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BAU MBA PROGRAMME 
ZZaarraa-- CCaassee SSttuuddyy Known for its fast, affordable fashion, retail chain Zara has built up a...
Z a r a C a s e S t u d y 
Page 2 
Contents 
Page 
Contents 
Introduction and Background 
Zara's marketing strategy 
Unifi...
Z a r a C a s e S t u d y 
Page 3 
Introduction and Background The competitive advantages of Zara are because of its cost ...
Z a r a C a s e S t u d y 
Page 4 
stores instead." Zara's marketing strategy is very effective because of it’s: 1) Afford...
Z a r a C a s e S t u d y 
Page 5 
Today, the fashion chain has close to 1,500 stores in 70 countries worldwide. Many of t...
Z a r a C a s e S t u d y 
Page 6 
Vertical integration Zara produces up to 30,000 different articles each year. The compa...
Z a r a C a s e S t u d y 
Page 7 
1. Store location: The company always tries to find the perfect location and ensure its...
Z a r a C a s e S t u d y 
Page 8 
This international expansion was increased in the 1990s, with Mexico (1992), Greece (19...
Z a r a C a s e S t u d y 
Page 9 
longer shelf life, such as basic T-shirts, are outsourced to low-cost suppliers, mainly...
Z a r a C a s e S t u d y 
Page 10 
BASIC BLACK. Zara's fast pace means that some popular items appear and disappear withi...
Z a r a C a s e S t u d y 
Page 11 
When in the process of penetrating a specific market, Zara should be guarded on issues...
Z a r a C a s e S t u d y 
Page 12 
interiors and window displays. The stores are therefore Inditex and Zara’s main commun...
Z a r a C a s e S t u d y 
Page 13 
Zara’s business model makes it more profitable than any other retailer. We already kno...
Z a r a C a s e S t u d y 
Page 14 
is based on their sense of fashion and style e.g., contemporary, trendy, classic, grun...
Z a r a C a s e S t u d y 
Page 15 
window displays and in store music, theme and grouping of ensembles to attract custome...
Z a r a C a s e S t u d y 
Page 16 
and meeting less time taking. In addition, they have carefully integrated a good IT- s...
Z a r a C a s e S t u d y 
Page 17 
their reduced business cycle. Not only does Zara attain higher customer satisfaction a...
Z a r a C a s e S t u d y 
Page 18 
Conclusion Zara competitiveness as highlighted in number 4 managed to travel globally ...
Z a r a C a s e S t u d y 
Page 19 
Zara Stores May 13th 2010 [2] 
• Spain: 504 stores 
• France: 118 stores 
• Italy: 90 ...
Z a r a C a s e S t u d y 
Page 20 
External links 
References and media related to: ZARA 
1. Inditex timeline, http://www...
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Zara final search

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International strategy at Zara is defined by the combined generic strategy of cost leadership and differentiation strategy. There are considerations, however, such as when selecting the Lebanese market, labor cost and productivity, distribution cost and shipment cost of raw materials are considered. Other considerations are characteristics or behavior of consumers and income per capita. In terms of marketing approach, the considerations include the 4Ps inherent to the Lebanese consumers and business environment. Market entry considerations include economics, both macroeconomic factors which include tax, political condition and export tariff and microeconomic factors including local competitors, demand and location of store. Regulation from government and local producers protection issues are other considerations.

