Strategic Management Assignment | Zara


Added on  2019-09-30

6 Pages1537 Words759 Views
IntroductionZara is a clothing retailer based in Spain providing the latest international fashion products. It is considered as a flagship store of Inditex Group. The retail management strategies of Inditex depend on the innovation and flexibility and has the sole purpose of mixing high quality design and creative fashion in an amalgamation with quick reaction for the market demand have given permission to Zara for quick international exposure and success (Isabelle, 2012). The retail mix in Zara can easily be analyzed using the retail mix framework. Zara has been using the strategy of cost leadership strategy which is one of the strategy outlined by Porter. 1.Analysis of elements of retail mix of Zara in UKZara has been providing high quality products at low prices along with providing quality customer experience in their stories. Zara has achieved this using innovative production and supply chain strategies. The retail mix of Zara has been provided below:The Merchandise Range and AssortmentZara provides reasonable high quality of the fashion products in the broad product lines. The merchandising product of Zara comprises of the ranges of men, women and children. Further, these ranges are subdivided into prices, product types, fashion-ability. Further, these are classified into the categories of lower garments, shoes, upper garments, cosmetics and compliments. These products are sold exclusively through their stores. But a wide range of products are offered by Zara. The Zara Basic Product line has been known to offer the cheap

fashion to the young girls and customers whereas the TRF product line is seen to cater the needs of teenagers. The Marketing CommunicationsIt is powered by the horizontal communication model and highlights the marketingcommunication of Zara. Zara ensures that the marketing operations are extremely streamlinedand effective and is able to identify customer preference in the market. It successfully developsthe new design based on the requirement and converts the concept into the product within 2weeks. Zara also promotes word-of-mouth promotion.The Design, Store Layout and Visual MerchandisingThe Zara stores are elegantly designed and feature product displays, ceiling decorations, white walls that are highly adorned with the ambient lighting and product photographs. A boutique layout design by Zara in their stores thereby providing a more personalized experience to their customers instead of the public shopping experience. The Facilitating Services and Customer ServicesZara has been employing well-trained and highly knowledgeable sales and staff who are given a special training for understanding the needs of the customers. The company instructs employees to handle the customer service with utmost utility. The company asks the employees to develop their personal relationship with the customers. The Store Formats and LocationsThe stores of Zara have been placed in the best locations ensuring that every store receive highest amount of attention from their customers. The store format used by Zara are categorized as their specialty stores focusing on selling of apparels.The Pricing Strategy and Tactics

Zara uses principles of cost leadership and produces the product at lower cost as compared totheir competitors and selling their products at the lower price. The company does not usespromotions and offers.2.Sustainability of competitive advantage of Zara’s retail mixThe company has gained the competitive advantage by offering good quality products atreasonable price along with offering the products that are frequently being refreshed. In order tofollow that Zara has been adopting the cost leadership strategy. This ensures that all thecustomers are coming to store frequently. Zara spends only 0.3 percent of their revenue onmarketing. Further the elegantly designed stores helps in attracting maximum customers. Furtherthe company does not even indulge itself in the large scale marketing therefore high quality andword-of-mouth is highly important to the organization’s success. This has helped in enhancingthe customer loyalty. The production processes are seen to take place in the Spain headquartertherefore providing the time required for the outsourcing manufacturing. The company breaksdown the tasks of their employees into various steps and levels and offers fresh products withhigh speed in product, short lead period, less advertising cost etc. This helps in indicating thesustainability of competitive advantage of Zara which is seen dependent on the company’sability for churning out new products at short lead times. Therefore, the customers are exposed to various products under specific product range. Further,Zara has also been offering specific product lines catering to the needs of their customers andtheir related segment. As per the retail mix of Zara where the store formats is the weakestelement of the Zara as Zara has been utilizing the various formats in the stores even when all

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