Zara Group Case I
Zara Group Case I.1
Question 1:
Which theory is the best representative of Zara’s (Inditex’s) internationalization?
The Uppsala model is the best representative of Zara’s internationalization.
The Uppsala model is a theory that explains how firms gradually intensify their activities in foreign markets. The key features of the Uppsala model is the following: firms first gain experience from the domestic market before they move to foreign markets. After that firms start their foreign operations from culturally and/or geographically close countries and move gradually to culturally and geographically more distant countries. Also you can say that firms start their foreign operations by using traditional exports and gradually move to using more intensive and demanding operation modes both at the company and target country level.
So you can compare this model really good with Zara’s internationalization. The first store which was not opened in Spain was Portugal. Because of its geographical and cultural proximity to Spain it was easy to open there a store for Zara. After Portugal Zara opened Stores in France (due to the geographical proximity) and in Mexico (due to the similarities in culture and language). After this they opened stores more and more in other countries. Here it is important to say, that in each country, they only opened on store in the beginning. With this store they learned more about the country and how to get the right strategy for this country.
Question 2:
Please evaluate the competitive strategy of the three world market leaders. Which of the three will be the future winner with regard to global retailing in the fasion world?
Inditex is using as competitive strategy the differentiating strategy which means that the sell clothes to low costs but also to much higher cost. H&M is using the low-price-strategy as their competitive strategy. Gap Inc. has a differentiating strategy as Inditex. Both of them has a main brand and some other smaller brands.
Question 1:
Which theory is the best representative of Zara’s (Inditex’s) internationalization?
The Uppsala model is the best representative of Zara’s internationalization.
The Uppsala model is a theory that explains how firms gradually intensify their activities in foreign markets. The key features of the Uppsala model is the following: firms first gain experience from the domestic market before they move to foreign markets. After that firms start their foreign operations from culturally and/or geographically close countries and move gradually to culturally and geographically more distant countries. Also you can say that firms start their foreign operations by using traditional exports and gradually move to using more intensive and demanding operation modes both at the company and target country level.
So you can compare this model really good with Zara’s internationalization. The first store which was not opened in Spain was Portugal. Because of its geographical and cultural proximity to Spain it was easy to open there a store for Zara. After Portugal Zara opened Stores in France (due to the geographical proximity) and in Mexico (due to the similarities in culture and language). After this they opened stores more and more in other countries. Here it is important to say, that in each country, they only opened on store in the beginning. With this store they learned more about the country and how to get the right strategy for this country.
Question 2:
Please evaluate the competitive strategy of the three world market leaders. Which of the three will be the future winner with regard to global retailing in the fasion world?
Inditex is using as competitive strategy the differentiating strategy which means that the sell clothes to low costs but also to much higher cost. H&M is using the low-price-strategy as their competitive strategy. Gap Inc. has a differentiating strategy as Inditex. Both of them has a main brand and some other smaller brands.