Swot Analysis Of Zara

Introduction

Zara is a fashion clothing store owned by Spanish fashion group Inditex. The first Zara store opened in La Coruna by Amancio Ortega in 1975. Major consumers included young, fashion forward people who resided in the city whose trends and demands were hard to forecast. Being in the apparel industry, he believed that retailing and manufacturing needs to be closely linked to meet consumer demands. What differentiates zara from competitors is the rapid turnover time and using the physical store as a source of information. The company was a huge success and the Zara chain opened an average of one store per day across the world since 2003 and currently having about 550 stores.

Analysis

Zara portrays many strengths as a company. With stores located all over the world, they have established a well branded name valued by customers. Consumers typically prefer branded products over generic products, and Zara makes this attainable by keeping prices low, yet offering the latest fashionable designs. This is possible by following a vertically integrated system, keeping their business operations at a relatively low cost. Although Zara seems to be doing well, current weaknesses may be the lack of promotional activities. Advertising is necessary in all businesses to reach and attract more customers. Some opportunities include expanding into new markets where they haven’t yet reached such as China, Japan, and India. Another huge opportunity would be offering their products online. With technological advances, shoppers are swaying from the physical store and entering the cyber world. Some threats observed are expanding to a region where fashionable clothing is unimportant, a downfall of an economy leading to potentially higher costs,...

... middle of paper ...

... come from Europe, the main focus should be to maintain its current market position and penetrate deeper in European regions. Zara needs to make sure that their brand is strong and well recognized to set itself apart from competitors. If the CEO of Zara chooses to expand internationally, he should implement a combination of new strategies for further action. Detailed observations should be made before entering a new region because the fashion market is constantly changing and without the proper assessment could lead to undesired results. A strong research and development crew should be studying customs, norms, and values in a different area. More consideration needs to be taken into account about customer preferences in order to seek growth in a foreign region. Managers should consider a potentially increased business risk and security when entering new countries.