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Zara final search

  1. 1. BAU MBA PROGRAMME ZZaarraa-- CCaassee SSttuuddyy Known for its fast, affordable fashion, retail chain Zara has built up a multi-billion dollar brand through listening and reacting quickly to its customers BAU MBA PROGRAMME SPRING 2010 Presented to: Professor Dr. Nabila Abass Presented by: Roula Jannoun
  2. 2. Z a r a C a s e S t u d y Page 2 Contents Page Contents Introduction and Background Zara's marketing strategy Unified marketing approach Vertical integration Zara's five-point marketing approach to reach its customers Company history Zara's products-Manufacturing and distribution Zara: Taking the Lead in Fast-Fashion BASIC BLACK. Operation/Expansion Key Success/Failure Factors Learning Points and Recommendations Fast Fashion: ZARA - Zara doing what it does best, Fast Fashion Customer Profiles- Positioning Strategy - Differences in Marketing Strategies for the Different Customer Segments Segmentation Strategy - Targeting Strategy- Positioning Strategy - Differences in Marketing Strategies for the Different Customer Segments Zara's competitiveness Conclusion Reference Appendix of the Case Study attached
  3. 3. Z a r a C a s e S t u d y Page 3 Introduction and Background The competitive advantages of Zara are because of its cost leadership, fast production and product variation. Zara sells quality, fashionable products at reasonable prices and based on product positioning, Zara is cheaper than its leading rivals as Benetton and Gap. Zara also has the ability to design and finish products to be delivered in stores within 4 to 5 weeks hence very quick to get designer-influenced products into their stores. Likewise, the clothing brand has the ability to launch new trends and designs in a much shorter period. Zara thereby boasts for low level of inventory, efficient distribution system and high turnover of product. International strategy at Zara is defined by the combined generic strategy of cost leadership and differentiation strategy. There are considerations, however, such as when selecting the Lebanese market, labor cost and productivity, distribution cost and shipment cost of raw materials are considered. Other considerations are characteristics or behavior of consumers and income per capita. In terms of marketing approach, the considerations include the 4Ps inherent to the Lebanese consumers and business environment. Market entry considerations include economics, both macroeconomic factors which include tax, political condition and export tariff and microeconomic factors including local competitors, demand and location of store. Regulation from government and local producers protection issues are other considerations. Zara is a popular Spanish clothing store that uses a very unique marketing strategy. Because they do not outsource their manufacturing, the company is able to more quickly respond to fluctuating customer demands in fashion trends. Zara's Unique Selling Proposition (USP) is to create or imitate the latest trends within a short two-week period; the new styles are available on sales floors for no longer than 4 weeks. In the case that a product does not sell, its inventory is immediately pulled from the floors and discontinued after one week. Zara is said to have the "most unusual strategy...its policy of zero advertising; the company preferred to invest a percentage of revenues in opening new
  4. 4. Z a r a C a s e S t u d y Page 4 stores instead." Zara's marketing strategy is very effective because of it’s: 1) Affordable prices and 2) Unique response to market demands. Because items move so quickly through Zara stores, customers feel the pressure to buy an item for fear that it may not longer be there next time. Known for its fast, affordable fashion, retail chain Zara has built up a multi-billion dollar brand through listening and reacting quickly to its customers. At a time of uncertainty in global stock markets, there is increasing emphasis on the brand equity of companies, particularly as many decide whether to decrease spending or cushion a fall with continued brand investment. One company that doesn't have to worry too much is global fashion retail chain Zara. It joins household names like Google, Apple, Amazon and Nintendo as one of the fastest-rising brands on the highly regarded Interbrand Best Global Brands listing for 2008. Zara achieved 62nd place this year, a jump of just two places from last year but representing a 15pc increase in its brand value. Interbrand takes many factors into account when ranking the 100 companies on the list, including revenue attributable to the brand (derived from analysts' reports and company information) and the brand's ability to sustain future revenue. Unified marketing approach The first Zara store was opened by Inditex in 1975 in its native A Coruña in north-western Spain. The company made the decision to go down a very non- traditional marketing route at the end of the Eighties. A more conventional marketing approach had been employed prior to that. This change coincided with Zara's entry into international markets.
