It has been identified that one of the major advantages and strengths of the company is the fact that it can achieve a very rapid link to the market. This affects the appeal that Uniqlo may have for Western distribution channelsand may be the determining reason behind its low number of store locations in the U.
Throughout this expansion Zara has remained focused on its core fashion philosophy that creativity and quality design together with a rapid response to market demands will yield profitable results. One of the key ways in which Zara has achieved a competitive advantage in the market is to bring the lead-time of new products down from approximately six months to just two months, which means customers are able to obtain the very best fashion designs at high street prices.
The corporate level strategies which Zara needs to focus on are doing what it does best, and where it has achieved the greatest efficiency, in recent years. Zara has achieved a position within the market that encourages individuals to look towards the brand as a means of gaining cutting-edge fashion, at a low cost, and the design of these products is therefore critical, if this position is to be maintained.
This presents Zara with a real opportunity to set itself apart from other low-cost retailers, by developing a specific ethical strategy that will enable it to retain a relatively low cost, but also allow it to sell itself as an ethical producer Okumus Delivered twice a week, straight to your inbox.
Tangibly, Inditex, the parent company of Zara, has Zara is able to design, manufacture and sell its products in stores quickly because the company owns many of the vertical factors of production.
Typically, individuals will prefer specific clothes that have a distinct image, when choosing fashion items.
It was founded in Sweden in Zara has managed to ensure that it has a first mover advantage by being able to bring the product to the market, within two months, and this unique selling point needs to be exploited further, if consumers are going to be prepared to pay slightly more, in order to gain access to new products before others Coyne and Sujit Balakrishnan The competitive companies target similar markets but employ different strategies in their business models to manage the distribution of product lines.
Economically, there are huge impacts on the fashion industry, as the world is currently facing a global recession and, as such, consumers are facing difficult choices in terms of how they spend their disposable income.
It is suggested that Zara needs to retain a cost base element, in terms of strategy, as it has gained a large amount of support from high street customers who are looking for fast fashion, at a disposable level.
Get a free 10 week email series that will teach you how to start investing. Consumers require regular updates, particularly at the high street end of fashion, where items are perceived to be somewhat disposable, in order to keep up with the latest trends.
The process of obtaining market information and relaying it to design and production teams expedites product development by shortening the throughput time of a product to weeks from design to distribution.
Drawing on the four forces above, it can be argued that, finally, there is a large amount of competitive rivalry within the industry the fifth and final force. Zara has become recognised as a high-street fashion brand; therefore, any items which are believed to be at the luxury end of the pricing range are unlikely to be accepted by the customer base.
Failure to do so is likely to result in customers turning away from a particular brand, until they renew their product ranges. Business Level Looking more specifically at the business level strategy, it is suggested that certain product lines need to be focused on, in order to keep the look within the high street stores fresh, as well as looking towards new opportunities for improving the supply chain, particularly given the recent PR crisis associated with its supply chain choices.
SWOT Analysis One of the key strengths that Zara has as an organisation is its highly developed supply chain, which enables it to get new products to the market, at a very rapid rate.
Despite this, the organisation is facing continual challenges, both in terms of consumer demand and costs; therefore, a detailed strategic analysis needs to be undertaken, to look at broader forces that are upon the industry and identifying ways in which the company can then use its own strengths and opportunity to establish an even stronger position within the high street fashion industry.
Implementation and Evaluation Throughout the implementation of the business strategies, it is necessary to continuously evaluate whether or not certain avenues of activities are successful and whether alterations are necessary, in order to establish greater efficiencies.
This information can then be used alongside the internal narratives to create the appropriate business strategy for the organisation, going forward. Building the Research Agenda.
The company also uses sporting events to appeal to the general population. Any additional legal requirements, in terms of intellectual property protection, will not only be beneficial to the original design protection but may have the opposite effect and may limit opportunities for new product developments, as imitation and development is often an inherent part of fashion design.
The company also uses sporting events to appeal to the general population. The turnover of products within the store is very high, with an average article of clothing remaining on the shelf for only a month. It has been identified that one of the major advantages and strengths of the company is the fact that it can achieve a very rapid link to the market.
Whilst it is currently the case that Zara has an unrivalled supply chain, it should not be accepted as the forever position and continuous efforts need to be made to improve the supply chain and to form alliances with appropriate third parties. This makes it hard for the smaller new entrant to compete, from a price point of view, but still allows them to offer unique designs, which may then give them access to a market that which would otherwise be closed.
These goals helped to formulate a unique value proposition: Back in August a television programme in Brazil accused the organisation of using sweatshops in order to produce its products through outsourced services.
This has made the market, in general, much more competitive and has encouraged all organisations within the industry to look towards reducing costs and attracting a broader customer base. This means that an organisation such as Zara can retain a large customer base, by continuously improving its range and developing new products, on an ongoing basis.
This report will go on to analyse the external and internal environment within which the organisation operates, before going on to look at crises that have been faced by the company, and to produce a strategic analysis of the company, drawing on all of the above information. Male, Female, Kids Fast Fashion (up-to-the minute trending wear produced in weeks) Designer style at non-designer prices.
Mar 30, · Zara, the major division of the Spanish retailer Inditex continues to change retailing through its rapid, vertically integrated supply chain.
Zara has become the leader in rapid development of. Question 1 Zara s Business Model and Competitive Analysis Zara, the most profitable brand of Inditex SA, the Spanish. clothing retail group, opened its first store in in La Coruña, Spain; a city which eventually became the central headquarters for Zara s global operations.
Company analysis for Zara. Print Reference this. Disclaimer: Competitive advantage of Zara is because didn’t transfer all production to low cost countries, but kept most of them in Spain and Portugal where wages are lower than Western Europe.
With this, it cuts shipping costs, and has more flexibility to answer the consumer’s demands. Zara maintained its long standing practice of providing customers with certainty over pricing.
Zara has adopted a competitive pricing strategy to gain and retain customers.
Competitive pricing is the most suitable for Zara because of its presence globally. This pricing strategy helps Zara to attract more customers on the high street fashion stores.
FIVE FORCES MODEL OF INDUSTRY COMPETITIVE ANALYSIS APPLIED TO ZARA (Source: Michael Porter, ) The Porter's Five Forces Model () will serve as framework for examining the current competitive environment of Zara within the international clothing retail.Zara competitive analysis