c Brand image closely tagged to competitors As mentioned earlier the problem in

C brand image closely tagged to competitors as

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we rank a low rate of 1 out of four with larger weight of 12%. c. Brand image closely tagged to competitors As mentioned earlier, the problem in apparel industry is that it is very easy to copy each other’s designs. This weakness is one of the toughest to deal with. Beside Zara, there are a lot of other brands that reach the international market that also build an exclusive image for them self. Therefore sometimes public cannot differentiate product from Zara and their competitors. In other words, it is going to be easy for them to switch from one brand to another. Moreover, this will affect people’s
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27 judgment that all the brands that in the same level as Zara is actually the same or similar in term of types and products, or in other words, no clear differentiation between those brands. As a player in this industry, Zara needs to obtain consumer loyalty; therefore, we rank this weakness as their major weakness with rating 1 out of 4. However, the weight of this factor is not that high since in apparel industry, despite the existence of problems in the designs differentiation, a brand can develop a strategy to build consumers’ loyalty, just like what Inditex is trying so hard to do to its brands, including Zara. d. Lack of Marketing Zara is lack of marketing such as promotion and advertisement. In Indonesia it is very rare to see Zara logo and advertisement outside the store and in public area. In fact, Zara in different countries also does not have that much of advertisement. They only depend on the strong brand image that they already have. This can be a tough weakness if the competitors keep on increasing their marketing strategy, especially in emerging countries. From all the strengths and weaknesses we come out with the result of 2.35. This is an average result from a perfect score of 4. So we can conclude that their effectiveness in utilizing their strengths to cover the weaknesses is satisfactory enough. 4.3 Financial Analysis LIQUIDITY RATIO Current ratio defined as how much power does the current asset can cover current liabilities. The result shows that both in 2011 and 2012 the current ratio is above 1, which is good for the company as their asset have more power to cover the liabilities from their assets. 2012 2011 Quick Ratio 1.4589 1.4366 2012 2011 Current Ratio 1.5180 1.5104
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28 Quick ratio basically has the same indication like current ratio. But quick ratio only looks from the company’s quick asset. So inventory is not included in the formula. The result shows that the quick asset of the company still could cover the liabilities that they have. LEVERAGE RATIO 4.4 This ratio is to find out how much from the total asset that financed by the total debt. The higher the result will cause a higher financial risk. A healthy company should have a low debt to total asset ratio because they need a more flexible finances. Debt financing could lower the degree of flexibility. Zara in both 2012 and 2011 had a low result on this ratio, which means only a small amount of the total asset that financed by the debts.
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