  5. 5. Z a r a C a s e S t u d y Page 5 Today, the fashion chain has close to 1,500 stores in 70 countries worldwide. Many of the openings tend to be concentrated in the second half of the year. With such rapid expansion and a massive global market presence it's easy to see why a unified marketing approach is the most viable option. "It was not an easy move at the beginning, especially since communication is such an important branch of the business. The decision was made that Zara would no longer talk about itself (through mass marketing campaigns), but would instead let the customer talk about it and so increase brand awareness through word of mouth. It works. Zara's rise continues unabated, with the result that it is now present in almost every continent. The company is currently concentrating on a line of expansion from Poland to Japan. "This is where Zara have room to grow". It follows the company's strategy to prioritize Europe as its No 1 growth market, followed by Asia. Keeping a hands-on approach is very much part of the Zara ethos. "The most important item is the store [rather than the market. Each customer must be heard and we take care of every store as if it were the first one Again, a consolidated marketing effort makes sense in this regard as trying to keep control of individual marketing activity in every single location would prove a tall order to say the least. Success depends on following the strategy to the letter, however, "It's about having the same image, the same customer service, the same specific way of doing things. The result is customer satisfaction. You must pursue the same policy in every single store, you can't afford to have gaps. That's Zara’s philosophy."
  6. 6. Z a r a C a s e S t u d y Page 6 Vertical integration Zara produces up to 30,000 different articles each year. The company employs 200 designers who work in collaboration with each other based on feedback taken directly from in-store customers. The company uses a vertical integration system (devised by Inditex) to fulfil demand for its wares. This business model covers all phases of the fashion process: design; manufacture; logistics; and distribution to its own managed stores. The key is the ability to adapt product to customer demand in the shortest time possible, offering a significant advantage over competitors. There is a much-quoted story that when Madonna played a series of concerts in Spain in 2005, teenagers attending the final performance were able to wear a Zara version of the outfit she had worn at the first show. In fact, the turnaround time for bringing a design concept to the shelves at Zara can be as short as 15 days. All Zara stores receive new product twice a week. This compares favorably with many of the chain's competitors, which usually receive new styles just once or twice each season. The fact that new stock arrives so frequently has several benefits. Most importantly, it encourages customers to come back regularly and, because styles are only available for a limited period, it promotes a sense of exclusivity. The process starts with an order from the store manager. Thanks to the logistics system, the time between receiving the order at the distribution centre and delivering the goods in store is, on average, 24 hours for Europe and 48 hours for the remaining stores. Brand extensions :Zara's traditional business is fashions for men, women and children. Zara's five-point marketing approach to reach its customers
  7. 7. Z a r a C a s e S t u d y Page 7 1. Store location: The company always tries to find the perfect location and ensure its brand is visible to as many people as possible 2. Store window: The first meeting point with the customer and the place where Zara advertises the next season's look 3. Interior design and store image: Has to be right every time. Zara renews this image every six to eight months in all of its stores 4. Goods display: A dedicated team of co-ordinators display the collections by showing off the best trends, fabrics and colours 5. Customer service: Something Zara believes it's excellent at. The aim is to have as much personal contact with the customer as possible. Zara has resisted the industry-wide trend towards transferring fast fashion production to low-cost countries. Perhaps its most unusual strategy was its policy of zero advertising; the company preferred to invest a percentage of revenues in opening new stores instead. Zara was described by Louis Vuitton fashion director Daniel Piette as "possibly the most innovative and devastating retailer in the world." Zara has also been described as a "Spanish success story" by CNN. Company history The founder of Zara, Amancio Ortega, opened the first Zara store in 1975 in a central street in A Coruña, Galicia. Its first store featured low-priced lookalike products of popular, higher-end clothing fashions. The store proved to be a success, and Ortega started opening more Zara stores in Spain. During the 1980s, Ortega started changing the design, manufacturing and distribution process to reduce lead times and react to new trends in a quicker way, in what he called "instant fashions". The company based its improvements in the use of information technologies and using groups of designers instead of individuals. In 1980, the company started its international expansion through Porto, Portugal. In 1989 they entered the United States and in 1990 France.
