Zara Case Study: Analyzing Zara's International Business Operations

This case study examines Zara's international business operations, with a specific focus on its activities in Saudi Arabia. It provides an overview of Zara's value chain, highlighting its rapid product development and design processes. The study then delves into the impact of culture on Zara's international business, particularly within the context of Saudi Arabia's cultural norms and religious considerations. It explores how these cultural factors influence Zara's product offerings, marketing strategies, and overall business approach. The analysis covers challenges related to language differences and workforce management, emphasizing the need for adaptation in leadership and management styles. The case study concludes by underscoring the importance of considering cultural aspects in international business to achieve success. The paper references various academic sources to support its findings and analysis.

ZARA CASE STUDY
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TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
OVERVIEW OF ZARA AND ITS VALUE CHAIN ....................................................................3
IMPACT OF CULTURE ON INTERNATIONAL BUSINESS ....................................................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6
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INTRODUCTION
International business is considered as a situation where organisations have exchange of
goods and services among individuals and businesses in diverse nations. In other aspect, it is
combination of commercial transactions that are accomplished between two or more countries
beyond their political boundaries (Lopez, 2009). Current study will focus towards work activities
of ZARA while operating in Saudi Arabia. It will also focus on impact of culture on the business.
OVERVIEW OF ZARA AND ITS VALUE CHAIN
As per the detailed study, Zara is one of leading and successful fashion retail firm that
operates its business in around 59 nations. In addition to this, it is Spanish clothing and
accessories retail business which was founded in year 1975. It has been identified that the Zara
has claimed that they only needs two weeks to develop new product and launch it in the market.
Company is already offering 10,000 designs in the market that creates better opportunities for the
firm (Lippman, 2008). Organisation is more focused to zero advertising policy because it reduces
the cost of operation and generate more profit. These kinds of financial developments are more
beneficial for opening new stores in better way.
In regard to have proper understanding of the Zara functioning, it is significant to focus
on Zara business model. It has been identified that the company business model is developed on
the basis of three basic concepts. Classification of factors can be as concept, capabilities and
value drivers. In this respect, organisation is continuously focusing on activities that can
maintain standards in context to design. Zara is having efforts to maintain design, production and
distribution process. It allows business to meet customer needs and expectations in appropriate
manner and lead business to impressive level of success (Bozionelos, 2009). Company is also
having effective control on its value chain management system because it allows to have
effective acquisition of resources. Organisation has also developed number of conceptual
strategies that helps in maintaining the tight control over its production process. It is also
beneficial for ensuring about the design and manufacturing. It has been witnessed that the 80
percent of its production is explored in Europe and 50 percent of it is in Spain. They have
strategic agreements with local manufacturers that ensure timely delivery and service (Alfuraih,
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2008). Through these strategic partnerships and the benefits brought by this proximity of
manufacturing and operational processes.
Other than this, the Zara is more focused towards improvement in its value chain
management. It provides number of benefits to the firm as well as stakeholders. In addition to
this, the inbound logistics of the group is in control and helps in operating activities in different
geographical areas. In this regard the management also ensure about color and material of fabric
so that quality of products can be maintained in effective manner (Ricks, 2009). It has also been
identified that the designers of Zara are having continuous collective working so that designer
products can be produced in effective manner to meet goals and objectives. Organization also
performs number of social responsibility activities so that objectives can be attained in
appropriate manner.
IMPACT OF CULTURE ON INTERNATIONAL BUSINESS
It has been noticed that while operating activities in international market, it is significant
for business organisations to ensure about cultural aspects. If company is not having proper
consideration of the cultural aspects then business may face issues. In regard to the Saudi Arabia
culture, it can be said that it is a Muslim's nation so its cultural aspects cover religious factor.
Zara is more into women designer cloths but as per the consideration of the Saudi Arabia culture
women's are not allowed to wear skinny and designer cloths. It has impacted the business of Zara
in diverse manner and created an issue for the organisation (Eid, 2011). These kinds of
differences in the cultural aspects has forced management to bring designs and cloths according
to the cultural and religious needs. In this context, culture of members is of key importance and
therefore appropriate strategies must be developed by the managers so that it doesn’t harm the
interest of any members.
Moreover, the language difference is also one of key issue that impacts the business of
Zara. Company was more focused towards western culture and communication ways. It has
forced management to have changes in operational activities so that they can easily communicate
with the customers. Other than this, the organisation has also faced issues in operational
activities while operating business in Saudi Arabia (Jenkins, 2013). It is because the work culture
is also different as compared to the parent nation. It has forced management to bring changes in
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management style and leadership style according to workforce preferences in Saudi Arabia. In
this context, culture generally involves attitudes, beliefs and values of the individuals. It is
necessary for the management of Zara to ensure that the cultural aspects are properly concerned
so that goals and objectives can be accomplished in desired form (AlGhamdi, 2012). Moreover,
the leadership style of company also need to be change according to cultural aspects so that work
activities can be managed in appropriate manner. This is essential to focus on the same because
any differences in the mentioned area can lead to differences in the team from which unity gets
distracted and hence project may result in failure. Apart from this, there lie differences in the
thinking, skills and competencies of each team member and hence it needs to focus while
managing them.
CONCLUSION
As per the above study, it can be concluded that while operating business in international
market, it is significant for firm to ensure about diverse cultural aspects because it may influence
business in negative manner. Value chain and production process of Zara is properly maintained
that provides effective coordination of activities and lead business to impressive level of success.
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REFERENCES
Books and Journals
Alfuraih, S.I., 2008. April. Business in Saudi Arabia: A case study. In Information Security and
Assurance. International Conference. pp. 176-180.
AlGhamdi, R., 2012. Factors influencing strategies adoption by retailers in Saudi Arabia: A
quantitative analysis. International Journal of Electronic Commerce Studies. 3(1). pp.83.
Bozionelos, N., 2009. Expatriation outside the boundaries of the multinational corporation: a
study with expatriate nurses in Saudi Arabia. Human Resource Management. 48(1).
pp.111-134.
Eid, M.I., 2011. Determinants of customer satisfaction, trust, and loyalty in Saudi Arabia.
Journal of electronic commerce research. 12(1). pp.78.
Elamin, A.M., 2010. Males' attitudes towards females in Saudi Arabia. Personnel Review.
39(6). pp.746-766.
Jenkins, R., 2013. Transnational Corporations and Uneven Development (RLE International
Business): The Internationalization of Capital and the Third World. Routledge.
Lippman, T.W., 2008. Partnership with Saudi Arabia. Basic Books.
Lopez, C., 2009. Internationalisation of the Spanish fashion brand Zara. Journal of Fashion
Marketing and Management: An International Journal. 13(2). pp.279-296.
Ricks, D.A., 2009. Blunders in international business. John Wiley & Sons.
Online
Challenges and Opportunities in International Business. 2012. [Online]/ Available
through :<http://2012books.lardbucket.org/pdfs/challenges-and-opportunities-in-
international-business.pdf>. [Accessed on 5 May 2016].
Research in International Business and Finance. 2015. [Online]. Available through
:<http://www.coppead.ufrj.br/upload/publicacoes/Predicting_Efficiency_in_Malaysian_Isl
amic_Banks.pdf>. [Accessed on 5 May 2016].
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