Business Strategies Report of Zara
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Added on 2020-07-22
Business Strategies Report of Zara
Added on 2020-07-22
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MANAGING INFORMATION ANDTECHNOLOGY
CONTENTSINTRODUCTION.......................................................................................................................................1BUSINESS STRATEGIES OF ZARA........................................................................................................1Market-oriented strategy..........................................................................................................................1Production strategy..................................................................................................................................2Supply chain strategy..............................................................................................................................2EXTERNAL BUSINESS ENVIRONMENT ANALYSIS OF ZARA........................................................2PESTEL analysis.....................................................................................................................................2INTERNAL BUSINESS ENVIRONMENT ANALYSIS OF ZARA.........................................................4SWOT analysis of Zara...........................................................................................................................4COMPETITIVE ANALYSIS OF ZARA....................................................................................................5Porters five force model..........................................................................................................................5PORTER’S VALUE CHAIN ANALYSIS OF ZARA................................................................................6Primary activities.....................................................................................................................................6Supporting activities................................................................................................................................7THE ROLE OF IT IN HELPING THE BUSINESS TO GAIN A COMPETITIVE ADVANTAGE..........7CONCLUSION...........................................................................................................................................8REFERENCES............................................................................................................................................9
INTRODUCTION For each and every business, whether small or big, information technology has nowbecome a, integral part of their business plan. IT plays an important role in successful operationof every business concern. Recently, companies are more dependent on information technology.However, its best use can be unweave by how it is being used in all across the globe (Johnsonand Scholes, 2002). Thus, it becomes essential for the firms to manage the information andtechnology so that they can achieve a competitive edge over the other firms in the market. In thispresent report study, the business environment of Zara will be analyzed by conducting internaland external analysis. Various strategies of the company will be evaluated and a thoroughunderstanding of its value chain analysis will be done. In addition to this, the role of informationtechnology in achieving the competitive advantage will also be discussed. Zara an international fashion retail brand has opened its first store in Spain in the year1975. It is one of the leading brands of the high street fashion industry and is manufacturing newmerchandise regularly. The organization encompasses various styles ranging from casuals toformal, daily wear clothes to fashionable, kids, men and women wear etc. all in one it can be saidthat it offers complete shopping at one place and one can find solution for people of all the ages.Zara has strong supply chain management and because of that it is able to charge the pricequicker than its rivalries can achieve (Kumar and Linguri, 2005). Despite all this, Zara is facingvarious challenges and thus it becomes vital to analyze its strategies. Company was able toachieve a competitive advantage in the market through its efficient supply chain management.Further, they make use of their strengths and opportunities to become stronger within the highstreet fashion industry.BUSINESS STRATEGIES OF ZARA Market-oriented strategy The strategies adopted by Zara are very clear and simple. The pace of the inventory rollover is very fast that even the customers are sacred that if they will not purchase the goods beingliked by them, they will not able to get the same product on their next visit. This is beingperformed by the firm in various loops. Firstly, they identify the newest trends in the market,1
design the products as per the trends, manufacture in factories, ship items to the stores and lastly,sell to their valuable customers (Lopez and Fan, 2009). In addition to this, Zara also payattention towards listening the requirements of the clients and offer prompt services to them. Production strategy Zara has nearly about 200 creative designers as well as specialists. The team works incollaboration on various clothing, manufacturing and building styles. Further, they take in toconsideration Just-In-Time (JIT) technology in order to reduce the time and efforts. At themoment, the company’s lead time is unbeatable in the high street fashion industry. Supply chain strategyCompany focuses on fast moving fashion, and thus produces such products in and aroundSpain. They also do not outsource anything from the manufacturers of China, rather they makesuse of cheap Spanish, Middle Eastern and Asian labor to manufacture the products and put onthe stores in a week. EXTERNAL BUSINESS ENVIRONMENT ANALYSIS OF ZARAPESTEL analysis Political – Talking in regards with the political aspects, the market is generally open forall and textiles are very easily available. It is not subject to any kind of regulations orquotas. Pertaining to this, there is an intense competition among the companies in themarket. In addition to this, organizations are making necessary steps to reduce the costsas well as to attract more and more customers (Mittal, 1988). There is a greater level ofprice wars within the market due to the deregulation in the textile industry especiallyfrom the point of view of “Quota”. However, companies which have large scaleproduction like Zara are enjoying economies of scale. Economical – The economic factors impacts the fashion industry greatly. Due torecession all around the globe, customers are in trouble to spend their income. This isturn compelling customers to cut out their expenditure on items like clothing, fashionitems and accessories. This situation is very painful in regards with the retailers, as theyhave to provide cut edge fashion at reasonable price. Zara has been successful in offeringgoods at this economic difficulty times. 2
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