Zara Case Study Analysis

Topics: Supply chain management, Marketing, Supply chain Pages: 6 (1850 words) Published: August 9, 2013
CASE STUDY ANALYSIS: ZARA
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Table of Contents
1. Introduction3
2. Strategic Issues Underpinning the Buying Decisions at Zara3
3. Zara’s Product Mix Strategy: Advantages and Disadvantages6
4. Conclusion8
REFERENCES10

1. Introduction
Zara is a successful retail clothing company that expanded over the years due to its elaborate supply chain and excellent product mix strategy. The company established in 1963 opened its first store in 1975, in La Coruna. By 1989, the company had ninety-eight retail shops and production facilitates distributed around Spain. This followed international expansion where the company opened several other stores around the world. The company has a huge expansion around the world, making it the largest and most lucrative Unit of Inditex SA, manufacturer and distributor of Spanish clothes with over one thousand three hundred stores located around Europe, Asia, America, the Middle East and Pacific region. This brief overview highlights the strategic issues underpinning Zara’s buying decisions and the company’s product mix strategy. 2. Strategic Issues Underpinning the Buying Decisions at Zara Buying decisions are the series of options a consumer makes before purchasing a product (Stahlberg 2012, p.3). The customer chooses where to buy the product, the model, the brand, when to buy, amount to spend and what payment method to use. The company or marketers try to influence consumers’ buying decisions through supply of sufficient information (Stahlberg 2012, p.3). Zara develops a production cycle that is distinct from fashion sectors principles. The company’s design team operate throughout the season studying every current trend in the market. The design team do so through assessing how clubbers dress, and clothes worn in major television series. These strategies help the company in producing stream of new products that keeps customers flocking in the company to see and purchase the new products. The company also offers its quality clothes at moderate prices. The high-velocity operation employed by the company keeps customers queuing up in long lines at Zara’s stores, particularly on delivery days. The popularity of the company and its quality, current and affordable designs generates bottom-line and tangible results besides admiration of the company by the fashion world. The company buying decisions are strengthened by the nature of the company’s product. Zara provides fashionable products that meet the present fashion trends and consumer taste and preferences. The company is keen in offering tastes that varies by region, country and from one store to another. The company offers products with brief product life cycle. It produces products that remain fashionable for a brief period. The company introduces ten thousand new designs into its various stores annually. The steady store refreshment attracts new buyers besides guaranteeing the return of old buyers. The company changes the manner in which people do their shopping in the sense that when customers notice a product that they like in the store, they understand that the product will only be available for four weeks. This motivates customers to buy the products instantaneously thereby creating a considerable shopping velocity. The company also offers products with uncertain demand. The mixture of fashionable, regional deviation of feel and trend, and short product life cycle implies that the product is indecisive. Moreover, the company influences customers buying decisions through provision of products with comparatively high margins. The company provides consumers with products, although, not luxurious, but have an advanced margin end of fashion industry. Another aspect that strengthens buying decisions at Zara is the disposition of the company’s markets. Evidently, the company has a considerable number of loyal customers. It also holds the potential to attract more customers through its...

References: Ferrell, O 2008. Marketing strategy. New York: Cengage Learning.
Hugos, M 2011. Essentials of supply chain management. London: John Wiley & Sons.
Stahlberg, M 2012. Shopper marketing: how to increase purchase decisions at the point of sale. Texas: Kogan Page Publishers, Apr 28, 2012.
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