ICA_Case 9_Zara in China and India

Q3. What are some of the unique key elements of Zara’s business model and
market strategy? How do they help sustain Zara value proposition?

Zara's Business Model and market strategy are:

VALUE DRIVEN -The Value drivers of Zara can be categorized into two- Tangible and
Intangible.
5 C's of Zara's Business Model
1. Co-Ordination
The Coordination between the Pricing markdown and Inventory distribution is the key
ingredient of Zara's business model. •
2. Commerce
Zara earns revenue from in-store, online sales, and special offerings of its products. But mostly
it fetches large amount of revenues from its in- store operation, which provides almost 18% of
overall discount.
3. Community
Its customer segment (Girls, Women, Men) plays a vital role in Zara's Business Model and to
build its customer base.
4. Content
The content identified with the items, their various classes, limits, and exceptional proposals
on Zara's site appears to be appealing to the clients and give pertinent data to the customers.
5. Communication
Zara generally speaks with its clients with the assistance of design shows where it depicts its
assortments. It additionally utilizes web-based media like Facebook, Twitter, Instagram,
Pinterest just as its web-based shopping site to do similar items, their various classifications,
limits and exceptional proposals on Zara's site appear to be alluring to the clients and give
significant data to them.

Market scenario of ZARA using SWOT Analysis

Strength

• Well known and established brands

• High quality products at low price
• Becoming highly innovative with technology
• Centralised distribution system
• Standardized product delivering services

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ICA_Case 9_Zara in China and India

Weakness

• Online customer service is somewhere lacking behind

• Online pricing is not consistent within
• Store pricing
• Weak Online presence
• Don't incur much cost on advertising
Opportunities

• Development of products and improving them for giving best shopping experience
• Further global expansion
• Product collaboration with outside sources
• Demand for high fashion at affordable prices
Threats

• High Shipping Cost

• Market Demand is often based on the current economic state
• High level of competition in the fashion market
• Emergence of newcomers with new ideas and creations

Value Proposition

These steps help Zara to sustain their value proposition

Delivers products that is of value to the customers

• Ladies/Men - Zara is conveying worth to its clients by giving a novel, customized, and
stylish garments also fashionable at moderate costs that have some additional worth
(nostalgic worth, emotional worth, beauty, legacy, and etc) to the client.
• Designers-Zara is conveying worth to its designers by giving them a stage to introduce
their quality manifestations to the clients.
Satisfies the needs of the customers that help them to get a job done or solve their problem

• Ladies/Men - Zara fulfils the necessities of its clients by giving them enormous
decisions of style and stylish items at moderate costs just as sensible quality.
• Designers-Zara fulfils the designers by making their creation mainstream according to
the clients.
Addresses the key pains and gains of the customers

• Women/ Men Pains- Expensive and costly designer’s clothes as well as problem in
finding centralised stores.
• Women/ Men Gains- Enabling the customers to feel fashionable at affordable prices
and facilitating them with centralised store location.

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• Designers Pains- Heavy cost of setting up their own fashion store and to reach customer.
• Designers Gain -Zara provide them a platform where they can portray their collection
to a large customer base with spending a large cost

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