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Zara - Study Case
- 1. FINAL PROJECT PRESENTATION PRESENTED BY CARRINE KEZIA AULIA 102183022
- 2. PRESENTATION OUTLINE • COMPANY PROFILE • SPAIN GENERAL ENVIRONMENT • CORPORATE SOCIAL RESPONSIBILITY • STRATEGIC PLANNING • COMPETITORS • ORGANIZATIONAL STRUCTURE • STAFFING, TRAINING & COMPENSATION FOR GLOBAL OPERATIONS
- 3. INTRODUCTION
- 4. ABOUT ZARA • Zara’s founder is the first richest person in Spain and the third richest person in the world (2013). This person is Amancio Ortega • Zara is owned by Inditex Group 1975 1976 1985 NOW Spreading stores in Spain First store in La Coruna, Spain Spreading to the world 1,700 stores, 82 countries
- 5. BRAND PORTFOLIO WOMAN, TRF, MAN, KIDS WOMAN Coats . Blazers . Dresses . Shirts . Trousers Jeans . Skirts . Knitwear . T-Shirts . Studio Lace . Shoes . Handbags . Accessories
- 6. BRAND PORTFOLIO WOMAN, TRF, MAN, KIDS TRF Coats . Jackets . Dresses . Shirts . Trousers Jeans . Skirts. T-Shirts Shoes . Handbags
- 7. BRAND PORTFOLIO WOMAN, TRF, MAN, KIDS MAN Coats and Trench coats . Jackets . Beat Collection . Blazers Suit . Trousers . Jeans . Shirts . T-Shirts . Sweatshirt Knitwear . Wear to wear . Basics . Shoes . Bags Accessories . Soft Wear
- 8. BRAND PORTFOLIO WOMAN, TRF, MAN, KIDS KIDS (0-14 years) Coats . Dresses . Cardigan and sweater Sweatshirts . Shirts. T-Shirt Skirts and Shorts . Jeans . Trousers Activewear . Basics . Shoes Handbags . Accessories . Underwear
- 11. HOFSTEDE’S CULTURE DIMENSION • Hierarchical distance is accepted • Those holding the most powerful positions are admitted to have privileges for their position • The superior still need information from his/her subordinates while subordinates expect their boss to control them
- 12. HOFSTEDE’S CULTURE DIMENSION • Spanish people in general, consider it is important to have rigid codes for everything. • People tend to look for more stability in their life and work. • 75% of Spanish young people wanted to work in civil service • Confrontation is avoided
- 13. HOFSTEDE’S CULTURE DIMENSION • Compared with the rest European countries (except Portugal) Spain is tend to be more collectivist. • Compared with other areas of the world, Spain’s score is tend to be more Individualist • Spanish quite easy to relate with (mainly) non-European (collectivist country), than other European countries. • Teamwork among workers is natural and no need strong motivation from the superior in order for workers to commence in this act.
- 14. HOFSTEDE’S CULTURE DIMENSION • Tend to be more feminime. • It shows more tenderness. • Avoid a direct and confrontation style, conflicts are resolved by compromise and negotiation. • Managers are not expected to be so aggressive or competitive, but tend to pay attention to the human aspect.
- 17. DOING BUSINESS IN SPAIN Business Values • Avoid confrontation • Trust and personal relationship are the keys of success • Time consuming • 10 really means 10:30 or 11. • Negotiations may day longer than expected. • Informal • Hierarchical country – final decisions – most senior managers. • Do not insist on written confirmation of a deal.
- 19. ZARA’S CSR • The following are some of the objectives and actions: o AT THE STORE Save energy The eco-friendly shop Produce less waste, and recycle Commitment extends to all our staff An environmentally aware team.
- 20. ZARA’S CSR o WITH THE PRODUCT Use ecological fabrics Organic cotton o IN TRANSPORT Use biodiesel fuel o ANIMAL WELFARE POLICY o FRAGRANCES
- 21. ZARA’S CSR August 2011 • Zara is being accused by Brazilian Ministry of Labor of Human Rights Violations • Poor working condition – 14 hours per day • After two weeks, Inditex published new measures for factory in Brazil • Agreement was reached in Dec 2011 with compensation of 1,8 million dollars
- 22. ZARA’S CSR November 2012 • Zara committed to eliminate all releases of hazardous chemicals throughout its products by 2020 (Greenpeace’s Detox Campaign) •“Greenpeace welcomes Zara’s commitment to toxic-free fashion. If the world’s biggest fashion retailer can do it, there’s no excuse for other brands not to clean up their supply chains and make fashion without pollution,” said Martin Hojsik, Detox Campaign Coordinator at Greenpeace International.
