IBS 2016-17 Sem2 Topic 3 - Exploring the Firm (S).docx

IBS 2016-17 Sem2 Topic 3 - Exploring the Firm (S).docx -...

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International Business Strategy STUDENT’S COPY ____________________________________________________________________________________ _________ SINGAPORE POLYTECHNIC Prepared by: AH BUSINESS SCHOOL Moderated by: RT 2016/2017 SEM 2 Date: October 2016 Topic 3 : EXPLORING THE FIRM TUTORIAL ASSIGNMENT TUTORIAL LEARNING OUTCOMES: 1. Conduct an internal analysis of a firm’s resources and capabilities. 2. Analyse a firm’s competitive advantage using the VRIO framework. 3. Analyse a firm’s competitive advantage from the perspective of its value chain activities. SECTION A – CASE STUDY Zara Breaks Industry Rules Zara is one of the hottest fashion chains of the 21 st century. Founded in 1975, Zara’s parent, Inditex, has become one of the leading global apparel retailers. Since its initial public offering (IPO) in 2001, Inditex tripled its sales and profits and doubled the number of stores for its eight brands, of which Zara contributes two-thirds of total sales. Headquartered in Spain, Zara is active not only throughout Europe, but also in Asia and North America. As of 2008, the total number of stores was over 3,100 in 64 countries (the three newest countries entered were China, Serbia, and Tunisia). Zara stores occupy some of the priciest top locations: Paris’ Champs-Elysees, Tokyo Ginza, New York’s Fifth Avenue, and Dallas’ Galleria. Zara’s formidable ruse around the globe has generated significant profits. In terms of sales, gap is still bigger (US$16 billion) than Inditex (US$12 billion), but Zara’s 16.5% margins beat Gap’s 11%. Overall, Zara succeeds by breaking and then rewriting a number of rules about competition in the fashion retail industry.
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