Zara Sales Analysis

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The Macro environment :

The macro environment of a firm is the external factors that concern directly the firm itself. In this environment, we can include the Social environment, the Legal environment, the Economical environment, the Political environment and the Technological environment.

-The Social environment:
With the huge numbers of store (one more is opening in Sydney, Australia), Zara has settled in many countries. Therefore, the firm must respect the culture of each kind of customers, wherever they are from. Zara must create clothes that fit to every kind of culture around the world. Moreover, Zara only employ people that live next to the store. By encouraging local employment, Zara helps the country to fight Unemployment.

-The Legal environment:
The great numbers of shops also explain the variety of their legal status. Among them, they are Franchise (Not that much in France according to the information we collected in the store) and Joint Venture.

-The Economical environment:
Since 1975, Zara has opened 2692 stores in more than 60 countries and has an average Turnover of 10 billion US$. This economical situation put Zara in the most famous and powerful clothes brands in the world.

-The political environment:
Because of its presence all around the world, Zara must face the laws and rules of each country that has a store. Just like the Social environment, Zara must adapt its way of selling to these rules

The Technological environment:
Zara is special in the fact that they do everything about the clothes: They design, create and sell it. For the production, even though it was created in 1975, Zara uses high technology machine to create the clothes. Then, to supply the stores, it has a well develop distribution system.

The Micro environment:

The Micro environment is all the factors close to the firm itself: The Company (in its general view), People who buy goods (Customers) and finally the other firm that compete with the one studied (Competitors). The Micro environment is also known as “The 3 C’s”.

The company:
To sum up everything that has been said about Zara, we can say that Zara is an old brand (Exist since the 70’s), that it has a great Turnover (About 10 billion US$) that it is spread in many countries in the world (about 60 of them).

The customers:
The type of customers targeted by Zara is the most common people. This brand is made for everyone (men & women, adults or childs). Moreover, with cheaper price than any other brand, people form middle class can afford to buy such clothes. Finally, Zara aim to sell clothes to different types of people and different cultural origins according to the spread of the number of stores around the globe.

The competitors:
In the clothe market, they are many actors and players. That is why it is hard to choose competitors for a brand in this market. We finally choose H&M, GAP and C&A (German brand that has a shop in Brest and compete with Zara’s Brest store). These brands are well-known (maybe more than Zara is) and they attract a lot of customers thanks to their popularity. However, to my/our mind, the cheaper prices and the localization of Zara makes it as competitive as those brands.

2) Consumer Behavior

The Consumer Behavior that Zara’s customers presents is perfectly well designed and planned to attract most kind of customers with their accessible prices and their wide variety of designs that is well adapted to the customer’s taste. There are two key components to their strategy. First, they produce in small batches with fast replenishment lead times to their stores. Second, their initial price for an item at the start of a selling season is not outrageously high. Consequently, they rarely need to markdown merchandise because they do not stock too much inventory and when they do offer a discount, it is not particularly deep because their initial price is reasonable. Zara’s leadtimes are typically less...
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