- 24. MISSION STATEMENT "To hold big market share among young and fashion conscious city dwellers in all continents by quickly respond their demand."
- 25. BUSINESS OBJECTIVE To be the number one supplier of affordable fashion in the world and to continue its expansion globally adding another 520 new stores and increase market share of Zara by 5% and sales by 10% particularly in the Asia/ Pasific region by 2016.
- 26. SWOT ANALYSIS •High brand value •Vertically integrated retailer •Strong distribution channel •Spot emerging trend and react quickly •Stores around the world (1.700 stores in 82 countries) •High quality at reasonable price •Customers' comment and feedback •Prime retail locations •Do CSR •High productivity (20 Factories in 5 countries) strengths
- 27. SWOT ANALYSIS •High cost (high rent in expensive location) •Lack of advertising •Online presence •Limited stocks - stocks run out quickly weaknesses
- 28. SWOT ANALYSIS •Expansion plan •Strong brand image •Online market •Growing apparel market in Asia •Diversification Opportunities (Zara Home, plus sizing, add new product, e.g. accessories - shoes, bag, etc) opportunities
- 29. SWOT ANALYSIS •Strong competition •No advertising campaign •Euro centric production •Fluctuation in exchange rate •Defeated by competitor (online shop) threats
- 30. STRATEGIC CHOICE • Improve online shop function, process handling, shipping, and return service (e-commerce strategy) • Multi functional online shop (dress room option) • Iphone and Ipad application • Social media (Facebook, Twitter, Pinterest) • Complete stock rotation every 15 days • High development of new designs in 14 days • Launches around 10.000 new products each year specialization
- 31. STRATEGIC CHOICE • Cost-price leadership • Fast rollover of new product • Strong branding differentiation
- 32. STRATEGIC CHOICE • Demographic segmentation o Women/ Men o Aged 18-40 o Mid-range income • Lifestyle segmentation o Interested in fashion trends o Small and plus sized shaped (6-18, XXS to XL) segmentation
- 33. STRATEGY IMPLEMENTATION • Zara is focusing on Internet online marketing opportunities such as e-commerce strategy and social media to promote traffic on zara.com as well as attracting visitors to the online shop. • Zara’s online shop currently operating in 22 countries, included 2 countries in Asia, China and Japan (Still expanding)
- 35. COMPETITIVE ADVANTAGES •Expanding geographic market without sales forces and huge capital invest. •Shoppers can purchase products 27/4 (No time limit). •Another marketing channel (Customer reviews and testimonials). •Broader Zara's potential customer base. •Greater flexibility to promote without expensive printed display material.
- 36. POSSIBLE STRATEGY •Exporting •Franchising (The Stockmann Group - Finland 2013, Mitra Adi Perkasa - Indonesia) •Off shoring (Bangladesh, Turkey, Vietnam, and Portugal) •Joint Ventures (Tata Group - India 2010) •Wholly Owned Subsidiaries (Italy, Russia, and Japan)
- 37. COMPETITORS
- 40. ORGANIZATIONAL STRUCTURE • Integrated global structure o Shorter lead times o Decentralized decision making • Vertical integrated structure o Manages all design, warehousing, distribution, logistic o Flexible in the variety, amount and frequency To hold big market share among young and fashion conscious city dwellers in all continents by quickly respond their demand To hold big market share among young and fashion conscious city dwellers in all continents by quickly respond their demand
- 42. STAFFING, MOTIVATING & COMPENSATION • They “sell” their strong brand image to attract their future employees • Makes people “needed”, through their contribution
- 43. STAFFING, MOTIVATING & COMPENSATION • Store managers – 70% of salary come from commission • Individual bonus = the success of the team • Training program and avenue for career development • Health insurance & retirement plan • 15% discount • Annual trip/ gathering • Tuition reimbursement • Business travel globally
- 44. STAFFING, MOTIVATING & COMPENSATION • Employee’s card (25% discount) • Management development training program • Rapid career progression • Annual trip/ gathering • Reimbursement (transportation and phone call) • Health insurance and retirement plan • Hand-phone, car, private driver, apartment for expatriate managers zara indonesia
- 45. THANK YOU
Notes de l'éditeur
- Company Profile Founder History Brand product Spain General Environment Hofstede’s Culture Dimension High context and Polychronic Culture Doing Business with Spanish CSR Strategic Planning Mission Statement Business Objectives SWOT Strategic Choice Strategy Implementation Competitive Advantage Possible Strategy Competitors Organizational Structure
- This fashion group also owns brands such as Massimo Dutti, Pull and Bear, Uterqüe, Stradivarius and Bershka. The Zara’s first store was opened in La Coruna, Spain on 1975, and on 1976 Zara started to spreading their stores in Spain, and now, in 2013, Zara has 1,700 stores in 82 countries.
