. Available from <http://www.zara.com/ua/en/company/our-mission-statement-c18001.html>
Annotated Bibliography
AnjaAnastasja Keller (2012). Zara Marketing Audit.[pdf].[Online]. Available from <http://www.oeconomicae.com/documents/Author/Marketing%20Audit,%20Zara,%20Arteixo,%20Spain.pdf>
The Report examines market situation through defining positioning, target market and customer profiles, presents marketing mix, considers competitors’ analysis, gives information about online-service shopping, explains PEST and TOWS analysis.
Barnat, R. (n. d.). Strategic Management: Formulation and Implementation. [Online]. Available from <http://www.24xls.com/>
The work explains the concepts of management, the process of strategy formulation, implementation and control, the role of strategic management in global operations and provides with tools and techniques of strategic management.
Bilal, N. (2014).Segmented marketing driving Inditex’s growth.[Online]. Available from <http://www.marketline.com/blog/segmented-marketing-driving-inditexs-growth/>
The paper considers the segmented marketing approach favored by Gap and its use of multiple brands.
Brooks, I., Weatherston, J. and Wilkinson, G. (2010).The International Business Environment: Challenges and Changes. New Jersey: FT Prentice Hall, pp. 306-336.
The book provides with a broad introduction to the worldwide atmosphere that organizations currently operate. It considers the crucialproblems and establishments within economic, political and legal frameworks, in addition to the effects of social, cultural, technological and environmental developments. As regardsgrowingglobal business surroundings, the book provides with a reallyinternationalviewpoint and extensive and discursive exposure of the exteriorsituation that organizations currently operate.
Donquijote (2015).ZARA – Spanish Fashion Shops.[Online]. Available from <http://www.donquijote.org/culture/spain/fashion/zara>
It describes ZARA’s operation in Spain and in the world.
Forbes (2015).ZARA.[Online]. Available from<http://www.forbes.com/companies/zara/>
A brief information is given about company’s financials and achievements.
Global Strategy, n. d. [pdf].[Online]. Available from <http://2012books.lardbucket.org/pdfs/global-strategy.pdf>
The book highlights the ways companies operate in the international markets, explains strategies of global value creation, global strategies, target markets and entry modes, considers how to globalize value proposition, value chain infrastructure and management model.
Greenblat, E. and Munro, K. (2013).Fashionably fast the key to Zara success. [Online]. Available from<http://www.smh.com.au/business/fashionably-fast-the-key-to-zara-success-20130308-2fr4u.html>
The article provides with the information on key factors of company’s success.
Hunt, S. D., and Arnett, D. B. (2004). Market segmentation strategy, competitive advantage and public policy: grounding segmentation strategy in resource-advantage theory, Australasian Marketing Journal, 12(1), pp. 7-25.
The article describes the importance of market segmentation and provides with the recommendations, which companies should follow in order to attain competitive advantage.Moreover, it disputes that the application of market segmentation encourages public wellbeing by promptingknow-how that advance company-rate, industry-rate, and societal-rate efficiency.
Inditex (2014).Annual report of 2013.[pdf].[Online]. Available from <http://www.inditex.com/documents/10279/18789/Inditex_Group_Annual_Report_2013.pdf/88b623b8-b6b0-4d38-b45e-45822932ff72>
The report presents the main financials, provides with company’s achievements and further plans.
JustLanded (2015).Spanish government.[Online]. Available from<http://www.justlanded.com/english/Spain/Articles/Culture/Spanish-government>
The information is about the political system in Spain.
Kotler, Ph. and Armstrong, G. (2012).Principles of Marketing, 14th edition, Pearson Prentice Hall.
The book is considered as a general guide for marketer to become successful by using appropriate marketing concepts.
Sosa, R. (2014). Zara 87 Success Secrets – 87 Most Asked Questions On Zara – What You Need To Know.Emereo Publishing.
The bookcomprises of 87 responds about ZARA’s activity; broad answers and wide facts and literature, including imminent that have never previously been published.
Stacey, R. D. (2011). Strategic management and organizational dynamics: the challenge of complexity to ways of thinking about organizations. 6th ed., Harlow, England; New York: Financial Times Prentice Hall.
This book discovers and confronts approaches of opinion about strategy and managerial dynamics and posesissueson general and reactive processes, exploiting insights from the difficulty sciences. The objective of this book is to help populace to seem right their personalexpertise of life in companies, to study their personal opinion and to concentrate on and what are their actions.
Steiner, R. (2014). Zara’s fast-paced fashion revolution that pays at till: Storming success for retailer's customer-focused designers. [Online]. Available from<http://www.thisismoney.co.uk/money/markets/article-2799177/zara-s-fast-paced-fashion-revolution-pays-till-storming-success-retailer-s-customer-focused-designers.html>
It explains the crucial factors in companies’ success.
The Strategist’s Choice (n.d.).The Story of Zara – the Speeding Bullet. [pdf]. [Online]. Available from <http://www.uniquebusinessstrategies.co.uk/pdfs/case%20studies/zarathespeedingbullet.pdf >
It explains how ZARA attained sustainable competitive differentiation and positioning.
Thompson, A. A. and Strickland, A. J. (2003).Strategic management: concepts and cases, McGraw-Hill/Irwin.
The book combines the classic business company model with a resource-based view of the organization to provide the readers with a total opinion of how currentorganizationsapply strategic management to set up a continuous competitive advantage. A comprehensive international focal point and instances from over 600 promising and most importantorganizationsput ideas into backgroundinside an attractive, realistic presentation.
Trading Economics (2015).Spain – Economic Indicators.[Online]. Available from <http://www.tradingeconomics.com/spain/indicators>
The statistics about Spain can be found at the website, namely GDP, inflation rate, unemployment rate, population, trade, government spending, etc.
Wiedmann, K.-P., Hennigs, N. and Siebels, A. (2009). Value-Based Segmentation of Luxury Consumption Behavior, Psychology & Marketing, 26(7), pp. 625–651.
Based on a wider viewpoint in consideringconsumer awareness of and stimuli for buying luxury trademarks, it is not satisfactory to give details about the entire depiction of luxury expenditure concerning socially oriented customerstimuli and the wish to astonish others. The crucial contribution here is to discover a multidimensional structure of luxury cost as a common source for defining value-based customer sectors. The practical outcomes can be seen as a first stage in the direction of an improved understanding of customers’ luxury cost awareness as derived from social, individual, functional, and financial aspects.
ZARA (2015).Our mission statement.[Online]. Available from <http://www.zara.com/ua/en/company/our-mission-statement-c18001.html>
The information about ZARA’s mission, vision, values and activity is given.