Strategic Approach in Marketing

This report discusses the strategic approach in marketing, focusing on the case study of Zara. It explores the major strategies implemented by Zara, such as launching new designs, limited quantity yet premium presentation, co-creation with customers, and advanced IT infrastructure. The report also examines the structure, systems, leadership, and people culture of Zara, along with the evaluation of successful implementation.

Running head: STRATEGIC APPROACH IN MARKETING
Strategic Approach in Marketing
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1STRATEGIC APPROACH IN MARKETING
Executive summary
Considering the implementation of strategies as the hardest part to execute, this report
has uses the case study of Zara in terms of setting wining strategies and its implementation.
Further, companies like Zara cannot be considered as luxury apparel brand due to its
affordable price range. It is known to all that premium presentation of designs, limited
availability and unique design concept is what makes Zara to compete with existing luxury
brands in a global platform. This report has identified major strategies of Zara which have
made them to operate business in midst of all the difficulties and secure a safe space within
competitive fashion appeal industry. The ways they have implemented the strategies that will
be discussed too. Issues involved in implementation process have been treated at the end of
the report with the help of recommendations. These are oriented towards mitigating issues
and avoid further occurrence.

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Table of Contents
Introduction....................................................................................................................3
Overview of the company and industry.........................................................................3
Major strategies of Zara and its implementation............................................................4
Capabilities.................................................................................................................4
Structure.....................................................................................................................6
Systems......................................................................................................................7
Leadership..................................................................................................................8
People culture.............................................................................................................8
Change management..................................................................................................9
Evaluation of successful implementation.......................................................................9
Key implementation issues..........................................................................................10
Recommendation..........................................................................................................11
References....................................................................................................................14

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Introduction
Business experts tend to emphasize the fact that implementation in strategic
management is the hardest part to execute. This report will elaborate the strategic approach
which has been implemented by Zara under the fast fashion industry. Traditionally, Zara
cannot be considered as luxury apparel brand due to its affordable price range. However, their
premium presentation, limited availability and unique design concept is what makes Zara to
compete with existing luxury brands in a global platform. This report intends to identify
major strategies of Zara which have made them to overcome all the difficulties and secure a
position in competitive fashion appeal industry. Further, discussion will be on the ways they
have implemented the same. Implementation involves issues at any level no matter how
successful a brand is. At the end of the report, recommendations will be made for the brand to
mitigate issues and avoid further occurrence.
Overview of the company and industry
Following the trend of fast fashion and depending on the increased sale of 10%
globally, this retail company established no less than 2000 stores across the globe including
Australia. Zara was first introduced to Australian market in 2011 and in total they owned
more than 12 stores in Australia only by 2018. Followed by their success in retail stores, Zara
has opened their virtual shopping platform as well to attract the attention of youth more
precisely. Apart from targeting young men and women aged between 20 to 27, Zara has
children’s section also. Under the fast fashion industry, the brand has positioned it locally by
researching on different demographic preferences and establishing concept stores.
Simultaneously, digital strategies have been implemented as well yet later than its
competitors. Zara’s online platform connects all the international stores together presenting
global collection for customers around the world.

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Fast fashion industry is a sustainable approach in business. Fashion industry tends to
destroy excess and unsold materials due to take a control on ever increasing inventory costs.
Destroying them is not a professional strategy and does a lot of harm on company resources.
Moreover, it is wastage of natural resources and exploitation of workforce too. Therefore,
instead of making charity donations fashion industry has taken more advance strategy of lean
production and to keep limited collections (Martínez-Jurado & Moyano-Fuentes, 2014). The
company has been gaining more profit following the market demand and at the same time
logistics management becomes easier. Zara has been following the same path which has been
proved to be a major success.
Major strategies of Zara and its implementation
Capabilities Launches new designs within short span
All through the year, Zara does not depend on same line of clothes at stores. In order
to stick to the concept, ‘freshly baked fashion’, Zara ensures to keep it close to the customer
demand. Besides, the theme of collection revolves around spring/autumn and autumn/winter
collection which follows recent trends, items frequently worn by celebrities, or sometimes it
is the brand itself who influences the future fashion. Following the concept of offering latest
trends as per Gagliardi and Alhabib (2015), Zara allows consumers to shop recent trends at
the time they want to buy and efficient fashion predictions along with HR capability is what
makes them successful in this ground.
 Limited quantity yet premium presentation
As mentioned before, Zara prefers to keep the production lean for a particular design
and creates an artificial scarcity. It gives them a clear picture of customer preferences and
demand too. Luxury brands follow the same strategy, although targets people who focus on

