Strategic Management Report: Zara's Strategy Evaluation (BUS300)

This report provides a detailed analysis of Zara's strategic management, examining its functional, business, and corporate-level strategies. The analysis begins with an introduction that highlights Zara's position as a leading fashion retailer and its focus on customer satisfaction through fast fashion. The functional-level strategy explores the roles of various departments such as human resources, operations, and finance, and how they contribute to Zara's overall objectives. The business-level strategy focuses on Zara's competitive positioning, particularly its cost differentiation strategy, and how it manages production and operations to reduce costs and maximize customer value. Finally, the corporate-level strategy examines how Zara makes decisions affecting the entire organization, including its supply chain, technology integration, and expansion strategies. The report concludes by emphasizing the importance of enhancing corporate-level strategies to improve organizational effectiveness and capitalize on future opportunities.

Running Head: Strategic Management
Strategic managment
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Contents
Introduction................................................................................................................................1
Zara’s Functional-level Strategy................................................................................................1
Zara’s Business-level Strategy...................................................................................................2
Zara’s Corporate-level Strategy.................................................................................................3
Conclusion..................................................................................................................................4

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Introduction
The purpose of this paper is to enlighten the reader with the details about the analysis of
different strategies for the company Zara. The paper analyze the case study of Zara being
world’s largest fashion retailer analyze functional-level, business-level and corporate-level
strategies of the company. Zara is a multinational organization present in the fashion industry
that works in fast fashion segment with an objective to provide satisfaction to the customers.
Through this change of time, the company acknowledged several changes in the business that
helped Zara to become the organization it has become. The report analyze functional,
business and corporate level strategy in the perspective of the company Zara. The case study
highlights retail and operations strategies of the company Zara and ways in which the
company conducts business operations for growth and productivity. More details about the
paper are mentioned below:
Zara’s Functional-level Strategy
Functional level business refers to the goals and activities assigned to different departments
of the business that support the business level strategy and corporate level strategy of the
company. The functional level strategy builds a bridge between both the other strategies of
the company. This type of strategy analyze the results of the activities that the organization
needs to achieve on a regular basis. This type of involve the multi-level tasking for several
departments of Zara like human resource, finance operations etc. Analyzing the human
resource management department of the company, it should be noted that the business aims
to employ people who holds the entrepreneurial capacity so that they do not need to train the
employees with basics. This change in recruiting strategy made the organization to provide
better opportunities as well as responsibility to young people present with them. This aspect
also helped the organization to continue to grow with a faster speed. Considering the
operations strategy of Zara, it should be noted that rather than fast fashion, the company was
inspired with accurate fashion strategies in the business.
In response to which they provided differential products to the customers present in different
parts of the world. The company used negative operating working capital process so as to
collect cash faster from the market and reduce the trading cycle period as well. This activity
gave better accessibility to the organization for the target market as the company used to

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regular attain resources due to which they gained the opportunity of business expansion.
Considering the finance department of Zara, it should be noted that initial model of the
company only focused on investing into several opportunities present in different nations so
as to help the business create a brand image. Resulting in which, the company aligned its
activities with several other organizations in Japan and Italy so as to gain access to new
market. The expansion decision is usually headed by the CEO of the company Pablo Isla. The
CEO of the company believed that store is the heart of Zara, due to which advertising and
promotion strategies budget was minimized and the remaining amount was spent on them.
Word of mouth is the biggest advertising tool Zara. Lastly, analyzing the design and order
administration department of the company, the company used market specialists to analyze
the buyer’s behavior and offer them products accordingly. The environment of store
supported the buying decision of the customer that subsequently revealed the functional level
efficiency of the company Zara.
Zara’s Business-level Strategy
The business level strategy talks about the position of the company Zara in front of its
competitors. This type of strategy analyze the top competitors of the company and forces
affecting the position of the company. It should be noted that business level strategy is better
and more focused that corporate strategy of the company. The company make use of cost
differentiation business level strategy so as to attract the interest of right type of customers in
the business environment. This type of strategy helps the company to focus on the production
and operations strategies of the company and then aims to reduce the cost of the production.
This type of strategy is important for the company because it influence their business model
that is working in the company from past several years. The cost cutting platform of the
company helped them to invest more in the designing of the product and the store as well.
This pattern helped the company to decorate the store in better way and provide more offers
and benefits to the customers. The cost advantage model is the only business strategy that is
helping Zara to become a fast fashion multinational organization.
The company purchased raw material from the suppliers and then implemented complete
manufacturing process through the internal process itself. Resulting in which, the company
cut pieces from the production and operations process so as to deliver the desired products to
the customers at desired rates as well. The company outsource basic work to other smaller
companies so as to keep the employees more focused in their business activities and increase

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the level of production as well. The business level strategies refers to the strategies that
involves detailed actions to provide better values to the customers and help the organization
to attain sustainable competitive advantage by harassing the given opportunities and making
them use for the business. In the given case of the company Zara, it should be noted that the
company applied all possibilities in their internal environment so as to reach to the limit
where they provide maximum benefits to the customers. Resulting, in which, Zara became a
successful organization and became extremely famous in the international market. Based on
the business plan, the given cost leadership strategy is explicitly helping the organization
maintain its competitiveness in the worldwide environment.
Zara’s Corporate-level Strategy
Corporate level strategy refers to the organizational strategy that helps the business to make
decisions that affects the structure of the whole organization. The corporate level strategy is
mainly connect with finances of the organization along with human resource and
management of the business. This strategy helps the business to create smart goals for the
business and then implement adequate strategies for the monetary growth of the business.
The three level of corporate level strategy are growth, stability and retrenchment. This
strategy combined with the business level strategy helps the organization to compete in the
environment in a better way. Sustainable corporate level strategy of the company is its
extensively prepared supply chain of the organization serve the customers in better ways. The
business level strategy provide low cost opportunity to the customers while corporate level
strategy of Zara helps the organization to deliver the quality products to the customers in an
efficient manner. The corporate strategy of the company utilize technology in the supply
chain process so as to monitoring and tracking inventory.
Use of technology also helps in controlling the economic cost of production. Further, it
should be noted that given case study of Zara explains that the online platform of the business
has introduced better sales for the organization. Integration of technology in supply chain
management of the company helped the organization is expand the scope of business in the
worldwide environment and distribute the products within time as well. It is believed that the
company need to make changes in the design, production and order completion, therefore,
use of better technology in the other departments would enhance the corporate level strategies
of Zara and it would also make the organization attain better revenue. Improvement in the
supply chain activities of the company would increase the availability of Zara products in the

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market which would subsequently increase the demand as well. Thus, this unique selling
proposition would help the business to exploit the future present new products to the
customers in a better. This is just another way through which the company attains capability
of satisfying the customers in a better way.
Conclusion
Thus, in the limelight of above mentioned events, it should be noted that the paper highlight
details about the three types of strategies implemented in the given case study of Zara.
Functional-level, business-level and corporate-level strategies are the three types of strategies
explained in respect to the company Zara. Functional-level strategy builds a bridge between
both the other strategies while the business level strategy helps the company to offer value to
the customers. Lastly, the corporate level strategy helps the organization to attain profitability
by gaining competence as well. Zara is working appropriately in the market but they need to
enhance corporate level strategy so as to increase effectiveness of the organization.