Zara Project Report
Business 201, Section 1
Professor Eli Berniker
May 20, 2007
Table of Contents
Introduction to the project: p.3
Intro to Zara: p.3—4
Business Vision: p.4
Target Market: p.7—8
Business Start—up and Operation: p.8—14
Future Growth: p.14—15
Invest Recommendation: p.15—16
Why we choose Bank of China to get our initial fund? p.16
This report is a comprehensive plan to open a Zara clothing in Suzhou, China
Introduction to Zara
Zara was founded by Amancio Ortega in 1963. The business began as a small outfit producing lingerie items. The first Zara retail store opened in 1975, and was known for selling low-priced imitations of more up market fashion trends. Today Zara accounts for approximately 80% of the total sales of its parent company, Inditex Group. (Brand Watch Zara, 2004, p.2). There are 4 main processes within Zara’s value creation: designing, sourcing and manufacturing, distributing, and retailing. Zara has several competitive strengths, such as a quick inventory response time. Most apparel retailers receive weekly shipments of new inventory； however Zara stores receive shipments biweekly. (Brand Watch Zara, 2004, p.4) Zara is also able to respond to emerging fashion trends very rapidly and as a result in some respects Zara is a leader in the fashion industry. Many believe that if you want to know today’s fashion trends, just go look at the window displays of a Zara store. The window displays at Zara stores are another aspect of the business that makes it unique. Zara spends almost nothing on conventional advertising, as all of its marketing is found in its stores. Zara designers create prominent window displays that are visual attracting to consumers. The company carefully selects sites for new stores so that the window displays are positioned in the most visible location possible. (Zara Reconstruye el Imperio Español, 2003). Another factor that has contributed to the success of Zara is a large amount of word-of-mouth advertising between existing and potential customers. Zara stores feature a wide variety of different clothing items and styles, but usually have a limited quantity of each item. When shopping in a Zara store consumers develop a sense of
urgency, as a product they like in the store right now might not be there next time they visit. As a result, customers of Zara are less hesitant to make purchases.
The Zara store in Suzhou will bring individuality to the market, just as Zara has done in other markets throughout the world. Zara is a unique store and with a unique business model and that will be continued with the store in Suzhou. The success of the store will be built on the past experiences of other Zara stores worldwide. Zara has proved that a business can still be successful even if it gives little or no effort to traditional advertising. Envisioned in this business will be a continued ability to restock and respond to customer needs within days. Doing so gives Zara a competitive advantage over the competition, as the industry average allows for weeks or even months for new products to be released.
The business will always be operated with the following mission statement in mind: ZARA is committed to satisfying the desires of our customers. As a result we pledge to continuously innovate our business to improve your shopping experience. We promise to provide our customers with new designs that are affordable, made from quality materials, and follow the latest fashion trends.
The new store will be opened in Suzhou, China. Suzhou is large metropolitan area roughly 3,500 square miles in size and located approximately 55 miles east of Shanghai. The population is about 11 million, of which 5 million have come from other...