  8. 8. Z a r a C a s e S t u d y Page 8 This international expansion was increased in the 1990s, with Mexico (1992), Greece (1993), Belgium and Sweden (1994), etc. until the current presence in over 73 countries. Zara stores are company-owned, except where local legislation forbids foreigner-owned businesses. In those cases, Zara franchises the stores. Zara's products As of 2007 Zara stores have men's clothing and women's clothing, each of these subdivided in Lower Garment, Upper Garment, Shoes, Cosmetics and Complements, as well as children's clothing (Zara Kids). Currently their sizing on women's clothing goes to a US size 12 or a UK size 14 or extra large. Manufacturing and distribution Zara is a vertically integrated retailer. Unlike similar apparel retailers, Zara controls most of the steps on the supply-chain: It designs, produces, and distributes itself. Regarding the design strategy, an article in Businessworld magazine describes it as follows: "Zara was a fashion imitator. It focused its attention on understanding the fashion items that its customers wanted and then delivering them, rather than on promoting predicted season's trends via fashion shows and similar channels of influence, which the fashion industry traditionally used." 50% of the products Zara sells are manufactured in Spain, 26% in the rest of Europe, and 24% in Asian and African countries and the rest of the world. So while some competitors outsource all production to Asia, Zara makes its most fashionable items -- half of all its merchandise -- at a dozen company- owned factories in Spain and Portugal, particularly in Galicia and northern Portugal where labour is cheaper than most of Western Europe. Clothes with a
  9. 9. Z a r a C a s e S t u d y Page 9 longer shelf life, such as basic T-shirts, are outsourced to low-cost suppliers, mainly in Asia and Turkey. Zara can offer considerably more products than similar companies. It produces about 11,000 distinct items annually compared with 2,000 to 4,000 items for its key competitors. The company can design a new product and have finished goods in its stores in four to five weeks; it can modify existing items in as little as two weeks. Shortening the product life cycle means greater success in meeting consumer preferences. If a design doesn't sell well within a week, it is withdrawn from shops, further orders are canceled and a new design is pursued. No design stays on the shop floor for more than four weeks, which encourages Zara fans to make repeat visits. An average high-street store in Spain expects customers to visit three times a year. That goes up to 17 times for Zara. Zara: Taking the Lead in Fast-Fashion When it comes to quick response to clothing trends, this Spanish retailer is beating the pants off H&M and everyone else Zara's secret? It moves fast. With an in-house design team based in in La Coruña, Spain, and a tightly controlled factory and distribution network, the company says it can take a design from drawing board to store shelf in just two weeks. That lets Zara introduce new items every week, which keeps customers coming back again and again to check out the latest styles. Zara's success is all the more surprising because at least half its factories are in Europe, where wages are many times higher than in Asia and Africa. But to maintain its quick inventory turnover, the company must reduce shipping time to a minimum. The fast-fashion approach also helps Zara reduce its exposure to fashion faux pas. The company produces batches of clothing in such small quantities that even if it brings out a design that no one will buy -- which happened during an unseasonably warm autumn in 2003 -- it can cut its losses quickly and move on to another trend.
