Zara SWOT Analysis and Business Report

The assignment provided is a detailed report on Zara's business, including its structure, operations, products, innovations, capabilities, and achievements in 2019. The report also conducts a SWOT analysis of the company, identifying opportunities and threats in the market. The report provides a comprehensive overview of Zara's business, making it suitable for students studying marketing, management, or business strategy.

MANAGING INNOVATION
IN BUSINESS-1

Executive Summary of Zara
This report was prepared to know about the innovation strategies used by Zara and how
the innovation helps Zara & retail industry in achieving success over the year. An overview
about the operations, performance & products of the Zara & its related industry was discussed in
the report which shows that Zara is the top most clothing brand which offers variety of
innovative designs to its customers across the globe. It was found that Zara is retail brand & it
comes under the preview of Retail Sectors. After that Zara's innovation history shows that
managers of the company was able to resolve all the problems related to the innovation such as
style & marketing problems. Zara was offering designing its product according to the demand &
choice of its customers which leads to increase in customers of Zara. Company was using
various innovative technologies for receiving feedbacks from the customers, selling its product
online and for managing its inventory. Zara was also managing innovation by adopting law
pricing strategy and by offering new designs twice in a week. Company also received various
awards in current year. At last this report shows, SWOT Analysis of the company according to
that law pricing strategy and global presence was strength of the company, threats for the
company was new entrants and opportunities for the Zara was market penatration.

Table of Contents
INTRODUCTION...........................................................................................................................4
PURPOSE OF THE REPORT & STRUCTURE............................................................................4
THE ORGANIZATION & INDUSTRY OVERVIEW...................................................................4
THE ORGANIZATION & ITS INNOVATION HISTORY..........................................................5
THE ORGANIZATIONS EXISTING INNOVATION PERFORMANCE & CAPABILITIES....5
THE INDUSTRY IN 2019..............................................................................................................7
CONCLUSION................................................................................................................................9
.........................................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Innovation management is a process done by managers of the company in which
managers made innovation in the business process & products So, that the business can achieve
success and win over its competitors.
PURPOSE OF THE REPORT & STRUCTURE
Purpose of this report is analyzing innovations done by the company & its related
industry and to find out that how those innovation helps Zara in enhancing revenue & market
share. Zara is a global retailer which offer clothes & accessories and it comes under the retail
industry. This report, gives an overview of operation of Zara and its industry. Further, this report
elaborate innovation history of the organisation. Furthermore, this report includes existing
performance of innovation in the firm and capabilities of the company. At last, this report
explains position & achievements of the organisation in 2019.
THE ORGANISATION & INDUSTRY OVERVIEW
Zara is a multinational retailer which offers variety of fashion frenzy clothes &
accessories in all the countries across the world. Zara is Spanish company which has its
headquarter in Arteixo (Spain). Zara is worlds the largest retail fashion brand of Inditex Group.
Inditex Group is a fashion group which offers various fashion brand and it is also parented
company of Zara. Zara offers clothing ranges for man, woman & children. Zara offer &
manufactures its products according to change in fashion and market demand. Zara operates with
in retail industry or sector. Because, when the cloths & accessories are manufactured they are
needed to sell in the market and which becomes possible only through retail sector.
Retail is an activity of manufacturing & offering consumer products & services to the end
users with the aim of earning profits. Thus,. Retail industry is a sector which offers products &
services to the consumers through different channels such departmental stores, online websites,
showrooms, shops and shopping malls. Retail industry deals which variety of products such as
cloths, furniture's, foods, jewelry etc. Retail industry is most developed industry and it
contributes two-third to the economy because, retail sectors deals in consumers goods. Retail
industry also leads to market growth and economic growth(Nenonenb and Storbacka, 2018.).