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premium quality rather than price. Zara has been competing with luxury brands in terms of
quality maintaining the smart usage of resources, which makes them to offer products at
affordable range. As a result, the brand does not suffer from poor sales, increased inventory
costs and faltered logistics management. Even if at a point Zara has to clear the stocks, it is
on very small proportion of products and generally in this category too the company beats
their rivals. As described in Li and Zhang (2013), a correct balance between demand and
supply, smart usage of resources and logistics management can be considered as key to
sustaining competitive advantage.
 Co-creation with customers and large manufacturing capacity
Zara designs clothes based on customers’ choices. The brand success is majorly dependant on
‘just in time’ approach with the design adhering to the market demand. As described in Rapp
et al. (2013), employees of such industries are well trained to listen and keep a record of
consumers’ preferences along with incorporate production with retailing. Zara’s large
manufacturing units, although produce lean quantity strategically yet they have capacity to
deliver correct amount of products within short span of time. It not only indicates their HR
capabilities but also strategic operations of high-end manufacturing units and their
infrastructure.
 Advanced IT infrastructure
In-house production units, fast response to trends, power of centralised control unit
and cost effective promotional activities have been implemented with leverage of advanced
IT infrastructure. Starting from the computer guided fabric cutting and designing to product
distribution and determining pricing strategy; Zara has taken immense advantage of
information systems and technology for accomplishing business goals.

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IT infrastructure and usage of various software as tools to track customer information
and their bespoke choices. The designs and collections are inspired by celebrity fashions
along with customers’ preferences too. Retaining has become smooth as feedback related
amendments can be executed. Centralised control unit and in-house production, logistics
maintenance is not possible without usage of smart technological instruments. Track on small
batches of collections and aligning those with different demographical choices have been
monitored with technological aids. The wide distribution process has been fulfilled within 15
days. Cost of IT implementation is higher as it needs to establish live database under limited
time. Zara has strategy of in house prototyping which is essential regarding design
modification. Pricing strategy and prompt response depend on virtual research too (Pinson &
Madsen, (2014).
Structure Labour operations are outsourced from local contractors only
Zara not only designs clothes based on different demographic choices, but also
explore local talents in order to maintain cost effective business operations. It makes them
understand the local fashion sense better. Additionally, unlike other companies they do not
outsource labours from Asia rather depends on own manufacturing units situated in Turkey,
Spain, and Portugal mostly which makes them vertically integrated to business.
 Flexible supply chain
Zara’s highly efficient supply chain is capable of delivering new designs twice within
a week and if any emergency demand arises it take no more than 15 days to offer the
customers with new collections. Distribution units in Spain are centrally supervised. The
supply chain strategy has been implemented following some operations guidelines. Such as,
1) trend information are generated regularly and designers keep a track of those in order to

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create new fashion, 2) designers consistently circulates updates regarding product designs and
clear manufacturing instructions boost quick and accurate production, 3) managing
distribution according to the demand is another strategy which has been implemented by as
minimum human interaction as possible to make the structure simple. It helps to
communicate without much confusion through virtual mode. Additionally, supply
calculations are done digitally as well.
Another aspect is designers’ capability to modify existing unsold designs within a
short period and sell calling it ‘freshly baked’. It confirms their efficiency in terms of speed
as withdrawing a design and launching it again requires highly professional skills. The
strategy of supply chain is to offer customers new and fresh fashion on every visit. Therefore,
the structure of supply chain has been made highly flexible and ready to serve according to
consumers ‘preferences. Following this strategy, Zara has created lean organisational
structure which ensures high productivity, performance and shorter shelf life of most of the
product line to meet customer’s need.
Systems Sustainable approach
It is needless to say that with the increasing environmental issues, the awareness
among citizen are gradually increasing and they are likely to choose organisations who
operate business maintaining their responsibility towards society and environment. It helps
them to attract global customer base more than its competitor. Following the study of
Nicholas (2015), business is driven by global sustainable goals to gain competitive
advantage. Advanced mechanism has been used to make smart use of natural resources to
produce fabric and dying them. They sticks to lean production and opens for exchanging old
clothes at least twice a year.

