Economics and Zara

Topics: Economics, Inditex, Vertical integration Pages: 3 (769 words) Published: September 20, 2010
Market Entry Strategy: Case Study of Zara – Internationalisation in China

1. Introduction and Background

Amongst the motivations to strategise are to grow fast ahead of the competitors, grow in the line with the industry or to simply catch up and defend an existing status. Despite the challenges, threats and risks, the orientation of various firms are to expand, to reach and to penetrate new markets segments. The working title of the research is initially drafted as – Market Entry Strategy: Case Study of Zara – Internationalisation in China. The study aims to explore the effectiveness of the chosen market entry strategy and mode of entry by Zara in penetrating the Chinese retail market. Whether the strategy proved to be beneficial in its initiative to internationalise the operation of the business will be also explored. Thereby asking, what are the benefits of putting the business within the Chinese business environment?

As such, market entry decisions are a multi-approach that requires careful consideration of the firm seeking to widen economies of scope and reach. Zara should take note, however, that market entry decisions depend on the resources and the ability to sustain the competitive edge. In this study, different market entry strategies and its drivers, nature and dynamics will be explored with reference to Zara’s business. Zara’s international strategy framework of market entry, market selection and marketing approach is the driver behind the internationalisation strategy of Zara. When it comes to market entry, the question now is what are the economic and political barriers that take effect on the strategy?

2. Company Profile

Owned by Amancio Ortega, Zara, on the other hand, is a clothing company originated in Spain. Inditex Group, the parent company, claims that Zara needed just a couple of weeks to go through the development of a new product and get it to the stores, compared to that of six months which is the industry average....
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