Z A R A
Background
•  ZARA is a fast fashion brand under the umbrella
company of Inditex
•  ZARA is Indetex’s strongest chain.
•  ZARA is buyer-driven and has integrated vertical
manufacturing. •  Gap, H&M, and
Benetton
•  ZARA’s next
step is to figure
out where to
expand in the
future and how
they can keep
staying ahead of
their competition. Strength
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•
•
•
•
Lead time
QR
Design team
Merchandising
Vertical integration
Buyer-driven
Fast fashion
Opportunity
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•
•
•
•
More advertising
Expansion
Acquisition
Less outsourcing
Making higher quality
merchandise
Weakness
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•
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Centralized logistics model
Costs of going global
Not localized
Poor quality
Threat
•  Competitors
•  Localized brands
•  Failing to accurately
predict trends
•  Markdown focused trends SWOT Analysis: Strengths
•  Moving merchandise quickly from
factory to store •  Unique design team •  Track customer preferences Strengths Continued
•  Merchandising
•  Changing displays often
•  Getting customers to
buy by feeling a sense
of urgency •  Upscale look for
moderate prices
SWOT Analysis: Weaknesses
•  Diseconomies of scale
•  •  They may not be local
enough
•  Sustainable
competitive advantage
•  How sustainable is
it?
Questionable quality
SWOT Analysis: Opportunities
•  More advertising
•  Opening more stores in
other countries
•  Owning other companies
through acquisition Opportunities Continued
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•
•
•
Entering smaller markets
Using less outsourcing
Making goods at a higher quality
Entering non-European countries
SWOT Analysis: Threats •
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Competitors Localized brands
Failure to accurately predict trends
Markdown focused brands may draw people in with their
more frequent sales
Creating a Competitive Advantage
Past International Strategies •  Carefully select major cities for flagships •  Expand further into market
•  Centralized operations
Modes of Entry •  Focus on 3 major
Modes of Entry –  Joint- Venture
–  Wholly owned
subsidiaries –  Franchise An International Presence ZARA Growth Strategy •  Used rapid international
expansion which began in
1988 in Portugal “Oil Stain” Strategy
•  Zara would open a
flagship store in a
major city –  Learning by doing
–  Spain, Portugal
Micro Analysis
•  Used onsite to gather
information locally in
places they wanted to
expand in. •  Focus on market
prices rather than
costs
Internationalized Expansion •  At the end of 2001, Zara was by far the most
internationalized as well as the largest of Inditex’s
chains. Globalization of Inditex
Globalization of Inditex
How Effective is ZARA’s Strategy
•  Vertical integration, local sourcing, and product
standardization
Will ZARA fail eventually?
•  ZARA has
withstood the test of
time
Recommendations for ZARAs Future
•  Smaller markets/cities
•  Limit outsourcing
•  Focus on fashion