Term Paper ( z a r a )

Company BackgroundZ

ARA

Competitors of ZARA ZARA

BUSINESS MISSION

“ZARA walks at the pace of society, dressing ideas, trends and tastes that society itself has matured.”

◊ The business is in clothing industry.◊ Its market is all society members.◊ Zara’s value and goals are related to satisfaction the customers matured tastes.

ZARA

STRENGTHSStrong product

diversityStrong revenue

growthStrong distribution

networkZero advertising

SWOT ANALYSIS

SWOT ANALYSIS WEAKNESSES

Overdependence on the European marketReliance on local designers

SWOT ANALYSISOPPORTUNITIES

Expansion plansGrowing apparel

retail market in Asia Growing online sales

THREATS

SWOT ANALYSIS

Counterfeit goods Rising Labor cost in

European region

DIFFERENT ENTRY MODES

ExportingFranchising

Joint VenturesWholly Owned

Subsidiaries

ZARA

ZARA

ENTRY RESTRICTIONThe major comparable players that ZARA

face at international level are: Benetton H&M Gap

POLITICAL, SOCIAL VALUE Spain:

Industry without smokestacksTourism

China:Communist RevolutionIndigenous cultural influence

France:Revolutionary legacyCatholism

ECONOMIC CONDITIONSCountry GDP(milli

ons)Trade Balance

Unemployment Rate(%)

Inflation rate(%)

Spain $ 1478206 $8.84nHundred Million

26.1 2.40

China $ 7203784 $ 1183983 Thousand

4.1 2.10

France $ 22775518

$ 6011 Million

10.7 1

HUMAN RESOURCE: MOTIVATIONAL REWARDS

Extrinsic/Intrinsic/Hygiene Motivation• Equality, multiculturalism, and conciliation•Commitment to equality and non-discrimination•Confronting gender discrimination and sexual harassment•Work and family life• Global Agreement with the UNI Global Union•Health and safety

THEORY X and THEORY Y Zara- Theory X•Retail PerspectiveINDITEX- Theory Y•Innovative and encourages individuals to reach highest potential

HUMAN RESOURCE: MOTIVATIONAL REWARDS

Hawthorne’s Theory Organization exists to serve human needs. Organization and people need each other. When the fight between the organization and

individual is poor, one or both will suffer. A good fit between individual and organization

benefits both.

Theory A/J/ZOrganization Type Z (Modified American) Long-term employment Collective decision making Individual responsibility Slow evaluation and promotion Implicit informal control with explicit ,

formalized control Moderately specified career paths Holistic concerns, including family

CORPORATE SOCIAL RESPONSIBILITES

Zara’s CSR programsInitiative programso Zara reduces the production of waste and encourages recycling.o Use of paper or biodegradable plastic bags.o Use of ecological fabrics, like organic cotton E.g. “Made in

Green” stamps.o Animal welfare policy.o CSR with Suppliers E.g. acceptable working conditions,

prohibition of all forms of forced labour.o CSR to the society and environment E.g. maximize the efficient

use of energy in manufacturing.

Corporate PhilanthropyZara does not involve themselves in any kind of corporate philanthropy as it is continuous innovation based on customer desires and almost all the acts are initiative based.

Zara’s 8P’s

product

place

price

promotionpeople

physical evidence

process

positioning

Product• Shoes, cosmetics• 11000 items in product

mix • Rapid changes in design• Organic raw materials

Place• 1751 stores in total• Location: city hubs• Online stores recently

launched

Price• Pricing at cost + a

profit margin• Advantage as both

manufacturer and retailer

Promotion • Shop windows serve as

attraction points• Opening new stores,

rapid expansion strategy

• website video

People

• Own workers, sales force, designers

• Efficient at work• Dedicated to fulfilling customers’

demands• Fulfills Zara’s mission statement

Physical evidence

• High quality product• Made from organic, eco friendly

materials• Very fashionable, latest in the

market• Stores are really spacious and

products are located beautifully.

Process

• Extremely fast production of goods. From design to store in weeks

• Attractive presentation of products in shop windows

Positioning

• Top fashion house• High quality product at affordable

price• Environmentally conscious;

sustainable resource management

Integrated marketing communication Almost no advertisements on

billboards and televisions

Strategy is based more on product, place and pricing than than on promotion

It reaches out to its customers by rapidly opening new stores in new city hubs

Reaching out to customers through stores and producing new designs at a very high rate

Action rather than using promotional tools

Communicated by the stores, particularly the attractive shop windows

Online stores

Videos for the different product lines on its website

Minimal print ads for certain outfits

CONTINGENCY STRATEGIES

Zara earned a positive brand image by fulfilling customers needs.

Direct Marketing : Zara’s own website, stores at almost in every big cities of the world; where customers can buy their products.

Internet Marketing : Advertisements, Apps, Blogs

Promotional : Zara keep updating the collections and spread it on the websites and social networks.

offers sales and discount to reach more customers.

A STORE OF ZARA IN ROME, ITALY.

THANK YOU

ZARA