  10. 10. Z a r a C a s e S t u d y Page 10 BASIC BLACK. Zara's fast pace means that some popular items appear and disappear within a week, creating an image of scarcity that many shoppers find irresistible "They've built up an excitement around snapping up new clothes before they go," "As well as keeping sales high throughout the year, it also keeps margin- stripping markdowns to a minimum," Operation/Expansion There are three basic international expansion strategies as entry modes: own subsidiaries, joint ventures and franchising. Zara adopted the first strategy for most European and South American countries which are perceived to have high growth potential and low business risk. The second strategy is adopted for expanding the business in Germany, Italy and Japan. Franchising is adopted on high risk countries such as Saudi Arabia, Kuwait and Malaysia. Which among this expansion strategy is used in penetrating the Lebanese market? Does Zara conform to standardization or customization in its effort to enter the Lebanese market? Key Success/Failure Factors Success factors include cost leadership strategy, differentiation of strategy, efficient distribution, information technology and fast delivery of new products, designs and trends. However, one of the failure factors is Zara’s centralized distribution system which may not be inappropriate in entering a specific market of diverse nature like that of China. Learning Points and Recommendations
  11. 11. Z a r a C a s e S t u d y Page 11 When in the process of penetrating a specific market, Zara should be guarded on issues of local competitions and how it affects global competitions. Zara should be also watchful of product cannibalism and lack of vertical integration. Nonetheless, the clothing brand could consider an online market and establishing a distribution center in the US. Fast Fashion: ZARA Zara as being one of the major international clothing retailers stands out with its business and marketing model. Zara is also often one step ahead of the high-fashion ready-to-wear brands by providing similar garments made with less expensive fabric so prices are much lower. Zara’s business model is characterized by flexibility, which is a production method that fulfils demand in order to manage quick turn-around, limited season stock and at a low price. “The key to the Spanish company's success was a state-of-the-art headquarters with designers, factories and distribution centers all on site, while other retailers moved production to the Far East to save money, Zara knew that it could make best selling clothes faster in Spain”. The secret to Zara’s attraction is that, although shopping there is cheap, it doesn’t feel cheap. The stores are large, smart, modern, swanky and centrally located. The clothes are given room to breathe and unless there’s a sale on, so are the customers. Zara is famous for developing cut price interpretations of catwalk styles and getting them into its stores with breathtaking speed. A designer dress photographed on a model during fashion week won’t arrive in department stores for months, but it can easily appear in a Zara store within three weeks. The company prides itself on never having used any form of advertising. The brand is rather promoted via swanky store locations and smart facades,
  12. 12. Z a r a C a s e S t u d y Page 12 interiors and window displays. The stores are therefore Inditex and Zara’s main communication tool. Everything is streamlined for maximum efficiency. Purchasing, design, samples, pattern-making and visual merchandising are all done in house. Over 50% of the clothes, especially high-fashion items are made in Zara’s own Spanish factories, close to head office. A huge 480,000 square metre warehouse is able of handling 60,000 items per hour, processing orders twice a week to all parts of the world. In 2007 its seven Spanish distribution centres distributed 627 million garments globally Zara doing what it does best, Fast Fashion Each order contains the latest items and those requested by the store managers. The store managers play a key role by monitoring the tastes and demands of their customers, and tailoring their stock accordingly. That’s why no two stores stock the exact same products. Zara’s product managers are in constant contact with the stores, seeking customer feedback and monitoring the popularity of items. They know within a day or two whether or not a product is successful. Zara sources fabric, other inputs, and finished products from external suppliers. It has purchasing offices in Barcelona and Hong Kong. This gives Zara a competitive advantage towards the costs of goods sold, as it can purchase from both Europe and Asia according to prices. Buying more from China in the future might reduce even more the costs of goods sold. This gave Zara further competitive advantage, in terms of both cost and control. Zara also fully owned 20 factories for internal manufacture. These factories apply just-in-time production (JIT). Again, this gave Zara further competitive advantage, in terms of both cost and control.
