Analysis of Competitive Environment of Zara with Porter's 5 Force Analysis

Report
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Table of Contents
INTRODUCTION...........................................................................................................................3
Analysis of competitive environment of Zara with Porter's 5 force analysis..............................4
Porter's value chain of Zara.........................................................................................................6
CONCLUSION................................................................................................................................9
REFLECTION ................................................................................................................................9
REFERENCES..............................................................................................................................11
APPENDIX....................................................................................................................................12
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INTRODUCTION
Zara is one of leading successful fashion retail brand, with its dramatically lunched new
product and services in global marketplace. The retailer has founded in 1975 in Spain, it always
inspires or motivate to create their strong business position in global world. it is responsible for
passion in fashion among potential customer, spread in different culture, adults and every age
groups. The fashion retailer always focused on the business growth and development so that they
have contributed to success but its strength which plays important role in global fashion
marketplace (Varelas and Georgopoulos, 2017). Zara retailer is mainly obsessed with its
potential consumer because they can define company, brand value, image, culture in right
manner. Zara offer the various type of clothing for children’s, men’s and women. There is also
sub-brand Zara TRF that provide many options. Zara was founded by Amancio and Rosalia mera
in 1975. The organization is also integrated with retailer and controlling overall supply chain,
manufacturing. Currently, it has 1,751 stores across worldwide (Singh, Srivastava and Awasthi,
2018). They become start their first stored with features low price so that many customers
attracted towards product and services (Duarte Amado, 2016). it has planned to establish
business in next 8 years, applied a strategic approach towards fashion and business models.
Therefore, it gradually generates or target Spanish clients. Afterwards, it has been successfully
leading business and opening many physical stores across countries.
It is incorporated firm that holding entire business which laid the foundation from other
distributors. These are capable for shifting towards latest market trends in quickly. In this way, it
has begun to create new design, distribution process and manufacturing that could minimize lead
time and also react towards new trends. The demand of consumer has rapidly changed because of
adopting new style, trends which become major opportunities for ZARA to quick adopt new
things and expanding business across the world. Zara has drive by investing large amount of
money in information technology and utilise group of people. For instances, it adopts the
individual designer for the critical elements.
Zara offers various type of products and services as per demand of consumer, which
reflect unique need of client on the basis of culture, physical, climate. Especially, organization
produce clothing item in wide range (Duarte Amado, 2016). The product has frequently
developed interaction between Zara local store manager and their creative team. It is likely to
supply the best fashion merchandise at right time in global world. it has set up modern
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technology which drive system and enable to increase production value in global marketplace.
Zara use the concept of make and buy approach, it helps for producing more fashionable and risk
item for purpose of testing. It can be outsourcing production with more standard with more
predictable manner. In other countries such as Asia, Morocoo and Turkey to minimize
production cost or price (Singh, Srivastava and Awasthi, 2018). Zara employees are trained
listen, watch and attentive to even small signals from their potential consumer. It is good sign for
adopting new trends which reshape brand image, reputation. Zara knows that its response in
quickly manner and likely for successfully supply right fashion.
Analysis of competitive environment of Zara with Porter's 5 force analysis
Zara is one of the most popular apparel retailers which is mainly specialized in fashion. It
provides qualitative clothing, shoe, accessories, beauty and perfumes and other. One of the main
reasons of its effectiveness and popularity is its qualitative products. But in the context of apparel
and fashion industry, it can be said that competition in increasing day by day. There are several
other popular fashion brands in the UK such as Arcadia Nike, Adidas, Primark who are
increasing competition for Zara. All these fashion brand have abilities to attract customers by
providing qualitative products to them. It is limiting sales of Zara. One of the main aim of Zara is
to take competitive advantages and being the market leader in fashion industry. For
accomplishing this goal, it is essential for it to analyse all those factors which are increasing
competition. For that it also requires to select the best model which can help it out in analysing
and understanding all those factors. With the help of Porter's 5 forces analysis model, it can
identify the main 5 factors which are increasing intensity of the competition (Duarte Amado,
2016). All 5 forces which can help this company in analysing the intensity of competition are:
Threats of new entry: In the context of new entry, it can be said that for new
businessmen they will require high investment in order to compete with high competitors. They
also will require getting skilled workforce. But certain people who have thought to enter this
industry who has potential growth. But one of the main factor which need to be maintained by
new entrants is creativity and uniqueness in products for which Zara is known for. They will also
find difficulties in getting skilled workforce as compare to Zara who can help them out in
producing unique clothing. They will also require paying high to workers. Only few people and
businessmen can enter in this industry because there is a huge competition already. By critical
analysis as some factors can be in the favour of nee entrants which can make easy entry but some
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