Its net income was on the rise hitting million on revenues of 3, million by end of fiscal year. Any sensible business would focus on market expansion and consolidation within its current region as Zara did if the market had the right purchasing power and favorable cost for the various means of production Mahadevan, This meant that labor was available cheaply.
In addition, its rich tradition in textile and their non discriminatory behavior provided a good opportunity for Inditex to develop and learn the tricks of developing trendier fashions that would suit high end markets like Italy.
However, the poor vertical integration in textile value chain and poor communication networks meant the company had to invest heavily eating into its profits which erodes the gains.
This made it sensible for the company to focus on other regions in Europe to maintain its competitiveness. Choice of product market selection is influenced by product, market and marketing factors Srinivasan, This was done by a team of commercial experts who analyzed the micro and macro variables and the future prospects to influence apparel retail chain with profitable gains.
Normally, when companies identify new markets with similar consumer behavior, tastes, preferences and purchasing power, it becomes easier to penetrate such markets.
This assertion is supported by the case study which indicates studies that showed the different countries in Europe and their market behavoiur in relation to apparels. The approach involved three entry strategies, that is, company owned stores, joint ventures, and franchises, where only one approach was employed per a given country.
Though the three strategies were in use, Zara seemed to favour company-owned stores given that by end ofit operated company owned stores in 18 countries outside Spain. Jain noted that companies can adopt exporting, joint ventures, franchise or mixed strategies.
The strategy makes sense given that such stores targeted the high profile countries and high —end markets meaning more revenue to the company due to higher purchasing power at fewer bargains.
However, the amount of resource allocation and management time spent makes the strategy unsustainable. This could explain why the strategy shifted to joint ventures and franchises in most countries it entered towards late s.
Making a choice among the three entry strategies based on market conditions and barriers to entry possibly explains why Inditex had a higher penetration rate in new market with remarkable success.
Zara also had policy of standardizing its marketing approach thereby using the same business system in all the countries it operated with minimal variations in retailing operations at the local level.
Normally, the first store opened in the country become the flag ship store and defined the marketing mix to be replicated in other retail stores across a particular country. Paul and Kapoor noted that standardizing product marketing has several advantages including building a global brand, economies of large scale production and developing a global marketing mix at minimal costs.
In terms of product development Zara produced three product lines apparel targeting women, men and children. This was done by producing only for markets that showed unambiguous positive response to designs.
Price varied depending on quality of apparel and target market where high end markets had higher mark-up prices. Promotions were standardized in that advertisement budget was pegged at 0.Zara, one of the largest clothing retailers, was founded in in La Coruna, Spain.
With its innovative strategy, it achieves global expansion an. Access to case studies expires six months after purchase date.
Publication Date: April 01, Focuses on Inditex, an apparel retailer from Spain, which has set up an extremely quick response. Title: Case Study: H&M in Fast Fashion: Continued Success.
Word count Abstract This report contains the analysis of value and culture of reputable apparel retailer H&M, as well as three analysis method, which is PETEL, Porter’s five forces, and VRIO framework, to analyse the external influence factors, competitors, and competitive advantages of H&M.
|Zara IT for Fast Fashion Case Study | Sai Sapnu - metin2sell.com||Fast Fashion HBS Executive Summary The case is based on the retail chain Zara located in Spain, it is regulating under the global value chain, and it is offering premium quality products for both the middle class and the higher-class customers.|
|ZARA: Fast Fashion » Case Solution||Case study solutions by top business students. Fast Fashion The case study focuses on Inditex, an apparel retailer, which has created a very quick response system for its ZARA chain.|
|Zara: Fast Fashion Case Study Analysis Summary||
Zara’s product development teams attended high fashion fares and exhibitions to translate the latest seasonal trends into the designs. Hence, a super fast rate of operational responsiveness to customers was maintained and the DC was more of a place to merchandise than merely for storage.
Zara: IT for Fast Fashion Case Solution,Zara: IT for Fast Fashion Case Analysis, Zara: IT for Fast Fashion Case Study Solution, Overview Zara was founded by the richest man of Spain, Amancio Ortega who opened the first store of the company in in La Coruna; he was still the larg.
The case study focuses on Inditex, an apparel retailer, which has created a very quick response system for its ZARA chain. Full analysis, words.