  13. 13. Z a r a C a s e S t u d y Page 13 Zara’s business model makes it more profitable than any other retailer. We already know from marketing that the retailer gets almost half the price of the commodity sold. So by playing both the role of the manufacturer and the role of the retailer, Zara is definitely much more profitable than the average retailer with similar posted prices. Zara does not compete on price. The usual Zara customer is not very price sensitive. Zara rather competes on fashion they can only do that by having that quick response capability. All the production was fully under control of Inditex. Vertical integration helped reduce the bull whip effect: the tendency for fluctuations in final demand to get amplified as they were transmitted back up the supply chain. Zara could originate design and have finished goods within four to five weeks for entirely new designs and two weeks for restocking or modifying existing products vs. six months for other competitors. Customer Profiles A typical Zara customer as identified by the company is a person who is up to date with the latest developments in the fashion industry and wants fashionable, trendy and unique outfits at affordable prices. The customer can be a man, a woman, a teenager or even a child who is interested in being up- to-date. As Zara has its origins in Spanish fashion and is primarily and European fashion brand, the customers of Zara also are also heavily influenced and moved by European fashion. Aside from this a typical Zara customer can belong to any social strata and demographic segment as Zara caters to a wide range of tastes. Segmentation Strategy The segmentation strategy employed by the fashion retailer Zara is based on the typical demographics of the customers like gender, age and psychographics. However aside from this the company also targets customer
  14. 14. Z a r a C a s e S t u d y Page 14 is based on their sense of fashion and style e.g., contemporary, trendy, classic, grunge, Latino etc. (Safe, 2007) The ethnicity of the brand as well as its target market is blended by Zara in its product offering which match a variety of tastes and settings. Targeting Strategy Inditex with its brand Zara has targeted a wide gap in the retail market. The company targets customers that are interested in high fashion want to be up to speed with the latest fashion trends but are not able to afford clothes and accessories from the couture and high end boutiques. In order to target the market, Zara strategy launches its outlets in high profile locations and provides customers with a turnover time of 4-5 weeks for its new collections made available at a fraction of the couture cost. This, along with the brand persona, the collection of the clothes and accessories and the marketing campaigns pulls the target markets to the Zara stores. Positioning Strategy The main objective for positioning the Zara brand in a market as mentioned by the company is to ‘democratize fashion’. The company aims to provide its customers with trendy and high fashion products at lower prices to accommodate their requirements. As a result the marketing strategy that is employed by Inditex for Zara is to open stores and outlets that provide the Zara experience at high profile locations to set the image of the brand as being trendy, hip, high fashion and accessible. Differences in Marketing Strategies for the Different Customer Segments Zara highly differentiates on the marketing strategies that it employs for targeting the different customer segments of its target market. The main theme of the brand Zara is uber fashion with a fashion guru/fashionista theme which is common for all customer segments. For this the company uses innovative
  15. 15. Z a r a C a s e S t u d y Page 15 window displays and in store music, theme and grouping of ensembles to attract customers Zara's business model improved over time, through the incorporation of technology as they have developed about 95% of the software it uses, Zara fast response to market changes gave them a competitive advantage in creating fashion and satisfying customers plus the fact that the company is getting larger and more global than it has been. Zara did not face the two basic barriers for going globally which are: 1. Costs: that Zara did not incur when entering a new market, as the company does not have extraordinary advertising expenses to create brand recognition. 