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Zara Global Strategy

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Zara's Global Strategy History Current Status

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Zara Global Strategy

  1. 1. Submitted By: Akriti Mahajan (04MBAIB14), Priya Pandita (14MBAIB14) Samarth Gupta (18MBAIB14), Shantanu S Jamwal (19MBAIB14) Sushain Mahajan (22MBAIB14) International Centre for Cross Cultural Research & Human Resource Management
  2. 2. Contents  About Zara  Mission, Vision & Long Term Objectives  History of Zara  Zara’s Brand  Zara’s Business Model  Zara’s Product Development Vs Competitors  Strategies in Action  Integrated Market Communication Strategy  SWOT Analysis
  3. 3. Zara España, S.A. Industry Retail Founded Arteixo, Galicia (Spain) (24 May 1974; 41 years ago) Founder Amancio Ortega Rosalía Mera Headquarters Arteixo, Spain Number of locations 2,000+ stores [1] Area served Worldwide Key people Óscar Pérez Marcote, Director- general Products Clothing Revenue €11.594 billion (2014) [2] Parent Inditex Divisions •Zara Diseño, S.L. •Zara Logística, S.A Website zara.com About
  4. 4. What is Zara?  Zara is one of the largest international fashion companies. It belongs to Inditex, one of the world’s largest distribution groups.  The customer is at the heart of our unique business model, which includes design, production, distribution and sales through our extensive retail network.  Zara welcomes shoppers in 86 countries to its network of 2000+ stores in upscale locations in the world's largest cities.  Zara has continually maintain its mission to provide fast and affordable fashionable items.  Zara's approach to design is closely linked to their customers.
  5. 5. Mission  Through Zara’s business model, we aim to contribute to the sustainable development of society and that of the environment with which we interact. The company's commitment to the environment is included in Inditex Group’s Corporate Responsibility Statement.
  6. 6. Vision “ZARA is committed to satisfying the desires of our customers. As a result we pledge to continuously innovate our business to improve your experience. We promise to provide new designs made from quality materials that are affordable”
  7. 7. Long-term Objectives  Save energy, the eco-friendly store They are implementing an eco-friendly management model in their 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.  Produce less waste and recycle Zara recycles their hangers and alarms, which are picked up from their shops and processed into other plastic elements. This is an example of their waste management policy. Millions of hangers and alarms are processed each year and both the cardboard and plastic used for packaging are also recycled.  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 the shops.
  8. 8.  Use biodiesel fuel Zara’s fleet of lorries, which transport more than 200 million items of clothing a year, use 5% biodiesel fuel. This allows them to reduce their CO2 emissions by 500 tons.  Their commitment extends to all their staff, increasing awareness among the team members The Company holds In-company awareness campaigns and specific multimedia-based training programs to educate their staff in sustainable practices, such as limiting energy consumption, using sustainable transport and modifying behavior patterns. Long-term Objectives Trucks to ship Inditex’s products from the logistics centers daily Natural Gas generators at the heart of Inditex’s plant and distribution center in Tordera, Spain
  9. 9. History  Amancio Ortega opened the first Zara store in 1975 in a central street in downtown A Coruña, Galicia, Spain.  The first store featured low-priced lookalike products of popular, higher-end clothing fashions. The store proved to be a success, and Ortega began opening more Zara stores throughout Spain.  During the 1980s, Ortega started changing the design, manufacturing, and distribution process to reduce lead times and react to new trends in a quicker way, in what he called "instant fashions".
  10. 10. History  In 1980, the company started its international expansion through Porto, Portugal. This international expansion was increased in the 1990s, with Mexico in 1992.  Ortega has continued to grow creating brands such as Pull & Bear, Bershka and Oysho. He has acquired groups like Massimo Dutti and Stradivarius. Today Inditex is the biggest fashion group in the world.
  11. 11. Zara brands success Zara is one of the most well known brands in the world and is also one of the largest international fashion companies. They are the third largest brand in the garment industry.
  12. 12. Zara brand Wheel
  13. 13. ZARA’s Business Model
  14. 14. Nucleus to Zara’s Business Model
  15. 15. STORE
  16. 16. Design & Production
  17. 17. Logistics
  18. 18. Teams
  19. 19. Zara’s Performance
  20. 20. Strategies in Action  Integration Strategies Forward Integration, high integration between the headquarters and all branches across the globe, to standardize the overall business performance, Zara also performs some horizontal integration through its acquisition (acquisition of Massimo Dutti, Stradivarius)  Intensive Strategies Market Development strategy in which they are entering new market, China, India, and Indonesia, Market Penetration strategy, especially in European and American markets by improving its online store and increase customer service
  21. 21.  Diversification Strategies To complete its product lines Zara sells accessories to complement their main product which is apparel, unrelated diversification in the form of Zara Home  Defensive Strategies Zara has no defensive strategy because the company is in good condition, not in any kind of jeopardy. Therefore, it does not need any defensive strategy at the moment. Strategies in Action Zara Home’s first store in Indonesia, located in Plaza Indonesia on 2nd Floor
  22. 22. Strengths 1.Cost leadership strategy 2.Efficient distribution 3.Information technology 4.Fast delivery of new products ,and trends Weaknesses 1.Centralized distribution system 2.Doesn't spend much money on advertising 3.Zara only has one manufacturing and distribution centre in the world Opportunity 1.Global market penetration 2.Online market 3.Distribution centre in us Threats 1.Local competitors 2.Global competitors 3. Zara based in Spain and has a huge no of stores in Europe will dent in revenues. SWOT analysis