Zara Fasion King
Case discussion
ZARA: FAST FAHION 1) What is Zara’s basis of competitive advantage? How does it travel globally?
At the heart of Zara 's success is a vertically integrated business model spanning design, just-in-time production, marketing and sales. The key to this model is the ability to adapt the offer to customers desires in the shortest time possible. For Zara , time is the main factor to be considered, above and beyond production cost. The group believed that vertical integration gave it more flexibility than its rivals to respond to fickle fashion trends. With the European markets becoming saturated, Zara had been looking at stretching its product line and furthering its global expansion.
To support its’ globalization, Zara established 3 souring companies in Hong Kong for purposes of purchasing as well as trend-spotting suggested that sourcing from Far East, particularly China, might expand substantially. In terms of distribution, Zara’s system includes larger facility in Arteixo and much smaller centers in Argentina, Brazil and Mexico that consolidated shipments from Arteixo. It consistently invest in prime locations of their flag store in each new entered country, minimizing advertisement expense while keep effective “word of mouth” among target customers. 80- 85% of the products that the company offers globally are relative standardized fashionable products while keep some difference in consideration of size and culture-diversity. Localized management team also guaranteed operation effectiveness because of their culture awareness. In terms of pricing in new entered market, Zara define the price different from that of local market under consideration of two-folds, target populations and local purchase capability.
2) What do you think of Zara’s past international strategy? Evaluate, in particular, its past strategy for market selection , its mode of entry , and is standardization of its marketing approach.
Its’ past international strategy
ZARA: FAST FAHION 1) What is Zara’s basis of competitive advantage? How does it travel globally?
At the heart of Zara 's success is a vertically integrated business model spanning design, just-in-time production, marketing and sales. The key to this model is the ability to adapt the offer to customers desires in the shortest time possible. For Zara , time is the main factor to be considered, above and beyond production cost. The group believed that vertical integration gave it more flexibility than its rivals to respond to fickle fashion trends. With the European markets becoming saturated, Zara had been looking at stretching its product line and furthering its global expansion.
To support its’ globalization, Zara established 3 souring companies in Hong Kong for purposes of purchasing as well as trend-spotting suggested that sourcing from Far East, particularly China, might expand substantially. In terms of distribution, Zara’s system includes larger facility in Arteixo and much smaller centers in Argentina, Brazil and Mexico that consolidated shipments from Arteixo. It consistently invest in prime locations of their flag store in each new entered country, minimizing advertisement expense while keep effective “word of mouth” among target customers. 80- 85% of the products that the company offers globally are relative standardized fashionable products while keep some difference in consideration of size and culture-diversity. Localized management team also guaranteed operation effectiveness because of their culture awareness. In terms of pricing in new entered market, Zara define the price different from that of local market under consideration of two-folds, target populations and local purchase capability.
2) What do you think of Zara’s past international strategy? Evaluate, in particular, its past strategy for market selection , its mode of entry , and is standardization of its marketing approach.
Its’ past international strategy