2. Logistics: which involve being ahead of the curve, volume, SKUs, and delivery points; all are the same in every store which allows the company to take better advantage of real estate opportunities regardless of the market the company is in. Zara gets a competitive advantage by offering the customer fashionable clothes to affordable prices. This is not a pure differentiation since Zara does not charge a premium price for the product. Nor either is it a pure cost leadership since the objective is not to become the lowest-cost producer in the industry. Zara has rather developed a combination of differentiation and cost leadership, and ended up with a successful formula. A short lead-time is important for Zara to be able to offer the latest fashion in store at all time. The reduction in transportation time by having the whole production close to the market give Zara a big lead-time advantage compared to its competitors, which more commonly keep their production in the Far East. The geographical close network by keeping the production close to the headquarters in Europe and keeping the whole team working in the same building might also lead to reduction of the lead-time. Making collaborating
  16. 16. Z a r a C a s e S t u d y Page 16 and meeting less time taking. In addition, they have carefully integrated a good IT- structure. Further, by owning a big part of the facilities they are able to have better control of the production and are always able to reschedule each factories production plan to concentrate on that part of the collection that is most important at that moment. In the fashion industry the customer's demand changes rapidly, and what the customers finds fashionable today might be impossible to sell tomorrow. Therefore, to base the future revenue on always offering fashionable clothes depends on good predictions of customers future preferences. The chance for a miss prediction is quite big and knowing that there is a chance of ending up selling the whole collection on discount, or not be able to sell it at all, the prediction of the next fashion has to be prepared carefully. Zara's short lead-time gives a higher chance for a more accurate predicting the next fashion. This makes them able to meet the customers demand and offer a higher level of fashionable clothes in their stores. It also makes it possible for Zara to have a higher turnover and continuously refresh its stores with new fashion twice a week, this comparing to many of the competitors that refresh their store once a session. Knowing that there will always be new designs in a Zara store, customer will visit the store more frequently leading to more sales. The reduction in lead-time does more than improving the forecasting. It also decreases the level of inventory, which conduct to release of capital locked up in stock, reduce the cost of holding it and the risk of stock going out of date. Zara's choices about how to compete, particularly ones connected to its quick -response capability and the ways in which they create competitive advantage Zara choices to compete have mainly been concentrated on their quick response capability. Their ability to quickly respond to market needs with very short business cycles have given the company a distinctive competitive advantage over the competition. Below is a graph of how Zara choices created a number of competitive advantages for the company: The above model clarifies the huge advantages gained by Zara as a result of
  17. 17. Z a r a C a s e S t u d y Page 17 their reduced business cycle. Not only does Zara attain higher customer satisfaction as they are quickly able to respond to their feedback and needs, but also Zara manages to highly decrease its operating costs as a result of decreased inventory held and thus lower level of risk when new models are introduced. Zara's competitiveness comes from: Innovation: not to stop but always producing new things based on customer desires and changes in market. 1. Segmentation: the company took advantage of unserved segment, a segment where someone might offer good quality fashion at a reasonable price and managed to insert themselves in. 2. Simple strategy: the company is looking for a target without analyzing ages or lifestyles, which simplifies things a lot. It targets buyers who like fashion and that is not limited by international borders. 3. Selection of personnel: having motivated and dedicated personnel, people who think about the company 24 hours a day, people who understood this type of work from the outset. 4. Quick response time that led to significant compression of cycle times enabled by improvements in information technology and encouraged by shorter fashion cycles and deeper markdowns. 5. Experience regarding real estate, personnel costs, hiring and other contract negotiating. However it is difficult to decide that Zara will not step down because there is always uncertainty in the market and the degree of certainty in planning decreases over time but as long as the company continues to maintain the philosophy of adapting to the market and operates from the bottom up, it will not be dropped out.
