Marketing Essentials Assignment | Zara
Added on 2021-01-01
8 Pages1987 Words78 Views
Porter's five forcePorter's five forces model analyzes and identify five competitive forces that shapeevery organization and help to determine an organization's strengths andweaknesses.Rivalry: In fashion clothing market Zara become a leading clothing brand and H&M is one of its biggest competitors. It makes pressure on the company in which they make some changes to get a rise in the marketplace and get a high position better than others. High rank of rivalry in business world make impact on company productivity and profitability.The threat of new entrance: High rank of New entrance in the fashion worldis one the biggest threat for Zara which impacts on its productivity andprofitability. At this time they provide reasonable prices of products with highquality that help to retain its customers with them for a longer time of period.Bargaining power of suppliers: The company builds an effective supplychain with multiple suppliers that help to tackle the bargaining power ofsuppliers. Power of suppliers has been ranked at medium level. Bargaining power of buyers: Buyers want to buy the best offers which areavailable by paying minimum prices as possible. It put pressure on Zara profitmargin in the long term, thus to solve this issue company speedily innovatingnew products. Consumers often seek offerings and discounts on establishedgoods so organization keep on bringing with new products then it can controlthe bargaining power of buyers. 1 to 5 number of buyers get high rank ofbargaining power. The threat of substitute: Threats of substitute will be medium.When newgoods meet similarly consumer needs in a different term, industry profitsuffers. The threat of substitute service or goods is high if it offers a valueproposition that is different from the current offering of Zara. By understandingthe core demand of consumer more than what they buy company can tacklethe threat of substitute. Threats of substitute will be medium, which is easy toreplaced any products of Zara, when goods does not meet with customersdemands and requirements.
. SWOTIt is the best tool or framework that help the company to identify its strength,weaknesses, opportunities, and threat. It analyses assess external and internalfactors as well as future and current potentialStrength Zara offers best prices products to customers at a reasonable price. They have more than 2000 stores all over the world where they give a range of clothes.OpportunitiesBy exploring its business at the global level company can grab the position of its business at a highlevel.They offer customers clothes through online marketing facility thatis gaining importance in the marketplace.WeaknessesLimited advertising and marketing as compared to other brands areone of the weak points about Zara.High competition environment for the company means a lack of market share and high brand switching. Threats The threat of newentrants.The threat of substitute.Sudden change in government trade policies after Brexit.Cyclical theories -The wheel of retailingThe wheel of retailing is a theory to state the institutional alteration that takes placewhen large business and innovators enter the retail area. This theory is based onfour phases-Phase 1- In this phase retailers enter in market as low status, low margin andlow price for example Zara. All these things gradually acquire moreelaborately facilities and premises that help the organization to moveupmarket. Zara enters in fashion market as low margin of profit, introduce lowprice products and low financial budgets etc.
Illustration 1: The Wheels of Retailing- 4 Phases(Source: Wheel Of Retailing, 2017)
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