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Running head: ASSIGNMENT 2
Assignment 2
Kamorna Anastasiia
6480719
Global Business Management
Subject: Global Markets and Strategies
Carol Terentiak
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ALL BRANDS
In 2011-2012 there was a lot of interesting events. But top brands like Coca-Cola,
Pepsi, Google, and Apple are still there in the list of top brands of all time. The
biggest growth in brands in recent years are Apple, Samsung, Oracle, Amazon and
Nissan. It is not a surprise because this year Samsung presented a lot of new
gadgets, which became very popular. Amazon also increased for more that 10%
and I believe will grow next year too, as internet trading become more and more
popular. If yesterday people switched on their computers to buy something, today
they do the same just in 5 minutes with the help of their phone. People do not
spend time shopping, they just go on-line. Oracle also grown stable since 2009.
Significantly dropped brands like Nokia, Hp, Honda, Nescafe, Sony, Dell,
Goldman Sachs, J.P.Morgan, Thomson Reuters, Citi, Siemens, Nintendo, Avon,
Gap, BlackBerry, Yahoo and Moet&Chandon. Most of them were predictable, for
eg Sony, it declined since 2008 and this year has the lowest brand value since
20011.
2011-2012 was year of new technology. Apple and Samsung were two biggest
newsmakers and they take big part of market from Nokia and Siemens.
Another interesting brand is Coca-Cola. Coca-Cola shown great stability. Its brand
value didn’t change too much since 2001. But during the last year it has increased
by for 8%. It happens as Coca-Cola connects with young generation through social
media. They create amazing advertising and never forgot about their corporate
social responsibility. Moreover, they sponsor Olympic Games since 1928 and
major Football championships – last one was EURO 2012 (Ukraine-Poland).
It is normal that consumers tend to spend more on healthcare, electronics,
education, travel, and leisure, and less on clothing or investing money. That is why
most car, electronics and food industry brands are growing up.
Most of the time top brands compete with each other. Google increases, Microsoft
decrease, ZARA grows, GAP falls down, and this satiation will be there always as
they compete for the same dollar in their particular industry.
In top 100 brands presents services as well as goods. In future service sector will
be grow faster than goods, as people want personal solution to their problems.
They tired little bit from luxury brands. They still are willing to pay money, but not
to be like somebody else, they pay in order to be different.
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Interbrand - Best Global Brands 2012 - 2012 Report." Interbrand - Creating and managing brand value | Global
Branding Consultancy. N.p., n.d. Web. 7 Feb. 2013. <http://interbrand.com/en/best-global-brands/2012>.
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ZARA
One of the brands that has increased their brand value by 18% in 2012. It is a huge
increase for their industry.
Zara is the world famous fashion brand. It is part of world's largest fashion retailers
Inditex group, which includes several famous brands of clothes. ZARA is currently
present in 87 countries with 1721 stores2.
It is very successful brand. It shows growth every year. For fashion industry it is
very difficult, as the same like phone or computer you have to create something
new each and every year if you want to be interesting for your customers.
Innovation, innovation and against innovation. And ZARA never forgot about this.
It has more than 200 designers, who create amazing cloth.
They have strong connection with their final customers and this helps them not to
spend a lot of money on advertising campaign which can be failure. They directly
ask customers what they want and what they need. It is so easy, to listen to your
customers.
Interesting fact, that ZARA never go first with new ideas to new market. They do
not need to be the first one. It is much better save money on researching market
and just wait for competitors, who will do all work for them. ZARA just follow
general tendency and trends of the year. They have a lot of problems with
copyrights but they win every judicial proceeding. They smart enough to follow
their own way in business. And consumers like it.
Their marketing is great. They don’t spend money on expensive advertising with
Hollywood actress or big promotional company. They invest money in the beauty
and location of their shops. Specific location! “Prada wants to be next to Gucci,
Gucci wants to be next to Prada. The retail strategy for luxury brands is to try to
keep as far away from the likes of Zara. Zara’s strategy is to get as close to them as
possible.”3
ZARA broke up tradition of making just two collection every year and present
more than five, six. They deliver new products every two weeks to all their stories.
And in this case ZARA’s supply chain system is the biggest strength. They don’t
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INDITEX Group - Stores around the world. (n.d.). INDITEX Group - Home. Retrieved
February 7, 2013, from http://www.inditex.com/en/who_we_are/stores
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Hansen, S. (2012, November 9). How Zara Grew Into the World’s Largest Fashion Retailer.
The New York Times, 1. Retrieved November 9, 2012, from
http://www.nytimes.com/2012/11/11/magazine/how-zara-grew-into-the-worlds-largest-fashionretailer.html?pagewanted=all
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need “designer-push” system, as they can adapt to current trends in a few weeks
with the help of inspired and responsive design team.
ZARA follows general trend to wear cloth which look nice, beautiful and fashion,
but not to pay for it $200 if you can buy it for $20. For example, Kate Middleton
creates a good free advertising wearing ZARA on official receptions and not to
hide that.
They never forgot about competitors as customers can find substitutes very fast
and easy. And if they will like price, design and service they will change their
mind in a second, as 2012 is year of fast fashion, not couture. ZARA minimize
inventory, which creates a good cash-flow of company and a big problem for their
competitors.
In 2012 ZARA shown stable rise in brand value. I cannot say that it is significant
increase or unpredictable increase, as Zara almost every year has +10% increasing
of their brand name value. The greatest number was in 2007 – (+22%), that in
2008 – (+15%), in 2009 – (+14%), in 2010 – (+10), in 2011 – (+8%) and in 2012 –
(+18%). So number +18% is not maximum, it can be even more.
