Analyzing Zara's International Business Operations and Strategy

This report provides a comprehensive analysis of Zara's international business plan, focusing on its expansion strategy, market analysis, and operational frameworks. The report begins with an overview of Zara, its products, and its global presence, including its acquisitions and mergers strategy. It then delves into the company's market entry strategy, specifically targeting the Southeast Asian market, with a detailed focus on Malaysia. The report applies various analytical frameworks, including PESTLE, McKinsey 7S, and macro/micro analysis, to evaluate Zara's strategic business units and identify market opportunities and threats. The report examines the chosen product (bathroom sleepers) and its potential in the Malaysian market. Furthermore, it evaluates Zara's international operations, the McKinsey 7S framework, and provides insights into Zara's approach to customer experience, market share, and competition with other brands. The report concludes with a summary of key findings and recommendations for Zara's international business strategy.

Title : ZARA

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1-...........................................................................................................................................1
Explaining the role of an acquisitions and merger and analysing the key point analysis of the
businesses...............................................................................................................................1
TASK 2............................................................................................................................................6
Analysis and evaluation of chosen business or international operations...............................7
Analysing the way Zara addresses the key as well as current issues in international operating
environment..........................................................................................................................16
CONCLUSION..............................................................................................................................19
REFERENCES..............................................................................................................................20

INTRODUCTION
International business plan is the set and systematic plan for the business that grow up the
business opportunities in the global market. Business organizations developed plan with their
aims, objectives along with resources and determine in which market they will enter. In such
process, company enters into international market with their product or services to reach the
clients/customers. The purpose of the new business plan is to prepare company to enter into the
global market place to maximize the profit and global reach. Such present chosen company Zara
will plan to explore the business opportunity and launch the new product in the Asia market.
Further, report will explains the role of acquisitions and merger to analyse the consultancy
outputs in the great context. The aim of the study is to describe the internationalisation strategy
in order to using a variety of analytical frameworks which is looking at both management
specific factors. In order to analyse the market opportunities and threats of the business
environment study applying the marketing models as well such as PESTLE, Mackenzie seven,
Smart objectives, macro and micro analysis about the strategic business units.
TASK 1-
Explaining the role of an acquisitions and merger and analysing the key point analysis of the
businesses
Merger and acquisition is a general in terms of using describe the consolidation of
companies or assets through various types of financial transaction including merger, acquisitions,
consolidation of companies or assets through various types of financial transactions. In order to
take over the business of other is known as Acquisition. Or on the other side, when two
companies mutually ready on the set standards this is called mergers. In order to get the global or
international market most of the company take help of such methods either they take over the
other company or they merge with leading companies.
In order to take this research further here is the brief summary or introduction of the
chosen company.
Overview of the company
ZARA is the international brand based in Galicia. ZARA deals with range of products in
clothing, accessories, shoes, swimwear, beauty and perfumes. This would help to continue the
work opportunity and goals. It is the most branded and premium brand in clothing industry that
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always come up with new trends and fashion which is unique and distinct. Inspired story of the
business is said by Edison that ZARA has be expand from the Spain market to the other market.
ZARA is the most effective and attractive brand which is also demanding and favourite for the
people. ZARA known for its eco friendly company culture because company invested in solar
panels and wind turbines in the main office. There one thing about ZARA that is surprising
which requires to be more energetic and effective besides that it will help to continue the work
outcomes and effectively done in precise manner.
ZARA has stores in more than 88 countries with just over 6500 outlets. Zara has
flagships stores on Fifth Avenue in New York, Oxford Street in London. Zara has their own
mobile application app through they provides their product or services. In the context of the
business products or services so the ZARA sells to both women's or men's with high range of
effective learning outcomes and business opportunity.
ZARA has planning to offer Bathroom sleepers for both men's or women's. As per the
reports Zara India rise 72% profit in the financial year of 2018 (Financial Express, 2018).
Annual report of Zara Company
It has been identified by the Zara Annual Report 2018, that Zara focused on its core
priorities in order to integrated supply chain management, socially responsible towards the
customers and societies also it maintained the excellence in its products as well. However, Zara
overall performance in 2018 was very nice in terms of fully integrated with digitalisation & fully
sustainable growth. Zara revolutionised its customer purchasing habits which shaping new
expectations for products. In past 6 years Zara has invested more than €9.4 billion on the
company's growth and transformation, €2 billion of that total sum been earmarked to introducing
ground breaking technology into the model. Therefore, In 2018 Zara has almost raised capital
expenditure to €1.6 billion.
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Economic Scale of Zara
Spanish fashion brand Zara Economic scale quite excellent. Zara is famous for its rapid
changes in the fashion styles and come up with the new styles and trend. It spread its reach
across the world. Zara is the leading brand from the other brands like H&M, Gap, etc.
Positioning of Zara as compare to other brands
As compare to other brands like H&M, M&S Zara makes the customer experience king
because its capitalise on the store experience by continuously offering reasons for customers to
visit the stores and catch the trendy collection from the store. Unlike other brands Zara exchange
with customer for value because Zara having the unique understanding of the entire value
proposition it exchange with the customers. Zara is not the cheapest in the fast fashion arena but
they delivers the high quality standard value products with high appealing prices.
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Illustration 1: Price performance
(Source : Annual Report. 2018)

