Introduction to the Company

Zara is one `of the most well-known brands in the world and is also one of the largest international fashion
companies. They are the third largest brand in the garment industry. Zara brands success Zara is one of the most
well-known brands in the world and is also one of the largest international fashion companies. They are the third
largest brand in the garment industry. It belongs to Inditex, one of the worlds largest distribution groups. The first
store of Zara was opened by AMANICO ORTEGA in 1975 in Spain. The store featured low-priced but high end
clothing fashions. In the first phase itself store proved to be the huge success and then ORTEGA began opening
more stores in Spain. During the 1980s company opted innovative strategy in manufacturing, design and
distribution process. The unique strategy of instant fashion proved to be great success. Almost 50% of the
products are manufactured in companys own factory, 24% in Europe and rest 26% in other Asian countries. Zara
has continually maintain its mission to provide fast and affordable fashionable items. Zara has developed a highly
responsive supply chain that enables delivery as soon as trend is in. Zara is unique in the way that it does not spend
money on marketing and instead concentrates on opening new stores. Zara is now called as one of the most
innovative retailers in the world. Zara boasts a marketing strategy of firstly product variety with a focal point of
ensuring speed to market. At present, Zara launch 10,000 new articles per year across their portfolio of stores. Zara
currently has 335 clothing stores distributed throughout Spain and almost 2000 stores across the world.

Products Offered
Zara stores have womens clothing and mens clothing, each of these sub-divided in lower garment, upper garment,
shoes, and cosmetics. The product range is not limited to men and women only but Zara also offers childrens
clothing called as Zara kids. Zara offers 35 different products having wide range of variety in each of its product. Be
it a formal, casual, royal, classic or any other. It offers the product according to range wise so as to alter the need of
its customer. Not only in clothing, has it also offered trendy bags, accessories to suit every individuals need. As
Zara believes that the customer is at the unique of its heart.

Internationalization of Zara
As the stores in Spain proved to be huge success, company started to expand its business internationally. In late
1980s Zara opened its first international store in Portugal. Then they entered the market of New York in 1989 and
Paris in 1990.
Company didnt stop here, then it tapped the markets of Mexico in 1992, Greece, Belgium and Sweden in 1994. The
expansion of Zara keeps on growing until it achieved its target of being one of the popular brand among the world.
Today Zara has almost 2000 stores across the 88 countries in the world.



Competitors of Zara
Being the fashion company, Zara has to face tough competition. As fashion industry is one the most fast-paced and
fast moving consumer market. This industry attracts numerous consumers who are style conscious and are up to date
with the emerging trends and fashion. At most, Zara has to face tough competition from the following:
H&M
THE GAP
BENETTON
FOREVER 21
TOPSHOP
Zara got intense competition from all of the above. But uniqueness in designs, process, manufacturing, and price
gave competitive advantage to Zara over all other.

Visions of the Zara
Zara is committed to satisfying the desires of our customers and promise to continuously innovate the products
offered. Not only this, Zara assures the best quality at affordable prices. Vision of Zara is:
To attain market leadership through unmatched quality, a diverse and unique product mix, empowered
employees, world-class systems, and the highest ethical and professional standards.
To be number one fashion retailer

Mission of Zara
Business model of Zara is designed in such a way that it aims to contribute to the sustainable development of society
and with the environment with which it attracts. Mission statement of Zara is:
The world is getting smaller; we want the whole world to dress in style, class, and experience unique
designs weekly.
Eliminate waste by being in the right place at the right time.

Growth Strategies of Zara
Zara has a unique strategy in its product, design, marketing and distribution. Due to its strategies, it is able to
compete in the market very efficiently. Different strategies are as follows:
Maintain quality
Cost leadership
Well-coordinated management information system
Ability to produce new designs at every two weeks
Improved distribution system
Keeping up with instant fashion
Diversified product range

Zaras Business Model
1. Develop system that require short lead times
2. Decrease quantities produced to decrease inventory risk
3. Increase the number of available styles and choice.
4. Introduction of new designs after every two weeks.

SWOT Analysis
STRENGTHS
1. Ability to recreate fashion
2. Active use of 2000 stores
3. Cost leadership strategy
4. Differentiated in high price fast fashion industry
5. Dedicated supply chain process
6. Efficient distribution and high turnover
WEAKNESS
1. Centralized distribution system
2. Doesnt spend much money on advertising
3. Sales of out-of-stock
4. Lack of online stores in some countries

OPPORTUNITIES
1. Expanding new potential market
2. Use of social media as marketing strategy
3. Developed market in U.S
4. Diverse cultural area




THREATS
1. Lack of opportunities in Europe
2. Limited stock per design
3. Many new local competitors
4. Cheaper alternatives emerging as substitute

Problems with Zara
Zara is facing a large number of issues which can cause them a number of problems in the future. Despite the fact
that Zara has a consistent business system which gives them a competitive advantage it is always in the danger of
tanking badly. Zaras biggest advantage is the fact that its economies of scale are really good and that they have
been able to ramp up their distribution system. The continued growth is good for them in every way. They have been
helped a lot by their expansion in the international market. However their growth in the international market will be
curtailed due to the reason that Zara has a very centralized logistics model. It is understandable that Zara has to
expand its distribution centers and to increase its capacity. Zara has its main distribution center in Spain and it wont
be easy going trying to expand when their base is only in Spain.
This will affect their plans to go international and to target more regions. They cant simply survive with a European
presence alone. It is true that they do have a presence in other countries but then it is not as much as it should be.
They have a huge presence in Spain but quite limited when it comes to other countries. They can easily target the
North American region where they dont have much of a presence compared to the huge size of the region. The
problem is that there are a lot of outlets there and a lot of competition coupled with the need for plus sized clothing,
high cost of operations and a very mature market. Zara needs to come up with a strategy so they can compete very
aggressively over there. They can also target South America but the problem is that it is not a very stable region and
any geopolitical problems can lead to profits being low. A good market would be the ever reliable Middle East
where Zara already has a small presence. However with talks of revolution in the air and other geo political
problems it can be a risky bet. There are a few countries in the region which will lead it to be profitable but then the
market is small compared to other regions. They can easily opt for countries such as the South East Asian markets
and South Asia which have a lot of potential.

Recommendations
Zara can easily go around and expand its operations in many ways. The best thing would be to take it easy for the
short term and to go for further expansion in Europe. Spain and Italy are neighbors and the fact that Zara has its
main distribution center in Spain will make it easy for Zara. For the time being they dont need to open any more
distribution centers as they can work with regions which are quite near in proximity to them. Italy is one of the most
fashion savvy countries in Europe along with France. Zara already has 70 plus stores in the country but then they
can do a lot better. They can enhance their presence in the market and try and take some share from some of its
known rivals such as Benetton and H&M. the biggest way for Zara to expand is to try and open another Distribution
Centre in Eastern Europe and to be able to expand its operations in Eastern Europe. A number of countries are
coming into the European Union and are ripe for the picking. They already have a presence in some countries but
the number of stores per region is not as much as it should be.

CONCLUSION
All in all, Zara has a growing market share in the world expanding almost across the world. With the huge active
stores throughout the world, making the Zara more and more competitive. As success or failure depend upon the
strategies and working style of any business. Zara has a unique working style of being innovative and also providing
trendy products at affordable prices to suit the needs of different individuals. Innovation in process is another feature
that reduces its cost as compared to its competitors, giving it a competitive advantage. Finally, Zara has been
accredited with the term INSTANT FASHION for creating the trends.