Increase in 2012 was caused by opening new big store on Fifth Avenue in
Manhattan and expending new market – Asia. For China they even adapt their
business model and change design. The challenge there is price, as for European
market compare to luxury brands ZARA is cheap, but China has their own
production of cloth. But still it is very big and perspective market. Moreover, it
increases on-line selling of their products.
One of the most important things is that usually economic recession lead to a
decrease of consumer’s disposable incomes which is followed by a decrease in
spending on clothes. But Zara has prospered even during period of financial crisis,
because she never forces people to buy what the produce. Zara ask people what
they exactly want and then produce that amount of product which people want to
buy.
I think in 2013 they will still grow and expend new markets. Open new stores and
go on-line at the same time. I don’t expect any substantial change in their
marketing, as they already have successful model, which works more than 7 years
without any defects. Only one thing, which they have to control and analyze all the
time is demographic trends of particular country, as it is the most important
considerations in fashion industry.
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Hewlett-Packard – company with big history, but low brand value in 2012.
Hewlett-Packard Company produces computer products, software, technology and
solution service both for individuals and business. It can be small or large
companies. It also works in health and education sector and cooperates with
government from different countries. They have huge Service and Printing
segments. Hewlett-Packard provides different services, which help management
teams to store data, secure it and work with information quickly and accurately. It
provides storage platform, applications, business process domain, consultation and
outsourcing.
Hewlett-Packard had a good positive tendency to grow up in its brand value since
2005. In 2011 brand value was two times more than in 2005. But in 2012 this
tendency drastically changes. After six years of leadership in the number of PC
shipments Hewlett-Packard shift to second place at the end of 2012.
So it lost attention of the customers. This happened for two reasons – lack of brand
personality and lack of innovation. Lack of brand personality is the biggest
problem. When you hear Apple or Coca-Cola, or Ferrari you have strong image
and association with company slogan, values and believes. For the last two years
Hewlett-Packard lost it. They need to create their own story. And now they come
up with new logo, with will change to 2025 significantly.
Innovation from Hewlett-Packard came only at the last quarter of 2012. Company
decides not to compete in mobile devices and tablets sector, but put all force to
produce laptops and increase level of software service for entrepreneur sector. And
it is right decision. In 2011 personal computers generate $39.6 billion profit,
services, $36.9 billion, printers $25.8 billion and enterprise services and equipment
$ 22.2 billion. So two major branches, which Hewlett-Packard should develop is pc
and services.
For 2013 Hewlett-Packard need more aggressive company to solve their software
to final customers. They have a lot of different products, but sometimes people
even don’t know about it. Their web-site is huge and well organized, but if you
don’t work in technology it will be difficult to find information about particular
product which you need without help.
Hewlett-Packard already expand portfolio of their products for enterprise sector.
Moreover, they change CEO. So in 2013 they have all chance to improve their
position on the market and return to their brand value in 2011 or even increase it.
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References:
1) Hansen, S. (2012, November 9). How Zara Grew Into the World’s Largest
Fashion Retailer. The New York Times, 1. Retrieved November 9, 2012, from
http://www.nytimes.com/2012/11/11/magazine/how-zara-grew-into-the-worldslargest-fashion-retailer.html?pagewanted=all
2) Inditex: Fashion forward | The Economist. (n.d.). The Economist - World News,
Politics, Economics, Business & Finance. Retrieved February 5, 2013, from
http://www.economist.com/node/21551063
3) Zara owner raises dividends - The Irish Times - Wed, Mar 21, 2012. (n.d.). The
Irish Times - Breaking Local and International News from Ireland. Retrieved
February 5, 2013, from
http://www.irishtimes.com/newspaper/breaking/2012/0321/breaking6.html
4) The Strategic Retail Genius Behind Zara - Forbes. (n.d.). Information for the
World's Business Leaders - Forbes.com. Retrieved February 5, 2013, from
http://www.forbes.com/sites/lydiadishman/2012/03/23/the-strategic-retail-geniusbehind-zara/
5) HPQ Profile | Hewlett-Packard Company Common Stock - Yahoo! Finance.
(n.d.). Yahoo! Finance - Business Finance, Stock Market, Quotes, News. Retrieved
February 7, 2013, from http://finance.yahoo.com/q/pr?s=HPQ
6) Inditex: Fashion forward | The Economist. (n.d.). The Economist - World News,
Politics, Economics, Business & Finance. Retrieved February 7, 2013, from
http://www.economist.com/node/21551063
7) O'Reilly, L. (n.d.). HP looks to marketing to drive turnaround | News |
Marketing Week. Marketing Jobs & Marketing News - Media, Advertising, Brands
- Marketing Week. Retrieved February 7, 2013, from
http://www.marketingweek.co.uk/news/hp-looks-to-marketing-to-driveturnaround/4005273.article
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Appendix
Fig.1. Number of countries in which ZARA operate and ZARA’s stories in the
whole world (2011).
Retrieved from http://www.forbes.com/sites/lydiadishman/2012/03/23/thestrategic-retail-genius-behind-zara/
Fig. 2. Hewlett-Packard Shipments in third quarter 2012.Reprieved from
http://thenextweb.com/insider/2012/10/11/hp-challenges-gartner-pc-figures-afternew-study-puts-lenovo-on-top/
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Fig.4. Hewlett-Packard Sales Soar in fourth quarter 2012.
Reprieved from http://seekingalpha.com/article/1146531-hp-no-1-in-computersales
Fig. 3. Condition of industry and Hewlett-Packard company, February 4, 2013.
Reprieved from http://www.statista.com/statistics/12734/sales-of-pcmanufacturers-by-quarter/
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Fig. 5. Common Statistics for Hewlett-Packard for the last 10 month (March 2012
– January 2013).
Reprieved from http://www.statista.com/statistics/12734/sales-of-pcmanufacturers-by-quarter/