Zara - Fast Fashion Case

Assignment ZARA:Fast Fashion P1

Contents

INTRODUCTION P2

What industry is it p4

BODY P3

General environment analysis p5

The industry environment p6

Competitive environment p7

Have material about opportunities and threats p8

The firm's resources, tangible and intangible p8

Capabilities identification p9

Core competency analysis p10

Value Chain analysis p11

Weaknessnes p12

Pulling it together p13

Current strategies p14

CONCLUSION P3

Strategies p15

Assignment ZARA:Fast Fashion P1

Introduction

What industry is it

Apparel Industry Outlook

The global apparel chain was a typical buyer-driven chanin in which upstream structure was fragmented, locally owned, dispersed, and often tiered production whereas downstream intermediaries like retailers and branded marketers. A short summary of the apparel industry characteristics was as follows:

Production: Very fragmented apparel production. Developing countries had an unusually large share, about one half in total exports due to cheaper labor and inputs. Proximity was important since it reduced shipping costs and lags. Despit China's existence as an export powerhouse, regionalization was the dominant motif of changes in apparel trade in the 1990s.

Retailing: The increasing concentration of apparel retailing in major markets was thought to be one of the key drivers of increased trade. In order to improve speed and flexibility, large apparel retailers played the leading role in promoting quick response. Retailing activities remained quite local with respect to oher industries.

Customers:per capita spending on apparel tended to grow less proportionately with increases in per capita income, so that its share of expenditures typically decreased as income increased. Significant local variation in customers' attributes and preferences was an issue not only between regions but also within regions .

BODY

General environment analysis

ZARA'S BUSINESS MODEL

We mainly analyzed Zara to recommend on Inditex's strategy since it was the flagship of Inditex and the generator of a huge percentage of financial results by itself. Zara used needs-based positioning , targeting a specific segment of customers and providing a tailored set of activities that can serve those needs best, in developing its business model. Its business model. Its selling ideas was giving middle class customers an exclusivity feeling in its stores with fashionable products, service, store design, and store locations.

Assignment ZARA:Fast Fashion P1

Marketing Mix

Zara's well-designed marketing mix was in consistency with its "medium quality fashion clothing at affordable price"positioning and its selling idea

Target Customer: It targeted fashion-conscious customers who were at the same time price -sensitive and have frequent shopping behavior.

Product: Zara offered designer -style garments and accessories with broad, rapidly changing product lines；relatively high fashion content；and reasonable but not excessive physical quality.

Place: The prices of products were affordable.

Promotion: Zara spent only 0.3% of its revenue on media advertising, compared with3%-4% for most specialty retailers. It relied on centralization of store window displays and interior presentations in using the stores to promote its market image. Its new items were first displayed in stores. The rapid turnover reflected the freshness of its offerings , the creation of sense of scarcity and an attractive ambience around them, and the positive word-of-mouth that resulted.

The industry environment

Competitive Advantages

Competitive advantages of Zara were mainly the key attributes of its unique business model and the perfect fit of all activities in this business model. The competitive advantages are as follows:

Strong real estate network: As mentioned in marketing mix, Zara located its stores at premium districts. The stores functioned as both the company's face to the world and as informations sources. The promotion and advertising were executed through window displays and interior presentations. However, finding available real estate in these locations was a matter of relations and brand name in addition to financial power which made it difficult to replicate for many competitors.

Quick Response(QR):Despite the global trend was transferring apparel manufacturing facilities to countries with lower lapor and input costs such as China, proximity was the key element in Zara's manufacturing policy. Manufacturing remained mainly in Europe and its neighborhook.40% of finished

Assignment ZARA:Fast Fashion P1

garments were manufactured intenlly. Just-in-time system was installed by the cooperation with Toyota. In addition to this , Zara had its own centralized distribution system. Its focus on internal manufacturing