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Rachel, Becca, Chase, Carlos, Anna, Haley, Kiki
Zara Case Analysis
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○ Background: Foundations, 2008-2010
○ Brand Image: Fast Fashion ○ Problem Facing the
Company: Expansion and Image Maintenance
○ Business Analysis: SWOT, PEST, Competitors
○ Marketing Strategy: Four P’s, Recommendations, Timeline
○ Questions
Agenda
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○ Amancio Ortega founded Zara in 1963○ Flagship brand of Inditex○ 1975: the first Zara opened in Galicia, Spain○ Started with the final price and worked backwards
● Most-efficient production
Background: Foundations
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○ 2008: Consumer slowdown
● Economic downturn in Spain
○ Production cycle was kept close to Spain
● Over spend on shipping costs
○ 2009-2011: First websites
● Increased problems with shipping costs
Background: 2008-2010 (Case)
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Brand Image: Fast Fashion
Rapid pace
Designs move quickly
Inexpensive
Dexterity of supply chain
Immediate customer gratification
Quick manufacturing
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1. Expand Empire
2. Establish more of a presence in America
3. Maintain brand image, while cutting costs (cheap, fast fashion)
Problem
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Business Analysis: SWOT- Helps analyze factors that
affect Zara internally and externally
- Attempt to continue growth and prevent failure
- Cut costs effectively
- Prepare for future trends in markets, technology, investing and planning
S. W. O. T.
Strengths
Threats
Opportunities
Weaknesses
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○ Brand name and recognition
○ Flexibility and responsiveness to sales
○ Efficient business model
○ Expertise in “Fast Fashion” and “Supply Side
Management”
○ Awareness of markets and consumer tastes
○ Powerful production and shipping techniques
SWOT: Strengths
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○ Risky brand image
○ Financial issues
○ Supply chain under pressure
○ High labor costs
SWOT: Weakness
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○ Improvements in technology
○ New fashion trends
○ Entering new markets
○ Efficiency and Innovation
○ Global partnerships or acquisitions to cut costs
○ Introduce new competitive business practices
SWOT: Opportunities
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○ Competitor innovations ○ Global competitors copying production techniques ○ Economic conditions○ Change in consumer preferences ○ Global taxes/ fees/ exchange rates/ laws
SWOT: Threats
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Business Analysis: Competitors○ Trendy and everyday ○ Department stores
and retail outlets ○ Promoted online, on
facebook, celebrity endorsement (Penelope Cruz)
○ Urban casual ○ Value for your
money○ Retail outlets○ Collaboration with
famous designers
○ Basic clothing ○ Expanded through
chains (Banana Republic, Old Navy…)
○ Trademark, casual look
○ Japan’s leading clothing retail chain
○ High quality, high style at affordable prices
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Business Analysis: PEST
- PEST analysis helps to give context (2008)
- Has great influence
on Zara’s ability to solve its problems
P. E. S. T.
Political
Technological
Social
Economic
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○ Jose Luis Rodriguez Zapatero○ Spanish Socialist
Workers’ Party ○ Main focus: economic
downturn ○ Main trade organizations:
EU and WTO ○ Top 5 countries to
which Spain exported: France, Germany, Portugal, Italy, UK
PEST: Political/Legal
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○ Great financial crisis: European Union Recession ○ Trade imbalance, inflation, real estate bubble○ Increase in unemployment○ Decrease in GDP
PEST: Economic
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○ People were not consuming as many non-essential goods and services
○ Decrease in retail consumption
○ People were more stingy with their money → affected
their leisure activities
PEST: Social
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○ Lack of research and development opportunities due to economy
○ Retail technology was not as advanced as it is today
○ Online shopping was not as popular → these numbers have increased greatly since 2008
PEST: Technological
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Marketing Strategy
○ Four P’s○ Recommendations○ Timeline
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Four P’s
PRODUCT
○ “Fast Fashion”
○ Inexpensive,
trendy
○ Exclusive
collections
○ Quality design,
low price
PRICE
○ Relatively same
as competition
○ Low price +
exclusivity =
high customer
value
○ Higher end
brands (Gucci,
Burberry, etc.)
Marketing Strategy: Four P’s
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PROMOTION
○ Online
promotion
○ Social Media
○ Store themes
○ Store openings
(avoiding
August)
PLACE
○ Distribution
Channels
○ Brand name
stores, strategic
location
○ Mobile app
(circa 2011)
Marketing Strategy: Four P’s
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1. Expand Empire
2. Establish more of a presence in America
3. Maintain brand image (cheap, fast fashion)
Marketing Strategy: Goals Reiterated
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Marketing Strategy: Recommendations
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Marketing Strategy: Timeline
Roll out online stores
2011
Penetration of U.S. Market
2016 Begin investing in
airplanes
2021
Streamline Supply Chain
2026
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Questions
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"Crash Course." The Economist. The Economist Newspaper, 07 Sept. 2013. Web. 26 Oct. 2016.
"Crisis Económica Española De 2008-actualidad." Wikipedia. Wikimedia Foundation, n.d. Web. 26 Oct. 2016.
HANSEN, S. (2012, November 9). How Zara Grew Into the World’s Largest Fashion Retailer. Retrieved October 25, 2016, from http://www.nytimes.com/2012/11/11/magazine/how-zara-grew-into-the-worlds-largest-fashion-retailer.html?_r=1
FocusEconomics. "Spain Economy - GDP, Inflation, CPI and Interest Rate." FocusEconomics. N.p., n.d. Web. 26 Oct. 2016.
LU, C. (2014, December 14). Zara supply chain analysis - the secret behind Zara's ... Retrieved October 25, 2016, from https://www.tradegecko.com/blog/zara-supply-chain-its-secret-to-retail-success
Loeb, W. (2016, October 23). Who Are the Fast Fashion Leaders And Why Does It Matter? Retrieved October 25, 2016, from http://www.forbes.com/sites/walterloeb/2015/10/23/who-are-the-fast-fashion-leaders-and-why-does-it-matter/#2334cb7a1554
"Not Tackling the Basic Issues." Social Watch. N.p., n.d. Web. 26 Oct. 2016.
Ruddick, G. (2014, October 20). How Zara became the world's biggest fashion retailer ... Retrieved October 25, 2016, from http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/11172562/How-Inditex-became-the-worlds-biggest-fashion-retailer.html
Zara: Report (Publication). (n.d.). Retrieved October 25, 2016, from http://geographyfieldwork.com/ZARA Case INSPECTION.pdf
"Zara." Zara. N.p., n.d. Web. 26 Oct. 2016.
Works Cited