- which more specifically for younger women
- People in high power distance cultures are much more comfortable with a larger status differential than low power distance culture. Spain’s score in this dimension is 57, which means medium tends to be high, reflects BALANCE hierarchical distance is accepted those holding the most powerful positions are admitted to have privileges for their position. makin tinggi makin menghormati ketuaan, indonesia 78, amerika 40
- 1. As the second noisiest country in the world, Spanish prefer rigid rules because they believe change causes stress, at the same time, they are obliged to avoid rules and laws, in fact, make life more complex. 2. at this respect they seem to have lower ambitions of achievement and innovations are not expected to occur so often as well 4. in recent survey. which means they needn’t to concern about the future, because the job is already guaranteed. USA 42, only 17% of young people would like it INDONESIA 48, tapi aneh, banyak org lebih ke civil – harusnya tinggi kaya si SPAIN
- Spain score in this dimension is 51, which is medium score, 4. Medium score in this dimension shows that Teamwork among workers is natural and no need strong motivation from the superior in order for workers to commence in this act.
- 1. As a collectivist country compared with other european country, you should avoid confrontation as much as possible, because spaniards do not like to admit that they are wrong, especially in public COMPROMISE 2. As a high-context country, Feeling, trust, and personal relationship should be your primary focus, you should allow sufficient time in your travel arrangements for long meetings and socialising, to allow time to get to know each other. 3. Planning to meet at 10 really means 10:30 or 11, people late for business meetings because they care more about family time and building friendships than they do work. It’s not rude to people from polychronic culture, because it is expected. During negotiations, they will move freely between topics and may days longer than expected. 4. As we can see from power distance dimension, Spain tend to be more Hierarchical country, that’s why final decisions are only made by the most senior managers in the company. 5. Due to the value of trust within business relationships, Spanish executive usually do not insist on written confirmation of a deal.
- We save energy. The eco-friendly store. We are implementing an eco-friendly management model in our shops in order to reduce energy consumption by 20%, introducing sustainability and efficiency criteria. This management model sets out measures to be applied to all processes, including the design of the shop itself, the lighting, heating and cooling systems and the possibility of recycling furniture and decoration. We produce less waste and recycle. Recycling hangers and alarms, which are picked up from our shops and processed into other plastic elements, is an example of our waste management policy. Millions of hangers and alarms are processed each year and both the cardboard and plastic used for packaging are also recycled.Our commitment extends to all our staff. Increased awareness among our team members. We hold In-company awareness campaigns and specific multimedia-based training programmes to educate our staff in sustainable practices, such as limiting energy consumption, using sustainable transport and modifying behaviour patterns.
- 1. We use ecological fabrics. Organic cotton. Zara supports organic farming and makes some of its garments out of organic cotton (100% cotton, completely free of pesticides, chemicals and bleach). They have specific labels and are easy to spot in our shops. 2. Zara's fleet of lorries, which transport more than 200 million items of clothing a year, use 5% biodiesel fuel. This allows us to reduce our CO2 emissions by 500 tons. 3. All products of animal origin sold in shops, including fur and leather, come exclusively from animals raised on food farms and under no circumstances come from animals sacrificed exclusively for the sale of their hide. 4. Also, in line with their commitment, Zara fragrances are not tested on animals.
- I found that zara have had a problem according their CSR,
- Framework development on the e-commerce strategy License issue Hire new staff to support the marketing team IT standard on global immigration New online shop implementation Project support by beginning of 2013 and hire new staff to the team Communication over the complete implementation phase - weekly meeting Based on figure 1, the first phase will consider the project evaluation by the end of 2012, the second phase will implement the redesigned IT setups offline by mid of 2013 and the third phase will release the new redesign online shop by end of 2013.
- by using this strategy
- zara brand : famous multinational company with trendy and fashionable product it makes people want to be a part of what zara is doing, and when zara satisfy this desire in their staff, zara receive their admiration, loyalty, respect and cooperation