These days, she goes to Zara whenever she needs to buy birthday presents for friends. Most of them like clothes — especially from Zara.
Business Generic and Intensive growth Strategies of Zara Fashion Zara is among the leading names in the world of fast fashion. The brand has grown fast in terms of market size, global presence and sales and revenue.
While the sales of the brand have surged fast, so has its market size. It is now in 93 countries with more than 22, stores. The flagship brand of Inditex is known for turning product ideas into products fast.
A product idea on the table takes the form of a finalized product and reaches the stores in a span of time as short as just two weeks. While this is a sign of excellent supply chain management, it is also a critical ability which has helped Zara outshine the other brands. All of this success has come at really no costs related to marketing.
The brand invests really nothing in this area. However, its business strategy has a very important role to play in this regard. This is a discussion of the generic and intensive growth strategies Zara followed to grow its brand and market share and generate sustainable competitive advantage.
Michael E Porter has outlined three generic strategies that can be used by a business brand to acquire a source of competitive advantage.
These strategies are cost leadership, differentiation and focus. You can become a cost leader by providing products at lower prices than your competitors or you can differentiate your product from others to provide differentiated value. You can also focus on a distinct customer segment and its needs and accordingly deliver a product or service.
The third strategy he has further subdivided into two — cost focus and differentiation focus. The generic strategy that Zara has used is called cost leadership. It has provided Zara with a distinct source of competitive advantage.
Apart from that to a small extent it has also used differentiation for advantage over other brands. The brand provides high end fashion at low prices. The designs and styles it sells is similar to those provided by designer brands.
However, the clothes are of average but good quality. It is how Zara has become a favorite of the millenial generation and the middle class.
The modern generation wants trendy fashion bat lowest prices. Middle class people want affordable fashion and if it is trendy, nothing can be better. Zara does not just make affordable fashion, but something that is as good looking as the designer brands.
This has led to both popularity and brand loyalty. Apart from it Zara has also used innovation to build competitive advantage.
Based upon innovative technology and supply chain management it has been able to reduce the time between fashion cycles. From bringing an idea to the table to the finalization of the product and in-store demonstration, it takes Zara only two weeks.
The other brands can take up to 6 months to complete the process. However, at Zara the fashion cycles are shorter and their number high.
So, fashion can change inside Zara stores within a period of weeks. This is an important source of competitive advantage because it does not just work to retain the customers but also to engage them.
Since prices are very low, customers get back within weeks to check out new styles and designs. Intensive Growth strategies used by Zara: Apart from Intensive strategies brands use intensive strategies to grow their market and sales.Case #4: ZARA – Fast Fashion BADM Value Chain Analysis Primary activity Inbound logistics (Raw Materials)-Sourcing from China and Hong Kong to increase the quality of fabric while forcing the price to stay down-Almost one-half of fabrics remained undyed to facilitate in season updating with maximum flexibility-Through vertical.
Generic Competitive Strategies Analysis for Zara. According to the Michael Porter’s Model represent that there are three generic ompetitive strategies in the current business world that are overall cost leadership, differentiation, and focus strategy and every firm have to select one of these three strategies to apply to their firms as their leading strategy (Porter & Millar, ).
First off, sorry for the late late post on Zara. Got distracted with stuff.. but here goes. Overview of the determinants of industry profitability (Porter’s Five Forces Analysis) Zara’s competitive position can be quickly summarized using the chart below, where it is seen that Zara has a dual advantage over its competitors: generates more top-line.
Porter five forces analysis From Wikipedia, the free encyclopedia A graphical representation of Porter's Five Forces Porter five forces analysis is a framework for industry analysis and business strategy development. Zara and Industry Analysis with medium to low budget and in pursuit of style/fashion Presentation brought to you by: CHEN Miao, DONG Yinfei, LIU Ying, WANG Yue, &YU Qi..
Zara and the Clothing Industry Agenda Value Chain Major Players Industry Overview Description of Zara Industry Analysis Porter's 5 Forces Women's Men's . ZARA Case Study- PESTLE - SWOT Analysis 1.
CASE STUDY - ZARA - PESTLE 2.
Profileof Zara Zara is a Spain-based clothing and accessories retailer founded by husband- wife duo Amancio Ortega and Rosalia Mera under the umbrella of Inditex Group.