The largest and most internationalized chain of Inditex . Founder Amancio Ortega Gaona
La Coruna, in 1975 “ Medium quality fashion clothing at affordable prices” 1980 adjoining markets 2001 became international
Presenting By: Name: ID: Sadia Tasnim 072 626 030 Jaker Jahan Shuvra 081 179 030 Ahsan Al Bari 061 325 030 Rabita Binte Shams 072 588 030 Al Amin Redwanur Rahman 081 162 030 Rishad Ishtiaq Habib 053 043 530 Iftehajul Islam 081 359 030
Legal system act on business
Cross Border Marketing In our early discussion we notice that ZARA Fashion international clothing store in more than 32 countries. Each country has uniqe legal policy those affect to ZARA Fashion’s business strategy.
In large number of 32 countries store ZARA fashin always pick the much flexible option and it can vary country to country.
Retailing Retailing activity is quit local and there is no bullet system single retailing strategy whole over the world. World wide retailing has relatively globalize particularly the fashion segment. Retailing chain had been most successful in UK where US market remained major challenge . Retailing activity is quit local and there is no bullet system single retailing strategy whole over the world. World wide retailing has relatively globalize particularly the fashion segment.
Retailing chain had been most successful in UK where US market remained major challenge .
Market Entry Enter country where relatively easy to enter.
No legal boundaries or taxes.
In some country it’s a major barrier in foreign direct investment. In that case ZARA Fashion follow some affective policy to over come those legal policy.
The social element those affect to ZARA Fashion’s business
Global Chain Shop ZARA Fashion is cross border chain shop. So its social culture vary country to country. 507 stores around the word where is no similarity.
Labor cost is based on local payment rate
Social Culture ZARA Fashion enter always Hi-profiled country where low bisiness risk. So easily can say cuylture around business is so modern and consumer are also updated. Though it’s a competion market but very easy to lunch new product.
Technology >>> Use of technology from 1970’s >>> Coping with the change >>> Just in time manufacturing system. >>> High-tech distribution system.
Economical 507 stores around the world . 488400 square meters of selling area. $1050 million Company’s capital.
Economical Cont……… During fiscal year 2001, 441 million on sales of 2477 million Invested in manufacturing Logistic IT just-in-time manufacturing system
Economical Cont……… World Co’s net margins 2% of sales but Zara’s net margins 10% of sales ( fiscal year 2001 ) largely because of selling, general, and administrative expenses that swallowed up about 40% of World Co’s revenues VS about 20% for Zara.
Company Background By the early 1980s,Ortega formulated a new type of design and distribution model.
By the early 1980s,Ortega formulated a new type of design and distribution model.
Company Background Cont. Castellano, A computer expert joined Ortega in 1984. In 1985, Castellano joined Inditex as the deputy Chairman of its board of directors.
At the end of 2001, Zara became the most internationalized as well as the largest of Inditex’s chains
Key competitors Founded in 1969 in San Francisco.
International expansion in 1987.
Key competitors Founded in 1947 in Italy. Outsources all its products.
More than 50% revenue is earned from outside of home country.
Key competitors Incorporated in 1965 in Italy . heavy investment and control over production activities .
products mostly sold by licensing .
Business Structure….. Raw materials Logistic Finance Manufacturing plant Expansion Real estate International
Foreign market selection criteria New country markets that resemble Spanish market
Possess a minimum level of economic development
Market Analysis A commercial team from the headquarters conduct both the macro and micro analysis of the market. Macro analysis is focused on local macro economic variables such as: tariffs, taxes, legal cost etc.
Micro analysis is performed onsite and focused on variables such as demand, channels, store locations, competitors etc.
Market Entry If the commercial team’s evaluation becomes positive…then the next possible step would be to assess:
“ HOW TO ENTER THE MARKET?”
Modes of market entry Zara used three modes of market entry internationally:
Company owned stores (Spanish stores)
Problems & Challenges Most serious threat to Zara fashion is to sustain its success and maintain its growth rate Expanding operations in different regions (America, Asia, Europe etc.), requires Addressing different fashion trends at a time. (i.e. given different sizes/ trends in different regions,
Pulling a new fashion cloth or apparel from one region and putting it in other region is a challenging task itself
Problems & Challenges (Cont’d) Zara also has the inability to penetrate American apparel market. This may be due to the American taste differ from the European taste. Zara requires joint-ventures & acquisition of small chains to scale up its operations. However In a 50:50 joint venture, it is very difficult for Zara to impose its business model to the other The company could not acquire large market shares in the domestic market
Local retailers may follow Zara's formula to success and can emerge as big threat to its success.
Recommendation Invest in Internet Retailing
Less expansive in developing countries
Conclusion Zara and the fashion industry In order to sustain in the leading position
Create new ways of marketing