Strategic Management of ZARA

Running Head: ZARA 0
STRATEGIC MANAGEMENT

ZARA 1
Executive Summary
As an international retail organisation, Zara business strategy can be analyzed from
both internal and external perspectives in relation with extensive managerial framework.
However, due to changing business environment and dynamic variables in the market, it is
necessary to identify whether Zara will able to gain viable competitive advantage or not.
Considering company mission statement, it can be said that it is not only achievable
but also actually achieved. The company also gained competitive advantage in relation to the
VRIO framework and with market-oriented strategy. With regards to its financial position, it
can be called a promising future for the company.
As per the external analysis, there are high barriers to the industry in relation with
huge cost in infrastructure and marketing budget. However, there is an availability of number
of substitutes that can counterfeit Zara products. The competition in apparel industry is also
high with leading competitors such as H&M, URBN and Uniqlo.
At present, Zara uses differentiation strategy for the larger market in align with
integrated supply and value chain. However, to ensure its sustainability in emerging and
Asian markets, the company is required to decentralize its supply chain to decrease cost and
deliver the product to the customer in a faster way.

ZARA 2
Table of Contents
Introduction................................................................................................................................3
Vision and Mission Analysis.....................................................................................................4
Internal Analysis........................................................................................................................6
External Analysis.....................................................................................................................11
Development of organisational strategy...................................................................................13
Recommendations....................................................................................................................15
References................................................................................................................................16

ZARA 3
Introduction
Strategic management is a change process that takes time to develop and synchronize
with the business process. It is divided into several perspectives and focuses on how
strategies should be put into practice. Strategies management also includes those strategies
that have been sparked by various actions and ideas from both organization upper
management and employees (Trkman, 2010). Considering an organisation, it outlines their
plans, market position and ways to achieve those plans. In this report, the strategic analysis is
being made of one of the largest fashion retailer ZARA, a Spanish organisation. It outlines
various concepts, tools and techniques of the ZARA strategy in relation to organisation
sustainability.
Amancio Ortega Gaona and Rosalia Mera originated ZARA in 1975 and at present, it
is one of the major selling brands with having more than 2250 stores in 96 countries. In 2018,
the company earned a revenue of $18.4 billion with a vision to satisfy the desires of its
customers (statista.com, 2019). With constant innovation and business improvement, the
company is ready to offer new designs made from quality materials and are reasonable. In
addition, with its business model, the company purpose is to fulfil their sustainability role in
extent with the society and same of that environment in which they interact.
In 2010, Zara initiated to move online with its online boutique with the websites in the
UK, Spain, Portugal, Italy, Germany and France. Zara targets men, women and kids clothing
and their products are supplied as per the consumer trend. Nearly, 450 million items are
produced by Zara every year and in most of the time, its clothing is delivered within 48 hours
(brandriddle.com, 2019).