As per the above data both the brands are having different aspect of the product value
with different segments where the H&M drop from $19 billion in 2018. on the same hand, Zara
is currently sitting at a brand value of $18.4 billion (The difference between the two successful
brands. 2019).
Market share value
Market Share of the company is high and stable as compare to other brands because of
the strong brand value and preposition. Zara almost provides their collections in more than 202
markets out of which 47 still not getting the online shopping options.
Overview of the South east Asian Countries
ZARA is planning to launch the new product line business by launching the bathroom
sleepers in Malaysia. it is the home of several emerging market countries making the region of
the most dynamic in the world. This is the huge market where the company get highly beneficial
to earn maximum profit.
The benefits of Asia market is strategic location, the relative ease of doing business,
affordability, stable legal, political and economical environment.
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Illustration 2: H&M and Zara
(Source : The difference between the two successful brands, 2019)

ZARA can successfully achievable their set goals and objectives with high working with a local
partner. This might helpful for the company to get the basic knowledge of the local market or to
identify the current needs and wants of the customers. This business opportunity is the most
beneficial and effective for the country to gain advantage. Another way to get successful in the
Asia market by getting the deep understanding of local society that are difficult form country to
country.
Malaysia Market
Malaysia is one of the most leading and growing business market. Besides, Malaysia is
the middle income country that consistently shows a robust growth. For ZARA Malaysia is the
most preferable choice to gain profit maximization goals. Guided by the government which aims
at making Malaysia a high income country by 2020 along with high economic development plan.
Malaysia is inspired by the high modernization (Overview of Business In Malaysia, 2019). That
the economy is pushed towards the higher value added industries and services. It is the most
growing business gain through company can get the more developing results for the
organization. Business Asian business market belongs to the different range of styles. In order to
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attract the customers of Malaysia ZARA needs to put some efficient learning and efficient out
goals and business opportunity task. Provides the best and successful objectives will enhance the
business in Malaysia and consolidate the place as pillar of country expanded business.
TASK 2
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Analysis and evaluation of chosen business or international operations.
ZARA is the well known brand in the clothes and accessories all across the world. It is a
popular fashion designing and manufacturing company (Alon and et.al., 2016). Zara has always
come up with new different unique styles that better understand the opportunities and goals to
make the new emerging styles and to attract the customers and global buyers. There are different
international strategies that company could adopt for entering into the international market.
Chosen Product
After launched clothing, accessories ZARA planning to launch the Bathroom sleepers.
ZARA launch the Bathroom sleepers which made by the smooth and soft fabrics with high
quality material. It helps customers to get comfort and give the best outcomes from the
customers.
Zara International operations
Zara has almost 6300 stores in 88 countries as according to the revised data. It holding
the international position in order to reach the market opportunity (Guedes, 2016). Through
business model of ZARA it aims is to maintained the sustainable market position. ZARA also
having a Inditex business opportunity and gained the leading business opportunity. That makes
the business more effectively and leading business opportunity. More than 5000 employees
across the various departments work here. The site is also home to 10 of Zara factorise and its
largest distributors and leading business markets. Zara is the international fashion brand of
Inditex. Nowadays buyers want to see a new trends quickly.
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McKinsey 7S Framework
It is a management model in order to developed the business consultants and reviewing
an organisation marketing capabilities from the different viewpoints (McCloud, 2018). There are
seven model of McKinsey that evaluate the company effectiveness and evaluation process.
