Executive summary The current performance of Zara has attracted a large amount of attentions from the world, since

it is so outstanding in the current global market hurt by financial crisis. In the report, first of all, the strategic analysis of Zara recently will be explored in details, which include general environment, specific environment, internal and competitive analysis, in order to provide the clear viewpoint of the current situation of Zara. In addition, the strategic directions and objectives will be identified, so that the audience could have the chance to know more about Zara inside. Moreover, the marketing strategies of Zara will be analyzed by various models, in order to evaluate the reasons why Zara is so successful. Finally, based on the analysis above, the paper would attempt to give some recommendations in order to maintain and then improve the efficiencies in the future.

1. Introduction

In the report, the essential objective is to explore the current strategies of Zara right now in order to not only find out the incentives why Zara is so successful, but also come up with more appropriate recommendations for Zara in the future. In terms of Zara, it can be regarded as one of the largest fashion firms in the globe, since its clothing is cost-effective and fashionable. As a result, the current business model and various marketing strategies need to be analyzed in order to find out the major consequences of the fabulous performance. To be more specific, first of all, the strategic analysis of Zara recently will be explored in details, which include general environment, specific environment, internal and competitive analysis, in order to provide the clear viewpoint of the current situation of Zara. In addition, the strategic directions and objectives will be identified, so that the audience could have the chance to know more about Zara inside. Moreover, the marketing strategies of Zara will be analyzed by various models, in order to evaluate the reasons why Zara is so successful. Finally, based on the analysis above, the paper would attempt to give some recommendations in order to maintain and then improve the efficiencies in the future.

2. Strategic Analysis of Zara

In the section, in order to indeed understand the current situations, it is necessary to explore the external and internal environments based on a series of analysis models. At first, in terms of external environment analysis, three essential analysis models including PESTL model, Porters five forces plus governmental issues model and Turbulence model will be used. After that, core competencies, SCA, and internal weaknesses will be analyzed, in order to provide the thorough analysis on the internal environment. What is more, the competitive position of Zara in clothing market will be identified.

2.1 External environment analysis The external environment cannot be changed by single firm, since it is so influential and has the power to regulate and affect the behaviors of firms. Therefore, if the actions of firms could follow the external trends, the results of strategies would be excellent. 2.1.1 General and Specific clothing industry environment PESTL model and SWOT analysis model are indeed appropriate for the firms to provide a thorough external environment analysis. To be more specific, based on PESTL model, the companies could know exactly on the key trends related to the firms in the following five years. Furthermore, the firms could realize the opportunities and threats. Porter, M. (2008) points out these five forces plus governmental model could describe the industry clearly, which is indeed helpful. On the one hand, based on PESTL model, the paper will give the analysis of political, economical, social-cultural, technological and legal environments. The political environment in the world is relatively stable right now, which can be regarded as one great positive incentive for the whole international industry. Also, from the perspective of economical issues, even though the world has been hurt seriously by global crisis, now it is at the stage of recovering. The majority of developing countries like India and China have kept the increase trend for many years. The increasing purchasing power also can be referred as another positive factor for the industry. What is more, the cultural diversification gives more barriers for firms to innovate the product, but the advanced technology definitely helps the firms to perform effectively and efficiently. Lastly, in terms of legal environment, even though some governments have to increase barriers for international industry, most countries still set up various regulations to motivate the trade. On the other hand, based on the model of Porter, M. (2008), the clothing industry indeed plays a vital in the individuals daily life. There are five different factors including industry rivalry, threat of entry, bargaining power of suppliers and buyers, and threat of substitutes. In terms of the fashionable clothing industry, the competition is increasingly stiff, since the sustainable and profitable market has attracted a lot of

attention of investors. Next, the barriers for new entry firms are relatively weak, which means new competitors could easily begin to play the game. In addition, the bargaining power of suppliers is relatively high, because the behaviors of suppliers could influence the cost of firms significantly and then affect the performance. Finally, the threat of substitutes is low, since there is no appropriate product for fashionable clothing right now. 2.2 Internal and competitive analysis of Zara Generally speaking, every successful firm has core competencies and other strengths, but there are also some weaknesses that the company should pay more attention immediately. First of all, in terms of Zara, the core competencies can be described from four aspects. The first one is the talented designing team who are providing the latest fashion for consumers. Moreover, Zara has the absolute control on production, which means it has nine garment factories stand by. The production cycle time is only a weak, so that the new or popular products could enter into the market in a short time. Thirdly, the advanced logistic network also can be regarded as the impressive factor, so that Zara could perform more effectively and efficiently. Finally, the appropriate marketing strategies and implementation also make Zara more competitive in the fashion clothing market.

