Zara is a fashion company that runs internationally and does so being a part of five other apparel retailing chains. Inditex (Industria de Diseno Textil) of Spain is the owner of the chains with Zara being the most successful of the chains. Inditex’s founder and owner is Amancio Ortega, a man who is Spain’s richest man despite starting off as an errand boy. Inditex came out on fire with their Initial Public Offering in May of 2001. They enjoyed an increase of nearly 50% of its stock price in the next 12 months. All of that while entering into bearish stock market conditions. The one challenge that was highlighted during this was significant growth. Its future growth had to match the expectations and reach the bar set high by its initial success.
Zara has been open since the year of 1975 and provides clothing for women, men, and children. These different areas of clothing each have their own team focused on making sure they have the newest and trendiest fashion in their clothing. Zara, which started small, now has over 500 stores in 30 different countries. Zara has become the number one retail chain Inditex. This is mainly due to their short cycle time, advanced manufacturing systems, and their forward thinking global perspectives. Zara’s success has come with a lot of praises, but has a few shortcomings as well that limit the full potential it can reach. For a consumer in North America or Asia, Zara may not be very familiar to them. That is because even with the accomplishments and continued success in South America, Europe, and even the Middle East, Zara has not been able to develop a successful presence in Asia or North America. The problem immediately realized from this is the concern that a strong company is ...
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...motivated by impulse to start buying online. As Zara wanted people to impulse buy due to its quick turnover, the same will happen online and can be even more effective. The last thing implemented by Zara is the addition of greater inventory into the stores, but that can be increased over time with rising interest.
Inditex has been very successful for a long time with the business strategies they have been able to apply for years. Zara has had much success and that has been achieved even with the challenges it faces today. Implementation of a solid future strategy will have great long-term impact on Zara. Improving advertising, increasing levels of inventory, and adding more physical stores will make Zara even more successful in the future. Overall, Zara is a great company doing a lot of things right and is a prime example of what it takes to be a success.
The global fashion and apparel industry is a giant with annual turnover of approx. $1.7 trillion and provides employment to approx. 75 million people. With globalization and increasing competition amongst manufacturers, coupled with lower production rates in the developing countries, buying clothes has become way inexpensive than before. Add to it the fiercely growing internet penetration and fast catching up ecommerce industry, clothes are more or
Zappos is an online shoe and clothing store. The idea of an online shoe store originally came from Nick Swinmurn in the year 1999. He then pitched the idea to Alfred Lin and Zappos’ current CEO Tony Hsieh. Zappos quick rise to success is mostly attributed to their ten core values. These values vary from creating fun and weirdness to being humble. However, the root of this company’s success lies only on one important thing: their regard for customer service. They value the quality time spent with customers over the phone rather than the quantity of customers.
The ecommerce industry is growing faster than ever. TJ Maxx needs to start focusing more on ecommerce not only to keep up with competition, but also to make sure they do well during weak economic periods. ecommerce, overall, tends to do very well during lackluster economic times. TJ Maxx will be able to cut costs more easily the more they expand their ecommerce business. Our business idea will allow them to expand their ecommerce as we will take over their website and delivery. TJX Companies’ three ecommerce sites accounts for only about 1.0% of the company’s total sales. However, the online channel is a key growth driver and TJX is taking initiatives to improve its online business. The ecommerce sales
Macy’s Corporation has experienced major differences to stay competitive in the retail store. With force closure lurking in the future, it is presumed they have lost sight of what made flourish and successful. As a result, Macy’s Corporation put their marketing research team to work to find a solution to help revitalize a new target market and stand out from all another retail store the way they once did. Furthermore, to find a more practical solution, Macy’s Corporation marketing research team will need to find a new target market, a new product, a new marketing strategy for their new target market, the best method for marketing research, and outline the final steps of implementing new products using a solid development process.
Analysis & Recommendation: Zara’s main strategy is the ability to respond very quickly to the demands of target customers which called for identifying trends of the customer in advance. The company has been able to identify the trends and meet the demand with the help of its autonomously organized structure and its effective value chain systems. The present system followed by Zara has been very effective and very easy to maintain, which as a result has persuaded the company to continue without any change in the present system so far. The problem that Zara faces right now is that the system that they use, P-O-S (Point of Sale terminals), runs on DOS which Microsoft does not support anymore and any hardware change in the POS terminal will not be compatible with the current POS software. Although the sense of urgency for the change may not be that high, investing in IT infrastructure is a must as MS Dos is an obsolete technology and there is no contract or guarantee from their POS terminal vendor that they will continue supplying the same terminal with out much changes in the hardware for any specific period of time, therefore change is unavoidable. The other main issue that Zara faces is that the stores don’t share inventory information electronically and hence inventory management becomes highly difficult and manual. The decision making process is based on the judgment of employees throughout the company instead of relying on a small set of decision makers; the majority of the decisions were made by store managers and as a result they placed orders for the items rather than simply accepting and displaying what headquarters decided to send them.