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Leadership
The most exceptional nature of Zara’s management is they can adopt and change
really fast learning the necessary details. According to Aarons et al. (2014), it is important in
terms of growth as they continuously look for new opportunities and innovate strategies to
exploit those. Challenges are the most important source of gathering knowledge and
exploring different opportunities. Moreover, they can initiate conversation important to gain
customers’ perception. Without correct implementation of effective leadership methods Zara
has achieved such balance between logistics management, manufactured products, suppliers’
and distributers’ chain.
People culture Work culture
Being responsible towards society and people, they like to ensure if employees are
sharing same vision as the employers. Zara through training and development session not
only trying to combat future operation challenges, it contributes towards individual
professional development too. Moreover, Zara has recognised talent among people with
disabilities and offered job opportunity too. Above all, employees at Zara enjoy liberty to
work at a friendly work environment to lower the lead times as approval from the higher
authority takes time. Most of them are young and target based incentive motivates them
highly.
In addition to that, Zara has different creative team of efficient designers and
technicians, analysts and customer management team implements such strategies to retain
both the customers and some of the profitable trends. Following these policies, Zara tries to
remain customer centric in order to be successful.
 Communication strategy

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In order to deal with the customers, as mentioned before Zara instead of launching
their taste of fashion focuses on what customers want. Therefore, it can be said instead of
pushing a style to the market, Zara pulls customers’ demand inside the process and try to
align designs with that as compared to their competitors Zara does not follow traditional
advertisement rather follow location strategy of establishing their store in the most busiest
part of the city. As argued by Wolny and Mueller (2013), by serving quality and just in time
approach, Zara gets their exposure by word of mouth. Benefit comes from people’s
experience with the brand which is the most effective form of marketing.
Change management
As market competition is increasing Zara has been changing the organisational
structure gradually, to fight with competitors like GAP and H&M. The change strategy
concentrates to add value to the offerings, increase market share and reorganising the value
chain for an integrated brand on international platform. It has been observed that Zara’s
online shopping site has been opened for Australian customers for less than one year. The
competitors have such facilities already. Although, Zara has been offering highly fashionable
quality clothes yet the perceived value has been decreasing due to its affordable price range.
This fact was making the ground of competition tougher with luxury brands. To combat that
has been operation online shopping sites and changes pricing strategies, launches premium
and affordable ranges separately. Communication and sharing knowledge has become easier
by simplifying hierarchical structure.
Evaluation of successful implementation
The strategy implementation can be considered as successful as before the expansion
in Australian ground the sale grew up by 16%. The business operation has started at the
initial stage of 2011in Australia and within 2017 Zara has established more than 17 stores in

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busiest cities of the country which indicates their increased sales growth and market share.
Employee count is no less than 2000 now and staff members are increasing at a rapid rate.
Employees are driven by high incentives. Yet, in recent times, due to a competition received
from H&M net profit and sales rate has fallen by 2%. Therefore, it can be stated that
although, right implementation of strategies has brought them impressive exposure yet there
are areas of improvement to make the existing strategies successful. Moreover, financial
support from the parent company in Spain must be provided for future improvement.
Key implementation issues Online shopping behaviour and use of smart devices
While implementing the strategies Zara has been facing issues as they are not
receiving the desired response as it used to be at initial stage. Zara is believer of delivering
pleasant brand experience and does not really fond of extravagant advertising. Even, the
company recognised the fond of digitalized shopping a little late. As stated in Shen et al.
(2014), due to advantage of having smartphone people are saving their time through virtual
mode of shopping. Competitors are enjoying the competitive advantage of having mobile
commence due to technological advancement, while Zara is at their launching stage. Their
store strategies are genius yet for not recognising the shopping behaviour of target market
Zara’s sale is decreasing.
 Static marketing and communication strategy
As discussed before, Zara does not implement contemporary marketing strategies
rather chooses the most posh and busiest location of all. They help customers to have best
brand experience and expect them to convey it to others. Additionally, their website contains
adequate information of products and collection. However, the issue is they have not realised
the importance of marinating strong brand communication to create new customer base. The

