CASE STUDY OF ZARA
A BETTER FASHION
BUSINESS MODEL
ASIS I CATMUNAN I DANTES I DELA CRUZ
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Introduction
- One of the world's most well-known
brands and one of the world’s largest
fashion corporations
- Parent Company of Inditex- The 3rd largest
brand in the clothing business
- First store is in Spain in 1975
- Currently has 2600 stores in 76 countries
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VIEWPOINT
The researcher will use the point of
view of Miguel Diaz, director of
finance and operations of Zara
because of the Centralized Logistics
Model. The director of finance and
operations will determine and
analyze the plan on how the
company will increase the growth in
terms of international market.
TIME
CONTEXT
It was started when the Zara Clothing became
well-known worldwide and conduct a Global
expansion. In 1990, Zara clothing company
decided to expand their global market
aggressively, which included Portugal, New
York (USA), Paris (France), Mexico, Greece,
Belgium, Sweden, Malta, Cyprus, Norway and
Israel. Today, there is hardly a developed
country without a Zara store.
Statement of the
Problem
Foreign expansion is limited owning to its
highly centralized logistical style. It needs to
expand its distribution area and improve its
capacity is sensible. Zara's main distribution
area is in Spain, and it will be tough for them
to expand while their base is solely in Spain.
Dealing with issues such as competitors,
retailers, and severe competition, as well as
a need for plus-size clothing, high
operational costs, and a mature market.
Objectives
To increase growth
internationally of the company
that will lead to a much
success worldwide
To come up with the strategy
so that the company can
compete aggressively against
competitors
To help analyzing on where
could the company expand
the store as well as for the
benefit of the community
Areas of Consideration
Strength Weaknesses
Strong Supply Chain Managemet Limited Inventories
In-House production Expansion to US and Asia – Pacific
Affordable Prices Does not spend on Advertising
Design Team
Efficient Production Managements
Opportunities Threats
Growth in Online Market High Competition
Sustainability COVID – 19
Price War
Imitation
ASSUMPTION
1. Planning to go internationally
and target more regions will lead
them to much success worldwide.
2. Increasing international growth
leads to more fashionable ideas
that are prevalent around the
world.
3. Finding a new distribution
center and expanding its
operations can minimize the time
in creating a product.
ALTERNATIVE CAUSE OF ACTION
Establish a
Build up
New Customer
Geographic
Distribution Service
Segmentation
System
ACA 1 ACA 2 ACA 3
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+
ACA 1
ADVANTAGES
Larger market Establish a New
Provide more controls toward Distribution System
the product
Additional profit
Direct customer
DISADVANTAGES
Additional expense
+
ACA 2
ADVANTAGES
Customer Service
Availability of all sizes
Better public image
Customer Relationship
DISADVANTAGES
Increase of raw materials
Spent Money
+
ACA 3
ADVANTAGES
Build up Geographic
Strong relationship with
customer Segmentation
Personalized marketing
High quality of Products
Affordable Price
DISADVANTAGES
It takes time to be recognized
Decision Matrix Plan of Action
CONCLUSION
Decision Matrix
ACA 3 which is build up
geographic segmentation is
the best option to improve
the Zara Fashion Business
Model among the 2
alternative courses of
action. This is both
advantageous to the
company and its
consumers.
PLAN OF ACTION
Person Time Frame and
Activities
Responsible Budget
1. Conduct a meeting in General Manager Time Frame: 3 Days
preparing and Supervisor and Budget: 4,000 for food
improvement Sales Team allowance
Time Frame: 2 – 3 Months
2. Data Gathering or Research Team,
Budget: 10,000 for food
Surveying to the General Manager and
and transportation
consumer Sales Team
allowance
General Manager Time Frame: 1 Days
3. Conduct meeting to
Supervisor and Budget: 3,000 for food
different distributor
Distributor allowance
PLAN OF ACTION
4. Budgeting for raw
materials and finding General Manager Time Frame: 2 weeks
affordable but the best And Sales Team Budget: 6,000 for food allowance
factory
Time Frame: 2 Months
5. Advertising of New Marketing Team and
Budgets: 20,000 for advertising expenses
Products Sales Team
(Magazine, Pictorial)
Time Frame: 6 Months
6. Launching and Marketing Team and
Budget: 15,000 for social media promotion
promotion of product Sales Team
and food and transportation of the employees
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