Zara's International Expansion Strategies

Human Resource Planning
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Company Brief
Zara is a Spanish organization operating in the fashion industry in different countries. This
organization is a multinational organization and it is currently operating in around 50
countries. Zara is considered as largest apparel retailer of the world. First store for this
organization was started by Amancio Ortega in the year 1975. Over a period of time it has
expanded their business operations internationally through expansion strategies such as joint
venture, franchising, and formation of subsidiaries. Quality and variety of product provided
by Zara have contributed significantly towards the popularity of Zara's product in the market.
What has Zara done to expand internationally?
There is a different type of strategies that are used by Zara for international expansion.
Following are three international expansion strategies that were used by Zara-
Subsidiaries
This method of entry in an international market is considered as the most expensive and
risky. 100% owned subsidiary is established in different countries for international expansion
through subsidiaries. This method was used by Zara where there was the scope of high
growth and low risk. This is strategy help to Zara to expand its market in Europe, Brazil, the
US, and Spain (Mo, 2015).
Joint ventures
According to this strategy business organization tend to join hands with a business
organization that is operating successfully in a particular country. This type of strategy is
used when there is a lot of competition in the market and there are some restrictions on entry
in the market (Mo, 2015). This strategy has been extensively used by Zara for international
expansion. Zara established different joint ventures with business organizations like Biti and
TATA group.
Franchising
This is strategy was used by ZARA for markets with no expectations and higher risk.
Licenses were provided to local apparel organizations to sell product and services of ZARA
and these local organization are entitled to retain commission on the total sales (Lopez and
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