Zara Fashion Management: Strategic Advantages, SWOT Analysis & Plan

This report provides an overview of Zara's fashion management strategies, highlighting its competitive advantages in the global market. It discusses Zara's establishment in 1975, its global presence with over 7000 retail stores in approximately 50 countries, and its effective retail mix strategies. The report emphasizes Zara's focus on adapting to customer requirements, shorter response times, and identifying market trends to compete with other fashion companies. It also examines Zara's success in expanding its clientele worldwide, supported by market revenue data and new store launches. The analysis further delves into Zara's strategic competitive advantages, including identifying market needs quickly, focusing on customer demands, prioritizing quality over quantity, and creating artificial scarcity. A SWOT analysis is presented to outline Zara's strengths, weaknesses, opportunities, and threats. The report concludes with an action plan, recommending improvements in marketing strategy, production strategy, and cost reduction to enhance Zara's market position. This comprehensive analysis illustrates Zara's strong position in the international market despite a few flaws.

Running head: ZARA FASHION MANAGEMENT
Zara Fashion Management
Name of the Student
Name of the University
Author Note

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Zara is a Spain based fashion brand which was established in 1975 in Galicia. Zara is a notable
fashion brand that produces a huge number of styles per year, which are quite versatile in nature.
They have products for all age groups in the society. A middle aged woman will find Zara
appealing due to its cost effectiveness while, on the other hand, a teenage girl will buy Zara due
to its incorporation of attractive, fashionable and contemporary fashion styles in various
designs and outfits. Although Zara is a Spain based company, it has its retail stores in different
countries of the world such as Morocco, India, countries of Far East Asia. Roughly it can be said
that, Zara has over 7000 retail store in almost 50 countries in the world. In 2017, almost 12589
people were employed in Zara Fashion on a worldwide scale (Dutta, 2002).
The primary 6Ps of the retail mix are pricing, location, store layout, communication mix,
customer service and merchandise assortment. Pricing is one of the most important factors in
retail mix and it is decided by the retailer as per the affordability of the customer. Location
includes deciding an appropriate place of the company’s store so that customer can enjoy
enhanced and convenient accessibility of the products. Store layout is the physical appearance of
the retail store that includes ambience, lighting, access to the products. Communication mix
include the promotional factors that are used by the retailers for promoting their products through
various techniques such as direct marketing, leaflets. Customer service includes those people
who are involved in providing the products to the customers of the company. Lastly, the
merchandise assortment comprise of the products of the customers’ needs and retailer should
concentrate on the needs of the customers ( Dutta, 2003).
As a part of the marketing mix, Zara strives to adapt to the changing requirements of the
customers and as a part of this, Zara focuses mainly on shorter response time and they ensure
that their stores will carry only those products that are demanded by the customer at that time. In

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order to compete in intra market competitions with the other notable fashion companies, they try
to identify the latest trend of the market and according to that they identify their products to sell
in the market. As an advantage Zara, it has been noted that other companies take a long time that
is 4-12 months to identify the market needs. In addition, Zara appoints a large a design team who
are involved in research processes throughout the year. Another important strategy of Zara,
which proves to be advantageous to Zara is the reduction in the quantity of production. As a
result, the company is successful in creating an artificial scarcity of the product in the market
(Dutta, 2003). As with the less availability of a particular product, the product will be more
desirable in the market. In addition, Zara also produces more number of styles instead of the
quantity, whereas the competitors of the company mainly focus on the quantities. By such
strategies, Zara competes successfully in retail intra market competitions.
Zara Fashion is successfully expanding its clientele and popularity in a worldwide manner. This
fact can be supported by several marketing data such as market revenue, new store launches in
the world, increase in the gross profit from the market. From a report it was noted that, Zara has
enhanced their business in UK in a great manner. In UK, almost 51 million euro was gained by
Zara Fashion at the end of January 2018 and that was 30% higher than that of the company’s
previous year revenue from that country. The overall sales was hiked by 17% in that same period
of time(Jahshan, 2019). Zara had opened new 106 stores as a part of their business growth in
different part of this world. In addition, now Zara’s men, women and kids’ collections are
available in almost 202 markets around the world. Zara’s new website has got success in
different countries of Africa as well. The revenue from the Asian market is not so far behind.
From the Asian market , the amount revenue generated was almost 1.3 billion euros that is higher
than that of the previous year (Profits, 2019). Moreover, Zara had earned its position in the list of

