Expansion of the Spanish Clothing Retailer Zara in

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Expansion of the Spanish clothing retailer Zara in India

Executive Summary
            The main goal of this report is to analyze the environment how Zara wil be marketed and launched in India. Analysis shows that the main problem of the product is to in terms of making the target market know the existence of the product in the country and the competition of the current clothing lines available in the market.             In order to solve such complexities, the solution is to implement strategic marketing approach in terms of advertisement and promotion to make the target market become aware of the existence of the product in the marketplace. In addition, strategic market planning can also be attributed as a better solution to ensure that the product will be introduced effectively. The only problem that is unsolved is to find a company that will commit to the distribution of the product. With this, it is suggested that the organization must be able to use a more effective market planning and strategy which will enhance the market value of the product.

This paper examines the case of the Spanish clothing retailer Zara’s experience of and plans for further expansion into one of the fastest emerging markets in the world, India. It argues that given the unique distribution and production functions of the retailer that possible problems exist for continued expansion in the US market. The problems associated with this given the characteristics of local markets and pressures from rival operators’ means that a recommendation is made for an adjusted international strategy for the company despite its broad successes elsewhere globally.

Introduction

Globalisation has become an essential element of international marketing principles and it has been argued that one of the keys to success in global markets is the effective development and marketing of standardised products and brands (Douglas & Wind, 1987). Jay (2000) suggests that the development of international enterprises is as a consequence of reduced barriers for trading due to developments in information technology. Jones (2002) argues that successful international operations are those which integrate and cooperate in business activities across national boundaries. It is clear that the clothing industry is a significant part of the internationalisation process in terms of the critical growth of the clothing retailing sector in global markets and attendant activities such as global sourcing. The international expansion of Zara is led by its parent company Grupo Inditex which is based in Spain and Zara has achieved an impressive annual growth of 26% over the last five years (D’Andrea & Arnold, 2002). Based in Spain Zara has grown from 180 stores to 1.080 stores in 33 countries and in 2002 150 stores were added in 9 countries and further expansion has been planned and expected. As the biggest economy in the world the American market is an attractive one for Zara and stores located in New York were announced as being successful indicators towards future market penetration. The huge American market and especially the North American marketplace was highlighted as the next move for the company’s expansion plan yet the diversity in this market and high level of competition creates challenges for continued Zara’s success. COMPANY BACKGROUND

Inditex is a global specialty retailer that designs, manufactures, and sells apparel, footwear, and accessories for women, men and children through its chains around the world.  Zara is the largest and most internationalized of the six retailers that Inditex owns:  (Zara, Massimo Dutti, Pull & Bear, Bershka, Stradivarius, and Oysho).  By the end of 2001, Zara operated 507 stores around the world, including Spain. Inditex Group is comprised of over one hundred companies associated in textile design, manufacturing and distribution. The achievements of the company and the uniqueness of its management model, which is based on...
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