The organization has had to ensure that it has retail stores in many countries globally and website options in more than 100 countries. The company further enhances access of online stores in more than 37 countries which is accessible all the time and people are able to access the services regardless of their location. Globalization further affects the organization in the sense of international market management which requires it to engage in strictly global decision making. The organization’s production networks have been geared to enhancing global competition (Lüsted, 2012) .The Company is further good when it comes to seizing the opportunities available in global market. For the organization to find efficient as well as cheap means of production, it has to bargain hard so as to allow its contractors to have low profits. This mostly is consequential to the suppliers cutting corners with the use of cheap
b) Zara can focus on expanding and increasing the number of outlets in Asian countries such as China and India. The scope of development is very high and the demand for fashionable clothes is increasing at a very fast rate. But it will have to focus on other local competitors who provides the latest fashion at a cheaper rate. As Zara is a known brand, so it would be easy to increase awareness among the consumers through advertisement, promotions and celeb endorsements.
The fundamental business strategy of Zara is very simple which is linking customer demand to manufacturing, and liking manufacturing to distribution. Zara has been running their business in fashion industry which is susceptible to seasons and quick changing customer tastes. Zara has been approached to and considered their business as a perishable commodity business just like a fresh baked cake or bread to be consumed quickly.
H&M is the world’s second largest retailer, only behind its main rival Zara of Inditex (Petro, 2012). The company currently has 3006 stores in 53 countries. The company does not own any factories. H&M outsources production to network of 800 independent suppliers; 75% in Asia and 25% in Europe. In order to increase the efficiency and productivity of its supply chain, the company strategically locates its network of 20 to 30 production offices close to its suppliers. According to Stockholm Newsroom, the pretax profit of the company for the month of June to August of 2013 is $907 million, which indicates an 11 rise in turnover (Pollard, 2013). The company continuous development plan facilitates its goal for both brick and mortar, and online stores expansion worldwide. The target segments for H&M, a category specialist store, are trendsetters and fashion/money conscious males and females ranging from 16 to 40 years old with income ranging $15,000 to $60,000 annually.
Miuccia Prada once said that “What you wear is how you present yourself to the world, especially today, when human contacts are so quick. Fashion is instant language”. Miuccia Prada and the Prada brand have grown from humble beginnings making quality leather goods to a public traded company with a current market capitalization of over $26 billion (USD) . With the development of Prada as one of the world’s premier luxury brands it provides an excellent case study to examine how strategy paved the way for the success of the Prada brand. First, an examination of Prada’s strategic positioning against luxury brand rivals Louis Vuitton Hennessey Moet (LVHM) and Kering (Gucci). The acquisition history of Prada will be reviewed, where some preliminary conclusions can be made about what has been contributing factors to both the successes and failures. Then finally, an evaluation of what the future holds for Prada and the sustainability of its competitive advantage.
The business model that sets Zara apart from other clothing retailers is how rapidly the company changes stocks and releases new product lineups. The company averages 12-16 collections annually which equates to more than one lineup a month. Due to stock being limited and the rapid production Zara brings forth, their items are viewed as exclusive promoting further business. Their customers are happy knowing that their specific article of clothing is more “rare” due to only having an average of a two-week window to purchase the clothing. The company specifically targets current trends and has them in the store within 30 days. This maintains the brand’s uniqueness and relativity in fashion.
Zappos.com is a website that started off just selling shoes but now sells items such as handbags, clothing, and housewares in addition to shoes. Their company logo includes their catchy name with an explanation point as the end in the shape of shoe print which leads consumers to believe Zappos has strong feelings about the service they provide to their consumers. Zappos believe that customer service is the number one priority and is focused on cultivating repeat customers which is why they have always provided free shipping on both orders and returns; occasionally provides upgraded shipping so customers can receive their shoes the same day that they are ordered even though this is very expensive to the company; and they only show products on their website that they actually have in stock albeit they lose 25 percent of their potential business by doing so (Walker, 2009). For a compa...
Facilitating functions are those which make the process easier for both, the manufacturer and consumers. Zara is a proud owner of 90 percent of its stores in brick and mortar, located mostly in popular and dense traffic locations, which is meant to be an efficient advertisement technique.
Thau was inspired by the Bashar Nejdawi, president of Ingram Micro Mobility that is a provider of technology and supply chain services. According to Nejdawi, “In five years, consumer electronics stores as we know them today won’t even exist, and the same rings true for our favorite apparel brands”. He also asserts that three influential factors will change the retail landscape: instant gratification, borrowing and customization. A good example of instant gratification is Uber or Amazon. The Uber customer can see in real time where the Uber car is and when is going to arrive. In the same way the Amazon provide fulfillment program that allow retailers to sell products that are not physically in storage. In this way the retailers do not have to care about inventory and can concentrate on marketing. Secondly, the borrowing culture is going to grow. As an example is Zip Car or Netflix applications. On the Zip Car program someone can borrow a car just for few hours. Likewise, some business offer a mobile device rental program that allow a customer to lease the latest device for a fraction of the cost. Further, the customization program permits customers to choose their preferences before the product is being made. As an example is miAdidas company that gives to the clients the possibility to create
The company experienced an immense development over the last year which is due to great sales and ...