Zara-Fast Fashion Rough Notes

Zara-Fast Fashion Rough Notes - Zara Fast Fashion Case...

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Zara: Fast Fashion Case Study Issue Statement: As Inditex continues operations, they face a growth challenge between developing their lesser-known chains or establishing the most effective way to expand Zara into other geographic regions both within Europe and around the world. Analyzing Inditex’s retail chains, specifically looking at their most established Zara, will provide insight as to whether developing their other chains or expanding Zara will be a profitable risk for the company. Are they putting all their eggs in one basket by concentration on globalizing Zara instead of the other brands. Or should they reduce some of their brands and focus on the chains that are most profitable and merge Bershka, Osysho and Stradivarious into Zara since those brands were not as successful. Allowing the company to focus on the more dominant brands and reduces expenses. Currently they have 6 different strategy teams, distribution centers for each chain. Situational Analysis: Company: Zara is apart of a larger chain called Inditex. Inditex consist of 5 other retail chains including, Pull & Bear, Oysho, Massimo Dutti, Bershka, Stradivarius. Sells medium quality clothing and they do market research to determine how different countries preserve their clothing e.g. Mexico v. s. South Africa. They tailor their clothing to consumer taste Vertical integration strategy= more control over their product and reduces costs Zara is a fast-fashion market in which they are continually changing their clothing, which causes consumers to purchase the product right then and their because they know it may be gone from the selves in 2 weeks times if they wait. This places demand on Zara’s clothing and causes consumers to want to buy their products Zara listens to the consumers Fast-Fashion allows them to reduce risk of failed products because they replace their cloths every 2 weeks. Must have a lot of innovation They are trying to globalize their brand Cost are so high due to poor distribution strategies When Zara opened up in international markets they would first open their flagship store which gave them so exposure in the country, and then if it was successful expand locally and add stores in other areas They don’t spend money on advertising When entering into a new market they focused on market price than on its own costs in forecasting prices in a particular market
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Three different modes of entry into international markets= company-owned high profile countries with high growth and low business risk, joint ventures (two companies pool their resources to form a company) was used barriers to direct entry and used to obtain prime retail space and franchises (license a party acquires to allow access to their business) was used in countries that had small risky cultural differences and barriers to enter into the market. They mainly used franchising= nearly 1/3 of all international stores were franchised All merchandise was supplied through Spain
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