Zara Case Analysis
Albert Sedaghatpour
Individual Case Analysis-Zara
7/24/09
Introduction Zara is the flagship chain store of Inditex Group owned by Spanish tycoon Amancio Ortega. The group is located in Spain, where the first Zara store was opened. Zara has opposed the industry-wide trend towards turning fast fashion production to low-cost countries. Possibly its most atypical strategy is its policy of zero advertising; the firm opted to invest a portion of revenues in opening new stores instead. At the end of 2001, it ran 507 stores around the world. While its share of the group’s total sales were anticipated to fall by two or three percentage points each year, it would proceed to be the primary driver of the group’s growth for some time to come, and to play the lead role in increasing the share of Inditex’s revenues.
Problem Statement The primary problem with Zara is its future geographic focus, and how it would expand and grow in other countries. The growth options for the company within its domestic market of Spain seem somewhat limited.
SWOT Analysis
Strengths: Ordinarily the retail industry takes approximately three to five months to come up with a new seasonal collection. Zara takes a counter-intuitive tactic made achievable by their speed. As opposed to guessing on the fashion they ask and observe what the consumer desires and is capable of allocating the product within two weeks to the customers. It pursues trends that are thriving with other retailers and provides an imitation. All of the Zara employees have a PDA which is utilized to collect consumer thoughts regarding its products and what they desire to see in the store. This type of information is extensively collected everyday and sent straight to headquarters. Then recent graduates from fashion institutions are hired to design the clothes that the customers want. These designs are produced and shipped out to the retail stores in as little as ten days. All of this occurs in Spain, with no outsourced manufacturing.
Individual Case Analysis-Zara
7/24/09
Introduction Zara is the flagship chain store of Inditex Group owned by Spanish tycoon Amancio Ortega. The group is located in Spain, where the first Zara store was opened. Zara has opposed the industry-wide trend towards turning fast fashion production to low-cost countries. Possibly its most atypical strategy is its policy of zero advertising; the firm opted to invest a portion of revenues in opening new stores instead. At the end of 2001, it ran 507 stores around the world. While its share of the group’s total sales were anticipated to fall by two or three percentage points each year, it would proceed to be the primary driver of the group’s growth for some time to come, and to play the lead role in increasing the share of Inditex’s revenues.
Problem Statement The primary problem with Zara is its future geographic focus, and how it would expand and grow in other countries. The growth options for the company within its domestic market of Spain seem somewhat limited.
SWOT Analysis
Strengths: Ordinarily the retail industry takes approximately three to five months to come up with a new seasonal collection. Zara takes a counter-intuitive tactic made achievable by their speed. As opposed to guessing on the fashion they ask and observe what the consumer desires and is capable of allocating the product within two weeks to the customers. It pursues trends that are thriving with other retailers and provides an imitation. All of the Zara employees have a PDA which is utilized to collect consumer thoughts regarding its products and what they desire to see in the store. This type of information is extensively collected everyday and sent straight to headquarters. Then recent graduates from fashion institutions are hired to design the clothes that the customers want. These designs are produced and shipped out to the retail stores in as little as ten days. All of this occurs in Spain, with no outsourced manufacturing.