BCG Matrix of Zara

Zara is the Spanish clothing brand, founded by visionary Rosalia Mera and
Amancio Ortego in the Artexio Galicia, in 1975. It is popular because of selling
“INDITEX” which is one of the leading fashion retailers. It is currently
operating in more than 86 countries and has more than 7000 outlets across the
globe. Zara has very limited outlets worldwide, because of which, selective
targeting approaches and strategies are used for making the product availability
in market. As being a successful business, Zara also adopt some effective
strategies for the expansion purpose, and hence uses the usage-based
positioning approaches for highlighting the customer centric approaches in
order to satisfy the customer needs with the changing fashion trend across the
globe. It knows that the consumers want updated and new trends, and hence
targets the consumers exclusively on the basis of designs, and creativity (Adam,
2018).
However, all of this is possible by analysing effectively the company’s
strategies, approaches, and future options through various matrices. BCG matrix
is one of the most effective tools, which helps in analysing the strategic position
of different products in the product portfolio of the company. This deals in two
main dimensions; market share and market growth. Here is the detailed BCG
matrix analysis of Zara;

Cash Cows
The products in this category are the major source of the cash inflows in the
organization. Such products are successful in creating the strong market hold
and successfully develop the high level of market demand. Such strong position
helped the company in enabling the products for becoming the major source of
revenue for the entity. Trafaluc cloth range, Jeans, shoes and skirts are the cash
cow of the Zara. In the most competitive market, Zara is able to make its own
position by availing the share of 45%. The main competitors are H&M, Gap,
Gucci, etc. Many people in various countries know Zara because of its apparel
and accessories (Ketsadayurat, 2012).
Stars
These products help in generating the enough revenues for companies to be
known as profitable, but still have a chance for expanding as having star
products. The main reason of the future growth of star items is the scope of
industry growth, and consequently support the high market share of such
products. Fashion denim, Fashion jersey, and unique collection of bags and
accessories of Zara are the star items. Zara TRF and Zara man are also the star
items, with the estimated market share of 24% and 10%. Zara retain this
position with the help of effective marketing strategies like product
development, market penetration etc. (Bhasin, 2017).

Question Marks
In product portfolio, there are products that have the low profitability than star
products and cash cow. Along with the weak financial position of such business
units, it possesses the potential for future growth, but still the situation is
uncertain. If market conditions are stable and favourable, these products then
are able to grab the large market share to become the star item. Pull & Bear,
Bershka and Stradivarius are the question mark for Zara, which has 9.3%, 6.8%
and 6% market share. Zara’s kid segment is also the cash cow for the company
with 21% of market share (Adam, 2018).

Dogs
The products which are constantly underperforming, and consume more than
generating return, are considered as dog items. For Zara, its maternity wear and
underwear are categorized in this quadrant, as there are many competitors in the
industry which are dominating the market, and Zara is unable to make the space
for itself. Zara needs to invest more in this category to make it cash cow of the
company, or should shut down its operations, so that funds could be used
somewhere else (Ketsadayurat, 2012).