Strategy : Strategy define the key methods that company adopts in order to accomplish the aims
and objectives. Zara maintained the quality of product or services and always launch the trendy
collection. Such as new launch of Zara is bathroom sleepers with high quality stuff this strategy
of Zara can give high sales profit to the company.
Structure : Structure model define the company resources and also define the position that
occurred the business opportunity gain. The organisation structure of the business also very
much essential to define the best strategical strategy that helps to be more effective and learning.
Organisation structure can helpful to support Zara and helps in promoting the new product in the
market.
Systems : Business processes and the technical platforms used to support operations
(Pourhoseingholi, Vahedi and Baghestani, 2015). Zara is well established in terms of technical
which immediately solves the customer technical issues into best manner. However it certainly
affect the business if company fails to meet the technical requirements of the customer such as
online shopping. Zara provides the 24 hour services to their customers in case of any query and
issues. Systems can helpful or beneficial for the company to support the new strategy of the
business which is bathroom sleeper. New concept or product of the company enable to achieve
the higher customer satisfaction.
Staff : Staff are the real supporters of the company that makes the company number one and
leading. Zara maintained the professionalism within the outlets that makes customer happy and
satisfied. Skilled and qualified staff can helpful to support Zara to accomplish the process of new
project in system manner. Besides, qualified staff is very useful for the organisation to create
new business plan.
Skills : Capabilities to complete different activities. In other words, skills and knowledge of
employees and business makes business different from others. It makes the business unique and
different from other brands (Rasnan and et.al., 2016). Unique collection and capabilities makes
Zara more popular in the leading market. Skills and capabilities makes the company more
stronger and stable in the competitive market.
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Style : Style define the term company culture which define the at what extend company lead
and interact with staff and with their other stakeholders such as customers, investors, government
etc. For example : it has been analysed from the research that Zara used the solar panel in their
headquarter office to promote the eco friendly environment. It helps to maintained the leading
and most effective. Style can be beneficial for Zara to make different from its competitors such
as new bathroom sleepers can make the brand differ from other brands. Style is the unique
symbol of brand which is very essential.
Shared Values : Summarized in a vision and or mission can help to motivate the business
environment that also define the business ethics towards the business environment. Values
promote brand ethics and reputation in the market. Zara should always be a customer oriented as
they will help them to maintained the good image in the market.
PESTLE ANALYSIS
Political : Political factor of the business environment impact the business in terms of
purchasing fabrics locally, especially if the taxation on imports fro other countries increases.
Political factors influenced by the changes in policies of government or by the fashion trends
(Sørensen and et.al., 2015). On the other side, political stability can affect the business in
positive manner by smooth trading business process.
Economical : Economy is influenced from the market stability that variant from
recession or crises. Positive economy has always encourage business to earn profit. On the same
side, low economy growth affect the business into different form that less effective interns of
earning profit maximization.
Social : Social factor is one of the most significant factor of the business environment
that get affected from the society influences. Social factor can affect the business due to
changing the needs and wants of the customers, changing trends, dynamic business environment
and ineffective learning opportunity to get the things perfect and challenging.
Technological : Technological factor is the another significant factor of the business
environment. Technology is the beneficial factor through company get benefited to attract the
customer faith and attention towards the business profit (Zheng, Hu and Gao, 2018). For
example : The biggest role of technology in online shopping which is highly demanding all the
time.
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