THE ORGANISATION & ITS INNOVATION HISTORY
Zara is a fashion retailer and it is a subsidiary of a largest retail fashion group. Zara is
established its 1st store in 1975 in the Spain and its founder is Armancio Ortega and after that
company expand & make innovation in its operations and becomes the most popular retail
clothing brand. Thus, we can say that Zara is the best example of innovation. Zara expanded its
business by establishing more stores in Portugal, united states, Greece, Belgium, Sweden and
many more countries after 1989 and as of now the company is operating across 96 countries with
10000 stores. Zara expand its market by establishing innovative & trendy shops & websites it its
one of the best strategy used by Zara in innovation. Zara innovation history consists of three
steps At first, Zara focuses on offering cloths & accessories according to the demand & choice of
the customers and the company also manufacture its products by using new & innovative
technologies Second, step is to increase sales volume and the last step is to repeat this two
process again & again. Following this three steps is not so easy because it is very difficult to
become unique & to offer unique products in the market for Zara. Every fashion brand faces two
problems to innovate its products which is style problem & marketing problem and Zara finds
innovative solutions for both the problems. Zara ships new design to all its stores twice in a
week and 18000 designs of clothes annually. Thus, respond to the market demand quickly. Zara
also resolve problem of marketing not by promoting its products but by establishing innovative
& trendy stores. Zara does not invest its profits in promotion rather it invests its money in
making unique stores(Viardot and Nylund, 2017).
THE ORGANISATIONS EXISTING INNOVATION PERFORMANCE &
CAPABILITIES
Zara is a successful brand just because the company uses flexibility & innovation in its
operations. Companies golden rule is to offer new fashion frenzy product in the market so that
the customers get attracted and which in turn enhances profits of the company. Zara's existing
innovation model & capabilities is discussed below-
New Ideas from Different Markets & People- Zara does not focus on producing new products
rather it focuses on making innovation in its manufacturing process and in the designs of its
outlets & online websites. Operators of the company make a survey and collect designs &
innovative ideas from various Instagram blogs, twitter, magazines and books. Around 350
employees are employees in the design team of the company and they modify design according

to the customers review and fashion. After taking surveys from different markets and customers
company started producing non-toxic clothes to satisfy its customers demand.
Shipping New Designs in the Stores- Zara offer new designs to each of its stores twice in a
week and currently Zara also shipping more of new designs to its online websites. Zara is
capable to produces 360 design in a week and now it is offering all of this design through social
media & online websites. Companies business & customer base is growing because it is offering
innovative & new designs in the market(Noe and et.al., 2017).
Innovate New Technologies- Zara introduces new technologies in its business. Company is
capable in offering its products through 48 online websites in all the countries across the world.
The company is using new technologies for collecting reviews from its customers, for promoting
its products and for offering its products. Company is taking feedback & reviews from its
customers and promoting its products by using social media such as Instagram, Facebook, email
and twitter. Company also introducing fast software's for supply chain management, data
management & data tracking which helps the company in smooth functioning of its operations.
Currently, Zara also made an innovation in its stores by adding sensors in its mannequins so by
tapping on the mannequin customers get to know that this outfit is weared by that particular
celebrity this innovation attracts customers and grab interest of the customers towards that
product. Zara also uses RFID technology in its store according to this technology security tags
are connected with each of its products and this helps the company to manage inventory. This
technology also helps the company in determining amount of sales made by each store in a day
and it also helps the staff member to find the product because with these members of store can
track the product(Process Innovation – Zara. 2016).
Prototype & Model- Zara also uses various prototype & models which helps the company in
testing or checking new designs & ideas. Company introduces 25 full size shop windows which
helps designers in making modifications & innovations in the designs. Because, with these
windows designers get to know that how their designs are looking at front side of the stores.
Testing of designs are done by checking windows of each of store in different situations such as
day & night, black & white, sunshine & rain. Prototypes are used by company for the designers
to check that whether their designs are in accordance with the stores designs or not and
customers are get attracted by front window of each of its stores or not. This innovation strategy