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Forbes. It held the 46th place in the category of World’s Most Valuable Brands in the year of
2018. Zara and its flagship brand Inditex group has more than 2200 stores in 96 countries around
the world. Apart from the Spain, China has highest number of Zara stores in the country and that
is almost 223 stores and in France the number of stores is almost 150(Zara on the Forbes World's
Most Valuable Brands List, 2019).
The term strategic competitive advantage refers to a marketing scenario in which a company
gains more profit than that of the market’s average profits, in comparison to its rival companies
in that market. The following strategies are mentioned by which Zara has gained strategic
competitive advantages (Gamble & Thompson, 2014). They are-
 They identify the market needs as soon as possible
 Zara focuses on the needs of the customers particularly and sell only those products that
are demanded by the customers
 Zara is focusing on quality over quantity that is they are producing more number of styles
and designs throughout the year and almost 12000 types of styles are introduced by Zara
in every year.
 In addition, they are producing less quantities of different products of new styles. This
creates artificial scarcity of the product in the market and as a result the demand of that
particular product is highly increasing.
SWOT Analysis
Strength
From the research the marked strengths of Zara are as follows
 Fast fashion understanding

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 Quality of the products
 Demand by the customers
 High revenue generation from the market
 High brand value
 Affordable pricing strategy by the company
Weakness
The weakness of the company is as follows
 Presence of less number of markets in a few fast growing markets such as Malaysia ,
Thailand, India.
 Less aggressive about the marketing and sales processes while comparing with other
competitor of the market.
 Less amount of production although it is a part of their strategy
Opportunity
 Presence of first fashion in recent times.
 Use of modern technology to measure the customer experience that is use of AI.
 Expansion of retail chain in various countries of the world.
Threats
 Competitive threats that is presence of other fashion retail company in the market
 Low price of other company than that of Zara

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 Legal and political threats to the business industry due to changed government rules
and regulation
 With globalization enhancing costs of the raw materials and as a result increased rate
of products (Hansen, 2012).
Action Plan
From the market research of the company a few recommendation can be noted for the
Zara and they are-
1) Zara should focus more on the marketing and business strategy of their product like
other competitive company of the market.
2) They should change their production strategy, for example, with growing requirement
the production of the product should be increased instead of lowering the production
to create artificial scarcity in the market.
3) Zara should focus more on the fact that how can they reduce the cost of the product
and it will help them to generate more revenue from the market.
Hence it can be concluded that, although Zara fashion has a few flaws, they are doing
quite well in the international market. So it can be said that, Zara is in very good position
in the market in terms of generating market revenue.

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References
Asian Market. (2019). Asian markets boost Zara profits - Report - Executive. [online]
Fashionunited.com. Available at: https://www.fashionunited.com/all/488182-
asian-markets-boost-zara-profits.html [Accessed 23 Feb. 2019].
Dutta, D. (2002). [online] Thirdeyesight.in. Available at:
http://thirdeyesight.in/articles/ImagesFashion_Zara_Part_I.pdf [Accessed 23 Feb.
2019].
Dutta, D. (2003). Thirdeyesight.in Retrieved from
http://thirdeyesight.in/articles/ImagesFashion_Zara_Part_II.pdf
Gamble, J., & Thompson, A. A. (2014). Essentials of strategic management. Irwin
Mcgraw-Hill.
Hansen, S. (2012). How Zara Grew Into the World’s Largest Fashion Retailer. [online]
Nytimes.com. Available at: https://www.nytimes.com/2012/11/11/magazine/how-
zara-grew-into-the-worlds-largest-fashion-retailer.html?
nl=todaysheadlines&emc=edit [Accessed 23 Feb. 2019].
Jahshan, E. (2019). Zara profits & sales surge in the UK - Retail Gazette. Retrieved from
https://www.retailgazette.co.uk/2018/10/zara-profits-sales-surge-uk/
Zara on the Forbes World's Most Valuable Brands List. (2019). Retrieved from
https://www.forbes.com/companies/zara/#2b8ec43c7487