The competitive companies target similar markets but employ different strategies in their business models to manage the distribution of product lines.
Since then they have expanded operations into 45 countries with stores located in the most important shopping districts of more than cities in Europe, the Americas, Asia and Africa. Throughout this expansion Zara has remained focused on its core fashion philosophy that creativity and quality design together with a rapid response to market demands will yield profitable results.
In order to realized these results Zara developed a business model that incorporated the following three goals for operations: These goals helped to formulate a unique value Zara competitive analysis These three goals helped to shape Zara's current business model.
Zara's Business Model Zara's business model can be broken down into three basic components: Zara's fundamental concept is to maintain design, production, and distribution processes that will enable Zara to respond quickly to shifts in consumer demands. We need to give consumers what they want, and if I go to South America or Asia to make clothes, I simply can't move fast enough.
Capabilities of Zara, or the required resources needed to exploit the opportunities and execute this conceptual strategy, are numerous for Zara.
Zara maintains tight control over their production processes keeping design and manufacturing in-house or with some strategic partnerships located nearby Headquarters.
They have strategic agreements with local manufacturers that ensure timely delivery and service. Through these strategic partnerships and the benefits brought by this proximity of manufacturing and operational processes, Zara maintains the flexibility necessary to design and produce over new items annually.
This capability allows Zara to achieve their strategy of expedited response to consumer demand. Value drivers for Zara are both tangible and intangible in the benefits that are returned to all stakeholders. Tangibly, Inditex, the parent company of Zara, has Additionally, the success of Zara can be demonstrated through their outstanding financial performance.
Intangibly, customer loyalty and brand recognition have provided significant value to Zara. The number of consumers they attract continues to rise and their brand is synonymous with the cutting edge of fashion at affordable prices.
The successful implementation of Zara's business model provides great value to stakeholders and differentiates their business from their peers.
Competitive Advantage Fundamental to Zara's success is their commitment to rapid response in customer trends in fashion, producing clothing often and with short life spans 10 wears.
Their commitment to this goal and the capabilities that they have developed to achieve it, have provided significant competitive advantage to Zara especially in the areas of product development, strategic partnerships and cost of production, advertising and marketing, and information technology infrastructure.
The efficiencies and processes developed in these four functions differ significantly from their competitors and stand out in providing additional value and profitability to Zara.
Zara's Business Model Product Development Zara's unique approach to product development is instrumental to their success.
At headquarters there are teams of commercials who take this information into account to design and effectively plan and produce all of Zara's products. Zara maintains a design team of people, all of which produce approximately 12, new styles per year for Zara. The process of obtaining market information and relaying it to design and production teams expedites product development by shortening the throughput time of a product to weeks from design to distribution.
This process is very different from its competitors. Many competitors rely on a small elite design team that plans both design and production needs well in advance.ZARA's external and internal enviroment. This presentation covers the main characteristics of ZARA, a general view of fast fashion indystry, Porters' Five Forces Analysis, competitors' external environment as well as a complete internal analysis regarding:competences, capabilities, resources, competitive advantage,value chain .
Competitive Analysis for ZARA and H&M. Competition in the fashion industry has always been tough. H&M has always been Zara’s competitor in this industry/5(3).
Strategic Analysis Pulling together both the external and internal factors impacting on Zara as an organisation, it is then possible to establish a strategic plan for the future, in order to ensure the ongoing success of this substantial fashion retailer. First off, sorry for the late late post on Zara.
Got distracted with stuff.. but here goes.
Overview of the determinants of industry profitability (Porter’s Five Forces Analysis) Zara’s competitive position can be quickly summarized using the chart below, where it is seen that Zara has a dual advantage over its competitors: generates more top-line.
In our opinion, according to what we found during our analysis, one of the competitive advantage that Zara has and its competitor lacking is the customer- responsiveness. Even though Zara does not have many investments in Marketing, but Zara relies on the most .
The fashion industry in its entirety is highly competitive, with extensive sales, on an international basis, thus making Porter’s Five Forces particularly relevant to the analysis, when identifying how companies such as Zara can set themselves apart and what types of forces the company can use to achieve a differentiation (Porter, ).