ZARA Q2

Question 2 ZARA’s capability to become one of the most popular and recognized names in fashion is truly extraordinary. Its ability to re-create fashion, while remaining affordable is one the main reasons why the organization has attained its success, and its skill to make rational decisions has contributed to the company’s accomplishments. SWOT analysis involves the study of an organization’s strengths, weaknesses, opportunities and threats. SWOT analysis will be helpful to inditex executives and store managers by allocating the company’s issues, and discovering the most suitable ways to solve current situations. For example, one of ZARA’s major weakness is that the company does not invest sufficient money into the marketing of the company, in order for it can become more recognized. Advertising is a persuasive communication which is acquired by consumers through awareness, yet, ZARA has no advertising strategy. Addressing these weaknesses would assist executives in identifying these issues, and approaching them with suitable decisions.
In terms of opportunities, Inditex executives and ZARA store managers will be able to recognize potential opportunities with the use of the SWOT analysis. It will help allocate opportunities for ZARA such as – the chance to enter into new markets geographically, ways in which their product line can create a more customer-oriented set of products, and the company should also consider constructing a distribution center in the United States. The company will continue to face threats as long as it is in operation. Some threats include- local and global competition – many clothing companies are emerging and dominating the market, GAP and H&M are major competitors of ZARA. ZARA executives has to be aware of these threats in order to prepare the company for increasing competition, and bargaining power which may decrease the profit of the company in the long-run. ZARA will also face the effect of having only one distribution outlet.