Carmen Lopez Ying Fan Brunel Business School Brunel University Uxbridge UB8 3PH England +44-1895-267239
Internationalisation, fashion retailing, market entry, branding, international marketing, Zara
INTERNATIONALISATION OF SPANISH FASHION BRAND ZARA ABSTRACT Purpose Research on the internationalisation of retailing has been mainly focused on market entry issues. This paper attempts to examine the internationalisation process from a branding perspective using Spanish fashion retailer Zara as a case. Methodology/Approach An in-depth case approach was adopted based on extensive secondary research, which include literature published in English and Spanish as well as company internal documents. Findings The internationalisation of Zara seems to follow the classic “stage model” by firstly entering geographically or culturally close markets before taking opportunities in more distant markets. This global expansion was triggered by both push and pull factors. Compared with the competition, Zara has three distinctions: a) vertical integration to achieve a faster turnaround time; b) using franchise and joint ventures for rapid expansion; c) using store as the main tool for promotion with little spend on advertising. In terms of branding, the firm gives no information about its country of origin, instead aims to make the consumer to believe Zara as a local brand. Research limitations/ implications The main drawback in case studies is that of limited validity and representativeness that constrain the potential for making generalisations. However, this case is deemed sufficient to provide valuable insights and improve the understanding in this area. Originality/value Little attention has been devoted to the internationalisation process from the branding perspective. Aiming to fill in this gap in the literature this study provides important insights into Zara’s internationalisation process. Key Words Internationalisation, fashion retailing, branding, market entry, Zara Paper Type Case Study
INTERNATIONALISATION OF SPANISH FASHION BRAND ZARA INTRODUCTION Despite the increased volume of research on the internationalisation of retailing since the end of the 1980s (Burt and Carralero-Encinas, 2000), attention has been devoted to the internationalisation process from the branding perspective (Moore et al., 2000). As Brown and Burt (1992) stated, “one view of internationalisation is that based on the transfer of a retail brand, with its associated image for consumers across national borders”. Alexander (1997) added that “the image has become an important tool in the internationalisation of a retailer”. Therefore this paper seeks to address this gap in the literature by examining the internationalisation process of the Spanish fashion retailer Zara. This study adopts an in-depth case approach based on extensive secondary research. Literatures published in both English and Spanish have been reviewed, including company documents such as annual reports. The paper is organised into four parts. It begins with a brief overview of the global textile and clothing industry. This is followed by the case study of Zara. The main part of the case examines the key aspects in the internationalisation of Zara, namely: motivations for internationalisation, market selection, entry strategies, and international marketing strategies. In the final section, two of Zara’s main competitors H&M and Gap are also discussed and comparison with Zara made.
The global textile and clothing industry The removal of all import quotas in the textile and clothing industry from January 2005, involving the unrestricted access of all members of the World Trade Organization (WTO) to the European, American and Canadian markets is considered a key driving force in the development of the clothing sector (Keenan, et al., 2004).
This new scenario has created opportunities for largest...