Strategic Marketing

Running Head: STRATEGIC MARKETING
Strategic marketing
Student’s Name
University Name
Author’s Note

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Table of Contents
Task 1...............................................................................................................................................3
1. Introduction..............................................................................................................................3
1.1 Company Background........................................................................................................3
2. Discussion................................................................................................................................4
2.1 Situation Analysis...............................................................................................................4
Task 2.............................................................................................................................................10
2.1 Marketing situation Analysis of Zara...............................................................................10
Reference List................................................................................................................................19

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Task 1
1. Introduction
In the first task of this assignment, a situational analysis of Zara has been conducted. In
this section, both the internal as well as external markets situations have been analyzed. A
SWOT analysis has been conducted for internal situational analysis of the company. On the
contrary, the RESTEL analysis looks up at analyzing the external market situations. By means of
implementing these models, the various aspects of the marketing strategies have been evaluated.
The ways in which the external and internal factors affect the marketing strategies and marketing
situation for Zara, have been evaluated in this task. In the task 2, the marketing situation has been
analyzed critically, in order to highlight the strategic marketing options open to the company. In
order to identify that, the company’s marketing mix has been created. For the purpose of
development of future strategies of the company, a BCG matrix has also been developed for
Zara. This model analyses the sectors of future growth by highlight what the major business
sectors that can maximize the profitability of the company. Lastly, strategic recommendations
have also been provided here, in order to identify the future development options open to the
company. The steps to monitor and control business growth based on these strategies have also
been reflected
1.1 Company Background
Zara is one of the major clothing retailers which were founded in the year 1963 by Amancio
Ortega in Spain. The parental company of Zara, INDITEX is owned 60 percent by Ortega family
(Filieri 2015). The organization has more than 2000 branches all over the world. The business of
Zara also encompasses distribution of apparels. There are multifarious choices offered by Zara to

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its customers, including men, women and children’s apparels. However, lately the company has
also launched separate lines of cosmetics, perfumes as well as household products.
Since the initial phase of their establishment, the main mission that has been followed by
the organization is to make the luxury items of lifestyle available for everyone (García-Álvarez
2015). This is how they evolved the fashion ideology of their customers by bringing about a
democratization of the luxury items that are mostly demanded by the customers of Zara.
1.1.1 Mission and Vision
The vision of the organization is to occupy the number one position in fashion retailing.
As stated in the mission statement of Zara, the company wants all major target markets of
clothing retail to be covered by them. They want their customers to experience new weekly
designs.
2. Discussion
2.1 Situation Analysis
2.1.1 Internal Analysis
2.1.1.1 Strengths
Zara has influential presence in the overseas domains of America, Europe, Africa as well
as Europe. The company takes up only two weeks for designing new products and also bringing
them in their stores. As highlighted by de Jorge Moreno and Carrasco (2016), they also keep the
customers feedback and the latest consumption demands while designing their product lines. On

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the contrary, their competitors needs at least 6 to 8 weeks for bringing about new product lines in
to the market.
Zara gains competitive advantage from the fact that they did not transfer the whole of
their production to the low cost countries. Rather they gave kept significant part of their
production in the countries like Spain and Portugal where the wage limit is lower in comparison
to the Western part of Europe. By means of this strategy they are able to cut the shipping costs
and the new product lines are also introduced quickly in the market in comparison to their
competitors (Vulto and Simoens 2014). Zara maintains a group of product designers rather than
individual designers who are responsible for multiple product line in companies like GAP, H&M
as well as others.
The stores of Zara are owned by the company and they are considered as a group of vertically
integrated retailers in the whole retail world. This implies that the organization is itself
responsible for designing, producing as well as distributing their products by themselves. Zara
establishes direct communication with customers since they introduce the new product lines
through fashion show before bringing them down to the market, like their competitors (Özlen
and Handukic 2013). This saves the advertising costs of the company as well as gives them
compete edge over the other clothing retailers who consider market exposure as the only means
of promoting their products.
Another major factor of strength for the organization is that they are producing about
11000 new product lines in the market compared to their primary competitors who come up with
not more than 2000 to 4000 new product designs in the market every year.

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As identified by Kim et al. (2013), the company’s inventory maintenance cost is also low
as they are able to clear the product lines by accomplishing the sales targets within a span of 10
days. In case if they are not cleared within a span of 2 weeks, they are replaced from the
inventory.
The organization also has a core concept in information technology so that they are able
to support their international logistics system. Besides, in the online sales channel of the store,
they are also implementing a return and exchange policy that is equivalent to their physical sales
counter. This strategy has helped the company to ensure significant market presence in the new
international markets like that in Australia and the Middle East. As identified by TUŢĂ et al.
(2014), many of the customers in the Middle East and European countries can purchase the Zara
items through IPod, IPhone mobile apps and other similar channels. Thus it can be inferred that
there is higher flexibility in stock management and production sales. The store managers of Zara
reports the sales progress every day to their designers in La Coruna City. This ensures that there
is a splendid coordination between the different departments which helps them to meet the needs
of the customers.
The business of the parental group of Zara, Inditex has enhanced and currently they are
occupying about 5000 stores in about 77 countries in the world. The net income of the company
has increased by 56% in the last five years from 2013 to 2018. The operating profit of the
company is 15% more than H&M as well as GAP and that is the reason why they are successful
in the market in spite of a low working capital (Inditex.com 2019).
2.1.1.2 Weaknesses