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Zara and Industry Analysis

presentation 1 for Strategy
by

Winnie Chen

on 15 October 2012

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Transcript of Zara and Industry Analysis

Clothing industry satisfies the need to
keep warmth
display personality
satisfy the dressing code of certain occasions

Definition: branded clothes targeted at younger consumers (15-35) with medium to low budget and in pursuit of style/fashion Presentation brought to you by: CHEN Miao, DONG Yinfei, LIU Ying, WANG Yue, &YU Qi.. Zara and the Clothing Industry Agenda Value Chain Major Players Industry Overview Description of Zara Industry Analysis Porter's 5 Forces Women's Men's Kids' Home Decor Industry Overview Features A mature industry but experience rejuvenation Growth potential in developing countries International Trading Outsourcing labour intensive production Globalised retailing seasonal feature Trend towards concentration Varied Attributes & Preferences Last 2nd step 3rd step Start (cc) image by nuonsolarteam on Flickr Design Studio Fabric Dye Manufacturing Sewing Workshops Distribution Warehousing Retailing - an industry analysis Porter's 5 Forces Power of Suppliers Typical substitutes: Substitutes Power of Buyers - Relatively weak Threat of New Entry Who are they Raw Materials Dyeing Sewing Packaging Branded Manufacturers Final Consumers Retailer SUPPLIERS Suppliers Branded Manufacturers Generally, Suppliers < Branded Manufacturers Who are they Raw Materials Dyeing Sewing Packaging Branded Manufacturers Final Consumers Retail BUYERS Buyers Branded Manufacturers Retailers have greater power than individuals Take Zara as an example... Vertical Integration
in-house production 50%
purchase material from affiliated companies,
own dying and sewing factories,
production factory only runs one shift : B to C
chain stores

For ZARA, powers of Suppliers & Buyers are weak. Evaluation home-made vintage luxury low cost-effectiveness high switching cost W E A K ... many players Key Players Product Category Price Position Distribution Market Positioning Industry growth Trend Lower Storage Cost More players Will be higher... SLIDE! Internal Rivalry We have identified key competitive advantages: Zara's Competitive Position Short lead time High turnover rate Many designs Frequent visits
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