Zara Fast Fashion: Executive Summary

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Hong Kong Baptist University

Semester 1, 2007-2008

BUS 3200 Strategic Management

Case Assignment

Zara: Fast Fashion

NG Pui Yan, Ivy 05003539
CHAN Chi Cheuk, Sunny 05006856
CHUI Yuen Shan, Cora 05017041
LOK Ka Pik, Capi 06004911
GUENTHNER Patrick 07501153

Executive summary
Quick response of Zara leads it to be successful in the fashion clothing industry. Zara adopts international strategy for its operation. With vertical integration, it benefits Zara in cost aspect, however, it involves some risks. Due to our anaylysis on Zara’s operations, some of the recommendations are made to facilitate its further improvements. Marco-environment

Macro-environments are changing in different aspects which influence Zara’s operation. Demographic:Age structure
Age structure changes nowadays. Most countries have majority of adults who age from 15 to 64, which the number of elderly (65 or above) is increasing. However, the birth rate is decreasing because many of the women do not have any babies. Take an example of spain(germ_e/pdf), the number of baby per women is only 1.4, which means that each women have about one baby only. It indicates why the birth rate is low which the population is become aging. The majority of the population(15-64)generally have higher income, more stable and higher ability to have spending on goods. Demographic:Sociocultural

Increasing no. of women workforce all over the world
There is a trend of increasing women workforce in the world nowadays. Based on higher education, economics reforms, status of women were being raised. More women, even the one with babies and families, still kept on working. Women become no longer just a housewife; they have ability to make consumption too. Women’s market is a market that should never be ignored nowadays. Greater concerns on appearances

Recent years, not only women, but men also started aware of their appearances. They believe that one’s clothing and accessories could represent one’s taste and status. Nowadays, people are willing to spend money on their quality clothing or skin care products to make they become more attractive. It can see from Fig 1 (refer to appendix) that the apparel expenditure contributes to quite a large proportion of their overall expenditures, which indicates that, the importance of apparel has increased. Political/Legal From the TDC Trade website, it indicates that European Union (EU) has imposed quotas on 10 catergoies of chinese textile product and it’s still valid in 2007. Also, by the work of WTO, the tariffs being imposed has been canceled so that the input cost of the manufacturers can be decreased. (

Technological:Importance of Internet
Internet’s importance is increasing dramatically these days. Internet could transmit messages to any places in a rapid way, both effective and efficient for consumers and companies. Many companies use Internet as a medium to communicate with their consumers, providing information for them and get feedback and opinions from them too. Also, many of the big companies will have Online purchase system; this can provide customers another choice instead of shopping in stores. This saves their time and they can have more information search before purchases. Word-of-mouth, or buzz on Internet is one of the major concerns of the company because a bad message of the company could reach thousands of people through internet in a few minutes. Usage of internet could be convenient if used by companies properly with good effectiveness. Economic: Unemployment rate and GDP

The unemployment rate are seems to be dropped during these years. It may due the better off of the economics situation. In addition, the GDP’s trend is upward as well; it indicates a potential better business environment in Europe. Refer to Fig 2. Global: Increasing global trade

More companies cooperate with companies in other countries to enter new markets and reach new potential customers. This provides a...
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