  18. 18. Z a r a C a s e S t u d y Page 18 Conclusion Zara competitiveness as highlighted in number 4 managed to travel globally successfully. As 55% of Zara revenues coming from abroad, one can see that Zara was successful in migrating its competitiveness globally. By adapting to each culture, Zara has managed to position itself differently in different market. Zara strategy of opening one store for information gathering in the initial phase of entering a new market is one of its key strength points. By starting with such "information gathering" store, Zara manages to obtain insight of the local market and how best to adapt to it. Internationally, the strategy ZARA adopted was to test the market by flagging one store then expanding according to market needs. This strategy helped the fast growth of the company as well as eliminating the risk factors. Moreover, the image ZARA created over the years minimized the need for any marketing activity and the flagged pilot store, based on a prototype, would develop the company brand awareness in the new country. Zara Retailing strategy  To be successful an organisation must have a clear competitive strategy  Distinctive competences based on critical success factors in the value chain are the source of competitive advantage  Each element of the value chain can serve to increase value;  A clear understanding of customer needs, motives and patronage decisions is fundamental to retail strategy  In increasingly competitive markets new ways of hearing, understanding and responding to customer needs are of vital importance
  19. 19. Z a r a C a s e S t u d y Page 19 Zara Stores May 13th 2010 [2] • Spain: 504 stores • France: 118 stores • Italy: 90 stores • Portugal: 82 stores • United Kingdom: 65 stores • Germany: 65 stores • Japan: 48 stores • Mexico: 48 stores • Greece: 47 stores • United States: 46 stores • China: 35 stores • Russia: 32 stores • Belgium: 26 stores • Brazil: 26 stores • Poland: 26 stores • Turkey: 26 stores • Saudi Arabia: 21 stores • Israel: 19 stores • Canada: 18 stores • Netherlands: 15 stores • South Korea: 15 stores • Colombia: 12 stores • Austria: 11 stores • Venezuela: 11 stores • Sweden: 10 stores • Switzerland: 10 stores • Ireland: 9 stores • Romania: 9 stores • Argentina: 8 stores • Indonesia: 8 stores • United Arab Emirates: 8 stores • Chile: 7 stores • Singapore: 7 stores • Czech Republic: 6 stores • Philippines: 6 stores • Hungary: 5 stores • Kuwait: 5 stores • Malaysia: 5 stores • Thailand: 5 stores • Cyprus: 4 stores • Finland: 4 stores • Latvia: 4 stores • Lebanon: 4 stores • Lithuania: 4 stores • Morocco: 4 stores • Norway: 4 stores • Serbia: 4 stores • Slovenia: 4 stores • Ukraine: 4 stores • Denmark: 3 stores • Egypt: 3 stores • Bahrain: 2 stores • Costa Rica: 2 stores • Croatia: 2 stores • El Salvador: 2 stores • Estonia: 2 stores • Guatemala: 2 stores • Honduras: 2 stores • Iceland: 2 stores • India: 2 stores • Jordan: 2 stores • Luxembourg: 2 stores • Panama: 2 stores • Qatar: 2 stores • Slovakia: 2 stores • Syria: 2 Stores • Tunisia: 2 stores • Uruguay: 2 stores • Uzbekistan: 2 stores • Andorra: 1 store • Bulgaria: 1 store • Dominican Republic: 1 store • Kazakhstan: 1 store • Malta: 1 store • Monaco: 1 store • Montenegro: 1 store • Oman: 1 store • Pakistan: 1 store • Puerto Rico: 1 store
  20. 20. Z a r a C a s e S t u d y Page 20 External links References and media related to: ZARA 1. Inditex timeline, http://www.inditex.com/en/who_we_are/timeline Inditex Group, http://en.wikipedia.org/wiki/Inditex_Group 2007 2. Inditex http://www.enotes.com/company-histories/industria-de-diseno-textil-s eNotes overview 3. Zara Official website http://www.zara.com/ 4. ^ Zara: Spanish season http://www.businessworld.in/content/view/898/953/ 5. Zara Fashion http://www.tx.ncsu.edu/jtatm/volume5issue1/Zara_fashion.htm JTATM - North Carolina State University 6. Fashion Conquistador http://www.businessweek.com/magazine/content/06_36/b3999063.htm Businessweek 7. [1] Executive Masters in International Logistics at Georgia Tech http://www.emil.gatech.edu/news-events/article.php?aid=181 8. The Reign of Spain, The Guardian, http://www.guardian.co.uk/g2/story/0,3604,820470,00.html 28 October 2003 9. Zara, a Spanish success story http://edition.cnn.com/BUSINESS/programs/yourbusiness/stories2001/zara/ CNN June 15 2001 10. Zara: Taking the Lead in Fast-Fashion, BusinessWeek, http://www.businessweek.com/globalbiz/content/apr2006/gb20060404_167078. htm?chan=innovation_branding_brand+profiles- 4 April 2006 11. Zara, a Spanish success story, CNN, http://edition.cnn.com/BUSINESS/programs/yourbusiness/stories2001/zara/ - 15 June 2001

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