Zara Business Strategy Analysis Report

Running Head: Business Strategy
0
Business Strategy
Report
Student Name
3/8/2019

Business Strategy
1
Executive Summary
Zara is a well-renowned brand in clothing fashion industry, all across the world and doing very
well in all areas by satisfying demand of the customer speedily using its large outlets and trendy
collection that is their product differentiation. Success of Zara is mainly depends on their
strategic decision and ability to take risk in this changing environment. The formulation of
strategies require proper analysis so this report consists of an environmental analysis that is
conducted on company’s operating environment which includes its value chain, production
system, designing, marketing, stock handling and infrastructure of company. The analysis gives
the competitive analysis of Zara, as well as their weaknesses, opportunities and threats in
current market. The project highlights current strategy used by Zara which is analyzed or
examined with help of SAF model of analyzing business strategies.

Business Strategy
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Table of Contents
Introduction.................................................................................................................................................3
External Analysis..........................................................................................................................................3
Opportunities and Threats.......................................................................................................................4
Industry Analysis......................................................................................................................................4
Internal Analysis..........................................................................................................................................6
Strengths and Weaknesses......................................................................................................................6
Core Competencies.................................................................................................................................7
Strategy Evaluation......................................................................................................................................8
Conclusion.................................................................................................................................................10
References.................................................................................................................................................11

Business Strategy
3
Introduction
Zara is a fashion brand that offers high range of clothing for men, women and young adults in
the fashion industry. It is a popular fashion designing and manufacturing company started by
Mr. Amancio Ortega in Spain under the umbrella of Inditex Group. Zara has 2000 plus outlets in
72 countries and expanded globally in different parts which shows great potential and success
factors of the company (Forbes, 2018). All outlets are designed in a manner that gives a special
atmosphere to the customers for buying fashion which supports the main objective of the
company that is to continually offer a product that satisfied the needs of customers, at the right
time, with the latest fashion trend in the industry (Joy, et al., 2015). Zara is a market leader in
the apparel industry just because of its uniqueness in design of clothes and understanding the
preference of the customers in fashion market trends. The main strategy of Zara is based on
concept of delivering varieties of good quality clothes to its outlet in small quantity for limited
period of time on affordable prices, which attract customers to purchase the latest designs that
are in trend and in next week updated there outlets with another trendy fashion (Caro &
Albeniz, 2016). All these strategic decision require proper analyses of the company strengths
and weaknesses and the opportunities and threats that are prevailing in the industry. Each
business has its internal and external environment that helps the company to formulate
strategy and plans for the future.
This study helps in knowing the Zara business environment which consists of external analysis
of the company and includes identifying opportunities and threats in market and also getting
insight of the industry attractiveness through five forces model. The study also focus on internal
analysis of the Zara, that include company’s strengths and weaknesses, competitive advantage
and core competencies with help of VRIO framework. The report also provides the current
strategies implemented by the company and using a model of the Suitability, Acceptability and
Feasibility (SAF) for each strategy evaluation.
External Analysis
All businesses have to operate in this changing environment and to face many challenges
related to the external forces that impact the success of the business. It is necessary before
formulating business strategy to analyze the external environment and identify opportunities
and threats in market as well as finding industry attractiveness. (Hammoudeh, 2015).
To make strategic decisions and for evaluating the strategies it is necessary to understand the
environment of the Zara. Hence, external analysis of Zara is discussed below.