Case Study for Zara

Abstract

The main purpose of the study is to discuss the most important aspects of Zara's approach to Information Technology Management. Zara is a good case study to show manufacture, design, and distribution together with Inditex and sale of textile clothing and footwear retail in different parts of the world. The Zara business model is based on offering the latest fashion with quality and value. In its stores there are two new collections per week and get to design, produce, distribute and sell their collections in four weeks, while competitors take several months.

Abstract3

Executive summary4

Introduction5

Background to strategic management6

Research question7

Theory8

Power suppliers 9

The competitive rivalry 9

Threat of new entrants 10

Consumer power 10

Application theory 10

Politico Legal Environment11

Economic Environment11

Social environment12

Environmental Technology13

Environmental Component13

Conclusions14

Executive summary

Zara is happy with her prosperous situation in Spain until the creation of the group Inditex, headquarters of the group. Zara opens its first store in Portugal, in Porto in 1988. This is the beginning of a great extension. Subsequently Zara becomes established in New York and Paris. Inditex in 1991 introduced a new brand: Pull & Bear and buys 65% of Massimo Dutti Group. In 1992, the international expansion of Zara intensified till 1994. The year 1995 is where Zara takes over 100% of Massimo Dutti and introduces shops in Malta and Cyprus. In 1997 Zara enters markets in Norway and Israel. In 1998 Zara alter its strategy by expanding its expansion in non-European countries but also by introducing Bershka, a brand designed for young women in Argentina, England, Libya, Turkey, Japan, Kuwait, Venezuela and the United Arab Emirates. But 2003 is the last group brand announces a real change, Zara Home.

Zara is now present in more than 1,000 stores worldwide, including 103 in France. Previously unknown on the hexagon, Zara became in short time a leading brand and present in many wardrobes of men and women lovers fashion clothing, affordable and close to the creators of luxury models.

In terms of classification, Zara can be placed in the middle range, between luxury goods and those distributors cheap. Zara's main competitors are Gap, H & M or Morgan, etc. Finally, remember that with its 1050 stores (including 103 in France), Zara represents 77% of the turnover of the group and majority of its customers are young adults.

The industry of ready-to-wear industry is constantly changing and requires a high level of responsiveness to business market because it depends on the weather and rapidly changing fashion. The competitive industry can be seen as follows:



1. The intensity of the rivalry:

Industry ready-to-wear market is highly competitive due to competition from international companies like (Zara, H&M) but also national companies that offer products at low prices. The rivalry is very intense in this industry as consumer demand for textiles is inconstant, companies ready-to-wear must be responsive to rapidly changing fashion and temperatures. Thus, companies are waging a war to high fashion products at an affordable price.

2. The substitution products:

Substitute products are products sold in supermarkets and the clothes to ...