8. MANAGING ACROSS BORDERS. Executive Summary. Zara is

MANAGING ACROSS
BORDERS

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Executive Summary
Zara is a very big brand name in the market and they are expanding in the new markets so as
to increase their growth and profit margins. This report highlights the expansion of Zara in
the international market along with the internationalisation strategy that this company has
selected to remain a market leader. It was found that strategic approach to internationalisation
is followed by Zara. Following this approach a pragmatic process is followed by the
company. Due to this they made many strategies that can help them in their endeavours in the
new regions. Process of expansion has been fast. In this report it was also illustrated that Zara
made many strategies such as low pricing strategies, differentiation, fast supply chain etc. It
was also seen that Zara is facing different types of challenges in the emerging market such as
increasing rivalry, copyright issues, lower purchasing power, supply chain issues,
bureaucracy and Cultural gap.

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Contents
INTRODUCTION....................................................................................................... 1
Zara and its expansion.................................................................................................. 1
Approach to Internationalisation..................................................................................... 2
Process of expansion.................................................................................................... 3
Strategies used in the process......................................................................................... 4
Challenges faced by Zara in the emerging markets...............................................................5
Conclusion................................................................................................................ 6
References................................................................................................................ 8

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INTRODUCTION
Companies are crossing borders in different parts of the world. These companies are finding
these new markets so as to make sure that revenue sources get expanded. This is essential for
any company so as to gain competitive advantage over the rivals. There are multiple factors
that are creating challenges for the company in their international expansion. The
international business environment is getting complex (Bhardwaj and Fairhurst, 2010). This
complexity in the international environment is not letting companies to do their work as per
their requirement. In the process of internationalisation there are several processes and
strategies that need to looked at before actually making the expansion. From entry mode
strategies to the strategies related to international human resource management there are
different set of strategies that a company needs to deal with. Zara is a global brand for fashion
and is known for its fast fashion and trends that it brings in the fashion industry. This report is
going to illustrate the expansion of global fashion across borders into Asia. It also discusses
and critiques Zara’s approaches to Internationalisation along with the strategies and processes
it has utilised in order to gain success in the Asian market. In the later section of the report,
the problems and the challenges that are faced by the business while expanding into Asian
market are illustrated.
Zara and its expansion
Zara with its competencies like strong supply chain network, they are able to enhance their
reach in the global markets. Zara with their resources and high quality products have been
able to make sure that their expansion process remains smooth. Global fashion companies
like Zara which is one of the biggest apparel companies in the Inditex group has lot of
competitive advantage that gives them the control in the market. They deal in the business of
accessories, swimwear, perfumes, shoes, beauty and clothing. Till 2017, this company
manages more than 20 clothing collections within a year (Byun, 2013).
Zara started its international expansion in the year 1988 from Portugal. In 1990 they
expanded in France and United States. In 1992 they expanded in Mexico, while in 1993 they
expanded in Belgium, Sweden and Greece. In the beginning of 2000s i.e. 2002, this company
marked its expansion within Singapore and Japan. In Malaysian and Russian market they
have expanded in the year 2003. Morocco, Romania, Hungary, Estonia and China were
reached by the company in the year 2004. In Costa Rica, Indonesia and Philippines, Zara