CASE APPLICATION 1

Fast Fashion
9-14. How is strategic management illustrated by this case story?
Strategic management is the management of an organization’s resources to achieve its
goals and objectives , Strategic managementis illustrated in this case story In several
things Of which :
1. When Amancio Ortega, a Spanish former bathrobe maker, opened his first Zara clothing
store, and his business model was simple: sell high-fashion look-alikes to price-conscious
Europeans.
2. when Zara clothing store planned to do “fastfashion” which means getting designs to
customers quickly.
3. when Zara’s employees look at the computers to scrutinize sales at every store. In this
way they can see whatis being sold at every store and they are able to produce more of
the popular items.
4. when Zara produced most of its clothing close to homewhere they are being sold.

9-15. How might SWOT analysis be helpful to Inditex executives? To

Zara store managers?
SWOT Analysis is strength, weakness, threats and opportunities analysis, Zara is
owned by the Spanish fashion retail group Inditex SA. They recognize that success in
the fashion world is based on a simple rule which is getting products to market
quickly which involves a clear and focused understanding of fashion, the ability to
adapt quickly to trends, technology, and their market. SWOT analysis is helpful to all
businesses, Inditex executives, and Zara store managers because it is an analysis of
the company’s strengths, weaknesses, opportunities and treats. By doing a SWOT
analysis the Inditex executives can study the opportunities for the company to grow
and expand. They can also study about the threats to the company like negative
trends in the external environment. An internal analysis strengths of Zara is that
stores are stocked with new designs twice a week which is very quickly because

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 clothes are shipped directly to the stores from the factor approximately two weeks as
they ,and in this case SWOT is reflected in:
1. STRENGTH: The supply chain is Zara's biggest strength, as introducing a new design into
the market takes less time and this gives it a unique advantage over other companies ;
and the price is one of its strengths as well , as customers enjoy the fashion clothes at
reasonable prices , and zara providing huge online discount offers .
2. WEAKNESS: Zara always keep low stock. If there is huge need of demand they will not be
able to satisfy the customer demand.
3. OPPORTUNITIES: The Zara's unique design collection will attract customers to the stores ,
and ecommerce is easiest way to attract more customers and satisfy the existing
customers.
4. THREATS: Zara face stiff competition from their rivals from locally and globally ,as Zara
doesn't have collaboration with other international designers, But its competitors have
good collaboration with international designers,as International collaboration will help
to attract youngsters to buy.

9-16. What competitive advantage do you think Zara is pursuing? How

does it exploit that competitive advantage?
Zara is implementing a differentiation strategy, By using technology and just-in-time
production , the competitive advantage Zara is pursuing is lower prices thanhis
competitors with better speed and flexibility in getting the product to market , so they
are not pursuing a low-cost strategy, They are also not pursuing a focus strategy, in that
they are not focusing on only one side of the industry, This is an advantage over gained
over competitors by offering consumers greater value, by means of lower prices and
cutting age fashion.

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 9-17. Do you think Zara’s success is due to external or internal factors
or both? Explain.
I think Zara’s success is due to both internal and external factors, first let’s look at the
internal factors. At their headquarters they have a long row of computers analyzing sales
to see what fashions trends are a hit and miss almost instantaneously, and get almost
instant feedback regarding which items are and aren’t selling, and adjust accordingly.
Also once the new designs are sent in to the factory for production, computer programs
arrange and rearrange clothing patterns on the massive fabric rolls before they are laser
cut to minimize waste. Also their production factory’s “just-in-time production” gives
them speed and flexibility over their competitors . Now let’s look at the external factors,
zara saw that the slow pace that the clothing industry was moving at to get their new
designs in the store (6 months) and saw a way to make the process faster (2 weeks). This
was one of the reasons why they became so popular. Also their designs are shipping
twice a week and shipping directly from the factory to the store which wasn’t utilized by
the clothing industry beforehand.

9-18. What strategic implications does Zara’s move into online

retailing have?
Because Zara’s competitors are working to be faster Zara has come up with new plans to
stay ahead of the industry. To maintain Zara’s leading advantage, CEO Pablo Isla he’s
introducing online retailing to Zara. The strategic implication that this move has is that
they possibly have a way to send orders directly to home in a quick fashion because who
would late a long time to get clothing when they could get it at the store much quicker.
Also that this would allow them to event get sales reports quicker and to see which
designs are hits and misses because everything would be electronic and on the
computer already. This could also imply that they can send their designs to places all
over the world rather than being limited to just their physical store locations.

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