3. Strategic directions and strategic objectives of Zara

In the section, the paper will attempt to explore the vision and mission statement of Zara at first, so that the reader could have the chance to know the blueprint of Zara briefly. After that, the strategic objective of Zara will be analyzed, in order to check if it is appropriate currently. 3.1 The vision of Zara According to the official website of Zara (2013), the company is attempting to be the most innovative and leading textile producers. In other words, Zara will focus on innovative design and marketing strategies to win the trust of the target consumers, in

order to seek a host of profits in a long time. At the same time, Zara also attains market leadership through unmatched quality, a diverse and unique product mix, empowered employees, world-class systems and the highest ethical and professional standards (Zara 2013). Based on the current performance of Zara, the company is moving exactly on the vision. 3.2 Mission Statement of Zara Based on the mission statement of Zara (Zara 2013), the company is devoted to achieve consistent improvement in the system of providing products and services to the customers through on time delivery and enhancing customers satisfaction by ways of quality and value. The current performance of Zara is exactly the same as the mission, which means the company lives up to the mission. 3.3 Strategic objectives Learning from the vision and mission statement, the major strategic objective of Zara is to provide fashionable clothing with relatively attractive prices. To be more specific, since Zara has some core competencies about production and logistics, it is costeffective to produce the new clothing. Furthermore, the fabulous innovative design team can be regarded as one source of competitive advantages. As a result, the company could combine the capabilities and then create one appropriate strategic objective with following the vision and mission statement of Zara. In terms of stakeholder demands, the strategic objectives of Zara perfectly align with stakeholder demands. More specifically, the major stakeholders of Zara include shareholders, customers, employees, suppliers, government and so on. First of all, since shareholders are willing to seek more sustainable profits, the objectives of Zara are also making more benefits through great quality and service and higher market share. Secondly, from the customers perspective, the large number of customers is hoping to enjoy good clothing with lower price. Zara is the one who could provide this kind of product and service to satisfy their needs, since the company has effective and efficient logistic network and advanced production line. Next, because Zara provides the regular training programs for employees in order to maintain the effective human resource management, the employees could not only experience the

great treatment and working environment, but also have the chance to improve themselves frequently. What is more, the suppliers and Zara are cooperating with each other, in order to pursuit mutual benefits. Finally, in terms of the government, since Zara always obeys governmental regulation, in order to seek interests for all parties, the government is also attempting to support the business of Zara. To be concluded, most stakeholders benefits can be satisfied by strategic objectives of Zara. 4. Key broad business-level and international strategies of Zara

In the section, the paper will attempt to explore the product strategies, adaptive strategies, competitive strategies and international strategies of Zara, in order to fully understand the reasons why Zara is successful recently. 4.1 Product strategies of Zara Zara takes the product strategy of product development as the major one to capture the market. To be more specific, since Zara has one group of talented and experienced design team and advanced production line, the company could easily update the latest style of clothing with fashion. Also, combined with the relatively low prices, the clothing of Zara definitely has the ability to attract a large number of customers in the market. It is appropriate for Zara to take this product strategy, because it fully takes advantage of its capabilities and the current market trends. 4.2 Adaptive strategies of Zara In terms of the adaptive strategies, Zara can be regarded as one great analyzer. To be more specific, the essential reasons why Zara is successful today are thorough analysis on market and itself before making market plan. For example, the fashion never stops, so that Zara just focuses on it and creating more clothing in order to give the target consumers the chance to closely follow the fashion. As a consequence, from consumers perspectives, they prefer to spend little money to buy the clothes of Zara frequently. Even though it is time-consuming and complicated for the company to be a great analyzer, the expected strategies taken by a series of analysis would have the positive effect on the performance of the company.

4.3 Competitive Strategies of Zara Based on the theory of Porter, M. (2008), Zara takes the combination strategies with differentiation and cost leadership. To be more specific, on the one hand, the latest design style of Zara could be regarded as one major attractive factor, since the company provides the different designs compared with others. The Zara Style has successfully tied the loyal customer up. On the other hand, according to the analysis above, Zara has the abundant resources and capabilities on production line and logistic network; so that the production cost is lower than other competitors. The scale of economy could bring the chance for Zara to create the cost leadership. To be concluded, Zaras combination strategies are appropriate and profitable. 4.4 International strategies of Zara As one international firm, Zara has global strategies to compete in the world. To be more specific, in the beginning, Zara has attempted to expand its businesses into different parts of the world by various methods. For example, Zara has built many production bases in Asia where the labor cost is relatively low. Furthermore, Zara sells the products into the world based on the advanced logistic network. In addition, the promotion strategies are special based on the current situation of each religion. To be concluded, Zara provides one detailed and effective business model for the global trading, which can be also regarded as one source of competitive advantages.

5. Strategic implementation of Zara