Rachel, Becca, Chase, Carlos, Anna, Haley, Kiki

Zara Case Analysis

What is Zara?

○ 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

○ 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

○ 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)

Brand Image: Fast Fashion

Rapid pace

Designs move quickly

Inexpensive

Dexterity of supply chain

Immediate customer gratification

Quick manufacturing

1. Expand Empire

2. Establish more of a presence in America

3. Maintain brand image, while cutting costs (cheap, fast fashion)

Problem

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

○ 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

○ Risky brand image

○ Financial issues

○ Supply chain under pressure

○ High labor costs

SWOT: Weakness

○ 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

○ Competitor innovations ○ Global competitors copying production techniques ○ Economic conditions○ Change in consumer preferences ○ Global taxes/ fees/ exchange rates/ laws

SWOT: Threats

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

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

○ 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

○ Great financial crisis: European Union Recession ○ Trade imbalance, inflation, real estate bubble○ Increase in unemployment○ Decrease in GDP

PEST: Economic

○ 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

○ 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

Marketing Strategy

○ Four P’s○ Recommendations○ Timeline

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

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

1. Expand Empire

2. Establish more of a presence in America

3. Maintain brand image (cheap, fast fashion)

Marketing Strategy: Goals Reiterated

Marketing Strategy: Recommendations

Marketing Strategy: Timeline

Roll out online stores

2011

Penetration of U.S. Market

2016 Begin investing in

airplanes

2021

Streamline Supply Chain

2026

Questions

"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