helps Zara in producing designs in accordance to the customers needs and which leads to
increase in sales volume & revenue of the company(Goffin and Mitchell, 2016).
Feedback-
Collecting feedback from the customers and doing make improvement in designs
according to those feedback's is also an innovation which helps Zara in retaining its customers
and increasing its markets share. Currently, Zara is receiving online & direct feedback's with the
help of social media and by contacting face to face with the customers. Zara also receives
feedback's from its other staff representative by using wireless technologies such as emails,
mobile phones which helps in sharing information as to what type of products are demanded in
the particular store and with this company also get information about sale quantity of each of its
store.
Flat Structure-
Zara's organizational structure is flat which gives authority to its designers to make fast
decisions. With the help of this innovation Zara can winning over its competitors because
organisation structure of all then clothing brand is hierarchical which slow down the decision
making regarding designs and that leads to reduction in production capacity.
All these innovations make company successful & popular in the clothing industry.
Further, Zara has capability of entering into new markets because from past five years Zara's
revenue is increased by 50% and company invest more of its profits in establishing stores in posh
& valuable areas. Zara is also capable in retaining customers and introducing new products in the
market. Company has capability of making innovations in the global market(Moutinho and
Phillips, 2018).
THE INDUSTRY IN 2019
Zara make various innovation in 2019 and company also introduces various fashion
frenzy designs this year which attracts customers. In 2019 Zara introduced 6 unique designs
which attracts customers and those designs includes Belted Coats, Beige, Animal Prints, Mock-
Crock Shoes, Black Pointed Shoes and Nice Tops(satin blouses & floral print shirts). All these
designs are offered by Zara because the company thinks that this designs are continued to be in
trend for the coming 12 months. Company also offering all its new stock through online
platforms and in 2019 company offering free delivery on all of its products. In 2019 company is
also focusing more on producing toxic free and environmental friendly products to satisfy its

customers. In 2019, Zara ranked 46 in the Forbes list as Worlds most valuable brand and it also
received award of worlds the best valuable brand. Zara also received award for Ethical Retailer
for sustainable fashion purchase. Further, Zara ranked 30 on inter brand's list of the best global
brands. In 2019, Zara also focuses on eradicating child labour from all of its operational centers.
Zara also becomes worlds number one brand in clothing & fashion industry in 2019 in terms of
product quality, markets share, sales volume & revenue. Company won over its competitors such
as H&M, GAP & Burberry(Saraswat, 2018).
SWOT Analysis of Zara-
Strength Weakness
 All stores of Zara are located in the
posh area which attracts customers.
 Zara follows low pricing strategies
which is affordable for all customers.
 Company offers non toxic and
environmental friendly product in the
market which differentiate it from its
competitors.
 Strong control on supply chain
management of the company.
 Zara does not invest its revenues on
promoting its products & services.
 It is difficult for Zara to handle
unpredictable situations because it has
flat organisational structure.
 Zara offers its products for high income
individuals of the country.
 All the manufacturing of products of
Zara is done at one center only.
Opportunities Threats
 It is an opportunity for Zara to offer its
products through online websites.
 Market penetration is also an
opportunity for Zara through which
company has an opportunity to increase
market share & customer base in 2019.
 In 2019 company also has an
opportunity to collaborate with
international designers.
 Zara operates its business in many
countries across then globe which leads
to increase in global competition.
 Fashion industry is expanding day by
day so it is a threat for Zara of new
entrants(Mierzejewska, 2017.).

CONCLUSION
This report outlined purpose & structure of the report. Further, this report outlines
overview of Zara and retail industry. Furthermore, this report summarises operations of Zara &
its products. Moreover, this report concludes innovations made in the company is last years and
history of the company. After that, this report outlined existing innovations in the firm and the
report also summarise capabilities of Zara. At last, this report concluded operation &
achievement of the company in 2019 and this report also outlined SWOT Analysis of Zara.

REFERENCES
Books and Journals
Mierzejewska, J., 2017. Analysis and evaluation of marketing strategies for clothing companies
on the example of Zara and H&M (Doctoral dissertation, Katedra Procesów
Zarządzania).
Saraswat, S., 2018. Strategies v/s Consumer Perception of Brand Zara-India. IITM Journal of
Management and IT.9(2).pp.68-80.
Moutinho, L. and Phillips, P., 2018. Strategic analysis. In Contemporary Issues in Strategic
Management (pp. 46-79). Routledge.
Noe, R.A. and et.al., 2017. Human resource management: Gaining a competitive advantage.
New York, NY: McGraw-Hill Education.
Goffin, K. and Mitchell, R., 2016. Innovation management: effective strategy and
implementation. Macmillan International Higher Education.
Viardot, E. and Nylund, P.A., 2017. Conquering the Digital Customer: How Zara Is Confronting
the Digital Innovation Revolution. In Socio-Economic Perspectives on Consumer
Engagement and Buying Behavior (pp. 334-354). IGI Global.
Nenonen, S. and Storbacka, K., 2018. Smash: using market shaping to design new strategies for
innovation, value creation, and growth. Emerald Publishing Limited.
Online
Process Innovation – Zara, 2016. [Online]. Available through:
<https://www.innovationexcellence.com/blog/2013/11/18/process-innovation-zara/>