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virtual platforms are suffering from low maintenance are supervision. Lack of socialization
are major block in front of implementing strategies of communication and it needs to be
addressed to avoid gradual decay. While implementing old marketing strategies, as stated in
Mulhern (2013), fast fashion companies like Zara could have been considered the fact that
targeted customer base has become more dependent on digital modes communication.
 Pricing strategy has proven as weaker advantage
Zara following the strategies of prompt responding to market demand and following a
lean production method trying to make smart uses of resources. It enables them to keep the
prices affordable for consumers. This implemented strategy has turned out to be gradually
ineffective as there are other fashion names like H&M, GAP, Topshop and other online
fashion brands flourished in recent years are following this fast fashion strategies. Needless to
say, Zara has been maintaining the tradition of providing highest quality. Therefore, to ensure
flawless implementation of strategies Zara has been facing restriction form the current
customer behaviour which must be addressed soon.
Recommendation
Based on review of the implementation issues, recommendation will be made.
 It is true that Zara is late at recognising the fact of mobile commence and launching e-
commerce website. The shopping behaviour of the consumers and the most rapid
transformation has happened among the youth. The trend of purchasing new styles at
affordable range is among the young generation the most. However, to address such
behaviour detail market research can be done. It is never too late to mitigate issues
with correct strategic practice. Apart from physical stores, Zara, must provide
effortless and time saving shopping experience to customers just to make the

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strategies more effective with the contemporary shopping behaviour of targeted
customer base.
 Traditional advertisement is not something Zara believes truly. Therefore, as
discussed in Tsai & Men (2013), social media pages are required to be managed
professionally. However, their pages over social media platforms have failed to create
the buzz due to lack of efficient social media manager. Recruitment must be done in a
role of virtual communication manager who can manage post and apart from mere
advertising make the platforms a medium of communication between customers and
managers. This will help customers to post their views effortlessly with one click
rather than walking into the store directly. People will enjoy hustle free method and
Zara will gain competitive advantage out of this.
 As price is no longer being considered as competitive factor, the company must
strengthen their brand communication more to let the customers know what makes
them to offer such good quality product in affordable range. The sustainable approach
of resource management has to be highlighted more to made the society aware of the
sustainable practice. The perceived value of the product must not be decreased in
front of the target market. In case Zara wants to proceed with the current pricing
strategy then online platform will help the company best as this approach suits the
young generation the most. Without validating the competitors in terms of pricing
strategy, if Zara continues to focus on quality and their old strategies success will
occur within a short period of to months.
 Therefore, it can be stated that Zara needs to invest on establishing their brand
position and try innovative ways to communicate it among their targeted
demographics.

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 Moreover, Impact of social media marketing is no longer a secret. They have to make
best use of social media by using that as tool of both the promotional activities and
implement strategies of marketing communication.
 It needs to remember that brand needs to take the leadership again in market and to do
that Zara has a requirement to impress the new customer base.
Conclusion
To conclude, it can be stated that Zara while balancing luxury approach with retailing
strategies is gradually pushing themselves in back bench by not addressing the current
shopping behaviour of the consumers. With the help of strong leadership background,
efficient human resource, sustainable approach in balancing logistics with manufacturing
process, lean production and customer oriented fashion designs and systems; Zara will be
able to conquer the market only if market communication and contemporary approaches are
taken. The concept of fast fashion industry is not confined under the fast modification of
styles, limited stock and unlimited designs; consumers are now highly conscious about saving
time and enjoy mobile commence. Therefore, apart from addressing the choices of the
customers, their buying pattern and behaviour must be monitored for accomplish the
objectives of market growth and profitability.

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References
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