Growth Opportunities for Zara in Online Retail Sales

Running Head: ZARA
ZARA
Report
MAY 4, 2019
ZARA

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Table of Contents
Introduction......................................................................................................................................2
Key Growth opportunities of Zara...................................................................................................2
Barriers in Future Growth................................................................................................................2
Resource that contributes in Firm’s Growth....................................................................................3
Possible solution of the problems....................................................................................................4
Best selective solution (Focus on Online Market)...........................................................................5
Tactics to implement the solution....................................................................................................5
Recommendations............................................................................................................................5
Conclusion.......................................................................................................................................6
References........................................................................................................................................7

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Introduction
Zara is a leading Spanish company in lifestyle and retail sector, which was founded in 1975 by
Amancio Ortega Gaona and Rosalia Mera. Zara is available in more than 180 countries and
having more than 2000 stores all over the world. Zara is famous for its fashionable clothes and
beauty products. Zara is known for its marketing strategies and tactics (Anwar, Tariq 2017, 26-
35). Zara is a flagship brand of the Inditex Group. Inditex has more than 8 brands and
subsidiaries brands. This report is based on the growth opportunities for Zara in world market.
This report explains the possible growth strategies for Zara, which can help to increase its market
share in lifestyle and retail sector. The present report focuses on online sales opportunities for
Zara. The report also provides strategies and tactics that how Zara can be successful in online
retail sales and increase its market share in all over the world.
Key Growth opportunities of Zara
Zara is one of the famous brand in costume (fancy and modern clothes) and beauty product
markets. Zara is known for its marketing strategies. There are some key growth opportunities for
Zara in beauty markets are as follow:
Online E-commerce: Customer are now searching everything on internet and mobile phone.
The buying trend is shifting every day from offline market and physical stores to online market.
Zara can definitely utilize this opportunity of online buying trend. Zara can make its product
available for online customers in its own online stores. Although, some online channels such as
amazon, Flipkart, and Myntra are selling its product online but if Zara is focusing on this
concept, it will hike its sales (Alberto 2018, 48-56). If Zara opens its online stores in various
countries, it acquire large number of customers of other competitors as well, who have not
reached Zara stores ever.
Backing some flagship design: Every big brand has an advantage of flagship brands design in
their stores. But Zara is somewhere lacking in providing top or star products design. Zara should
focus on a particular design that should be sold on exclusively on Zara stores (Leire 2016, 18-
22).

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Growing market potential: Beauty products and costume market has huge growing potential.
The demand of these products is increasing every day with increasing population. Zara can focus
on future market and focus on some segmented market.
Barriers in Future Growth
There are some barriers in attaining these market opportunities:
Large number of online Retailers: There are large number of online retailers already exist in
beauty product markets. Therefore, Zara may face strong competition in the market. Apart from
this, the digitalization age provides opportunities to customers to make their own choice while
choosing their products. A small difference in price may leads to decrease in numbers of online
customers (Byoungho, Moudi, and Naeun 2018, 70-81).
High Product Cost: Zara is already charging premium cost for its product and only target those
customers who are ready to spend huge amount on beauty products. Thus, there is no meaning of
introducing flagship brands, if price is not controlled by the Zara.
High-Inflation Rate: The high inflation rate in the world may affect the demand of Zara
products. Zara already charging premium price for its products and target upper middle class and
higher income class for its product. Therefore, high rate of inflation may affect its growth to
expand its market worldwide. The potential market will increase in size but inflation affect the
demand of the Zara products (Ziying 2015, 217).
Resource that contributes in Firm’s Growth
Zara is one of the leading brand and it has plenty of resources to attain the growth opportunities
in beauty product markets.
Financial Resource: Zara have strong financial backup from its parent group organization.
Although, the profitability of Zara is increasing day by day and it spends huge amount and
research and development of its products as well. Although, to introduce online retail stores of its
own required less financial capital, while utilizing market growth needs huge capita to fulfil the
demands of customers (Shardul and Fine 2015, 15-18).