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Zara company portfolio

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Maggy Ivanova

on 1 December 2015

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Transcript of Zara company portfolio

Zara company portfolio

Zara is owned by the public limited company "Inditex".
Inditex is one of the largest fashion retail groups with 8 brands: Massimo Dutti, Bershka, Zara, Stradivarius, Oysho, Zara Home, Uterque, Pull&Bear.
Ownerships and Objectives
"Zara is always striving to meet the needs of its customers at the same time as helping to inform their ideas, trends and taster. The idea is to share responsible passion for fashion across a broad spectrum of people, cultures and ideas.
Mission & Vission Statement
Objective: Focus on connecting employees, present and potential consumers more intimately to the brand.
Marketing Strategy: Increase purchase frequency among current customers and open new stores.
Communication objective: To increase brand awareness and favorable attitudes among customers.
Objectives and Strategies
"Being ethical":
reduces costs of fines
more positive publicity
attracts ethical customers
very trendy
"doing the right thing" attracts customers
customers are attracted by socially responsible companies.
Why would they be setting ethical objectives?
Zara states that "through Zara's business model, we aim to contribute to the sustainable development of society and that of the environment with which we interact. The company's commitment to the environment is included in Inditex group's corporate responsibility statement."
Ethical Objectives and CSR
Margarita, Khorshyd and Jagoda
Pros and Cons of PLC
Pros
Limited Liability
Shares are sold publically, which means more potential capital.
Banks see Public Limited Companies as more stable.
Cons
More reporting requirements.
Minimum capital required to start a busness is $50,000.
Shareholders may take over.
Environmentally commited by:
being an eco-friendly store and saving energy.
recycle and produce less waste by making recycling hangers, etc.
use of ecological fabrics and organic cotton.
transport with the help of biofuel.
SWOT analysis
Strenghts, Weaknesses, Opportunities, Threats
Strenghts
• Global outreach
• Strategic locations
• Seamless distribution strategy
• Minimalistic store image
• Fast-changing collections
Weaknesses
• Brand image closely tagged to competitors
• Limited stocks
• Lack of Marketing
• Communications
Opportunities
• Demand for high-fashion at affordable prices
• Growing Asian market (especially China)
Threats
• Fierce Competition
• Lawsuits related to sweatshops
• Possible imitation of goods
• Dilution of brand equity
Internal and External Stakeholders
Internal:
Employees (highly-motivated team), Managers (clear strategic direction, strong company resource), Owners

External:
Suppliers, Society, Government, Creditors, Shareholders, Customers (Loyal), Environment (Social Council, Commitments with NGOs)
Steeple Analysis
Social:
In European countries social factors have a significant influence on the fashion industry. Business needs to introduce the newest fashion trends in order to attract their younger customers and be successful.

Technological:
Advanced technology allows companies to conduct online shipping, maintain an effective supply chain and distribute raw materials quickly. They need to use the newest technology in order to survive in a fast-moving market.

Economic:
Generally middle-class people are avoiding expensive products, therefore they tend to buy low priced goods. International diversification might be a risk factor for the fashion retail industry due to changes in people's socio-cultural backgrounds. European fashion firms can benefit in the U.S. because of the value of the dollar, which weakened against the euro after the global financial recession in 2008.
Impacts of culture and globalization on the growth of ZARA
domestic operation from 1975-1988
Steeple Analysis
Environmental:
A lot of governments regulate the environment. The fast fashion industry presents a special problem because companies change clothing lines very quickly, generating significant amounts of waste.

Political:
Creating several social relationships and providing aid in poor areas in different developing countries has given Zara and other fashion firms a positive reputation in the international political field.

Legal:
Changes in patent laws, antitrust legislation, tax rates, and lobbying activities can affect firms significantly.

Ethical
: As part of Inditex, Zara entered into an agreement with the International Labor Organization (ILO) and the United Nations and agreed to principles and policies of the Organization for Economic Co-operation and Development (OECD) to improve the economic and social well- being of people. Zara does not use forced labor and do not hire child labor. Zara states that there is no discrimination, provides safe and hygienic working conditions, does not demand extremely excessive working hours and recognizes environmental awareness.
the limited market growth opportunities in spain => main reason to expand internationally.
at the moment Zara has over 2,000 in 88 countries and known as the biggest retailer
global success due to the speed at which Zara produces and distributes new items
not mainly influenced by their Spanish background/ following newest global trends
their products are the same everywhere despite the cultural differences ; produced in great mass with high speed
stakeholder affecting ethical objectives
Customers => the main stakeholders for Zara

To keep their main stakeholder, the customers satisfied
to keep stakeholder such as Greenpeace and other environmentally concerned groups satisfied
Solution: opening eco-friendly shops , CO2 reduction programs , no use of animal fur
To keep Greenpeace groups and other environemnetally concerened groups

Solution:application of the code of conduction , ethical training
To keep the satisfactory rates high among the manufacturures and supplier
Solution: consolidation of sustainability ratings, Corporate transparency to the shareholde

Ensuring shareholders Zara as well as the government that Zara is functioning legally and properly
Innovation affecting expansion:
production of 840 million garments a year, 1200 different designs
"Fast fashion strategy" of Zara : restocking with new designs every 2 weeks
not entirely innovantive: imitation of high fashion designs
innovantive manufacturing and distrubition: happening constantly!
Designing team made up of 200 anynonymous dsigners:
more designers , more ideas, covering up a broader range of customer needs
entirely customer-based decision making: innovation in recieving feeback
Full transcript