MORE ABOUT
ZARA COMPETITIVE & COMPARATIVE ADVANTAGES
VALUE CHAIN
CORPORATE AND TRADE STRATEGY
ANALYSIS OF ZARA
BARRIERS AND OBSTACLES
EBC Reforma Eliezer Quezada C.
Internal Information. The company Inditex, with its eight teach, is the company's largest textile distribution in Spain and the largest in the world. The success is mainly due to a differentiating strategy, with many strengths:
Just in time
A huge strength is thus not stored clothes and no money is lost inventories. Strong financial system The financial system in which the Inditex group is supported for many years is one of their strengths ago.
Quality and design
Mini-collections every year
Mainly all Inditex brands offer a quality product and innovative design.
Inditex, on the other hand, broke with the practice of other
Control over the entire value chain: As discussed in the analysis of competitive advantage, Inditex by a unique business model in the field of fashion retailing, in which vertically integrates all major activities of the stands chain including the design of value models, production of garments, the logit models input and output as well as sales in company stores. Such control will attract a very important bond strength of speed and flexibility against its competitors.
fashion retailers only designing clothes for two seasons: spring-summer and autumnwinter. Culture instantly buying With the system of high turnover products, Inditex has managed to instill its customers a new philosophy in Spain and unusual in other countries, consisting of buying at the moment because the models are removed if not sold for replace them with new ones.
Prestigious brands Another strong point of the company Amancio Ortega is the Inditex brand has a high reputation worldwide which gives it more value. Strong international presence
With the consolidation as a leading brand in the Spanish market, Inditex could enter the international market and thus further increase its growth because the domestic market was saturated. The internationalization was a resounding success and currently more than 4,500 establishments located in 73 countries Inditex. Throughout the 22 years of having established its first store abroad it has been increasing its market rate.
return a product so that everything becomes easy for customers. Attractive window: This is not the only tactic is to incite the purchase Inditex, windows are another attraction. They are bright, with light backgrounds and little product, but attractive enough to catch the attention of passersby and thus invite them to enter.
Segmented Offer Inditex also covers all available market segments because its eight brands. Homogenous group: A fortress over Inditex brands is that all follow the same strategy worldwide so the consumer knows what to expect when Inditex creates a new logo or a new store opens.
PUBLICITY Unconventional:
SHOP More than mere sales outlets: In addition to having a similar distribution and the same decor, all Inditex stores are located in prime locations in major cities and commercial areas. Comfortable post-sale system: Another advantage of this organization is their return policy. There is great flexibility to change or
Bags also used as advertising system, which is probably the best advertising you can have a company because it is the one that is made by its own customers. So word of mouth is probably the agent generates more publicity about the company and of course the most reliable for the consumer.
Use of new technologies:
For some time, companies Inditex use the Internet to promote their brands and
products. All banners have their own website, designed in keeping with the style of the product and thinking about your target audience
Competitive advantage.
Competitive advantage is outperforming your competition.
about
There are several approaches of how Mango can overtake market shares from Zara. Both Zara and Mango are competing for the same customers, so the approach is differentiation in product line is hard to achieve when they both want to sell fashionable cloths for women. One approach that is common in competitive advantages strategies is that you sell your products to a lower price than your competitors. That can be a strategy that Mango can try to attract customers. Another approach that Mango can try is to achieve operational efficacy. If Mango can perform internal business, better than Zara they have a lot to win. For example if they can cut costs of production, speed up the business process and make sure that investors have a good reason to invest in Mango instead of Zara they can have a great advantage and save a lot of money.
Comparative advantage. Zara broke the patterns; rules appeared to be the key to success and imposed new tactics. That made differently placed to the consumer without any advertising or anything, it was a great business grew by word of mouth advertising, unlike other brands. The success of Zara and the added value of their products as compared with other designers and brands, so does its ability to respond to rapid fashion, according to what the consumer asks. Fashion changes meant big problems, but Zara found this as an opportunity: to encourage continuous fashion changes. Collections designed, manufactured, distributed and sold are the same speed with which the fickleness of customers changed their tastes. The supply of clothing is made at a moderate price. Zara is quality, fashion, immediacy and style. It produces 60% of its inventory in its own factories. The fabrics come from Spain, the Far East, India and Morocco. They cut and painted in their factories to 'rage' and sent to sewing workshops in the area.
Value chain.
Corporate and trade strategy. •
One of the strategies that helped to be better, was the just in time which helped to have a supply chain which allowed to have new inventory in the stores twice a week. the also used this technic to introduce new products.
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Another tactic they used it was that all the production is produce in Spain and Portugal. This helped a lot to supply the market fast and effective. This is another example why they are better than the competition.
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For marketing they use YouTube and social media and they focus in this sources because their target market are young people and they just only invest 3 % or 5% of their budget in marketing
This is what they do to be competitive and be always onestep forward of their competition.
Barriers and obstacles.
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Because of the low price that they have, some consumers think that the clothes don´t have quality or they think they don´t differentiate from the others because everyone buys clothes there. Other companies sell the clothes in a higher price with better additions because of the cost of production, so they can´t keep the customers satisfied all the time. The clothes change every time but they use the same models and they modify them, this is a huge disadvantage because other companies have all new clothes to offer every season. Inditex also manages a lot of stores and they offer almost the same clothes and same prices, this affects the company negatively. Human Resources is pretty bad, hiring people with no experience, other companies hire because of the experience and makes it harder for them to grow and because of this issue, there is no control in the company. The main distributor comes from Spain so the transportation costs are really high and the competitors are distributed around the world so it’s cheaper and easier for them to supply their stores.
The competitors have other brand and they´re expanding the market producing watches, wallets, belts and even perfumes.