Opportunity to build distribution centers in developing countries to lower

Opportunity to build distribution centers in

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2. Opportunity to build distribution centers in developing countries to lower costs 0.05 1 0.05 3. New designers for better designs 0.10 3 0.3 4. Rising environmental issues 0.05 4 0.2 5. International Recognition 0.20 4 0.8 THREATS 1. Fierce Competition 0.2 4 0.8 2. Lawsuit related to sweatshops 0.05 2 0.1 3. Possible imitation of goods 0.05 2 0.1 4. Dilution of Brand Equity 0.2 4 0.8 + TOTAL 1.00 3.45 The Opportunities of ZARA: 1. Increasing Middle Class in Asia weighs as 0.10 with a rating of 3; it is categorized as highly-rated since it is an important factor. Not only because Asia is a booming continent in which there are populous countries with growing GDP, but also because people in Asian countries have the taste which Zara offers for its clothing. Moreover, people in Asian countries, especially the teenagers and young adults are usually western oriented. Meaning, they like to follow the trends that the western culture currently has and adapt those trends in their country. One of those trends is definitely apparel. Zara‘s rating for this factor is 3, which indicates that
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14 the response is above average because Zara is expanding aggressively in these emerging markets of Asia (India, China, and Indonesia). They are also the first mover in these countries. Therefore, we conclude that they have higher response rate. 2. Opportunity to Build Distribution Centers in Developing Countries to Lower Costs weighs only 0.05 because even though it sounds interesting in order to cut costs of distributing the finished products, but there are problems that may occur, such as infrastructure problems in developing countries which might actually hamper the company‘s super efficient supply and value chain. That is also the reason why we put Zara‘s response as 1 or poor, because they are not interested in this option. 3. New Designers for better design weighs a 0.10 with a rating of 3; this is very important since they are based on fast-fashion which they need to change products every 2 weeks. Therefore, excellent team of designers is crucial in this business. Since Zara just cooperated with a lot of new designers, consequently their response is categorized as above average. 4. Rising Environmental Issues weighs a 0.05 with a rating of 4 or superior; They are keen to have a good reputation of being an eco-friendly company, they even set their mission regarding this issue, but too bad that sometimes the consumers do not care about the eco-friendly issue, especially consumers in Asian-emerging markets like India, Indonesia, and China. They simply want exclusive and trendy clothes. 5. International Recognition weighs a 0.20 with a rating of 4 or superior response; undoubtedly this factor is the most important for Zara‘s opportunities because it is the key to successful expansion. In case of Zara, it is widely-known across the globe with good reputation in most of the countries. Therefore, it is a winning point for Zara to have such brand image in the eyes of global consumers.
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