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Business Strategy of ZARA

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by

Melisa Bilgin

on 16 December 2013

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Transcript of Business Strategy of ZARA

Business Strategy of Zara
The business strategy of Zara is based on focusing both cost leadership and differentiation and this strategy is called integrated cost leadership and differentiation. Most important point of this strategy is to maintain balance between low cost and differentiated products. By maintaining this strategy Zara focuses on cost and differentiation as its two competitive advantages.

PROS
Attractive prices
Up to date design
Creating sense of exclusivity
Fast Delivery of new products and trends

General Information
Flagship Chain Store of Inditex Group
First Zara store opened in Spain, 1975
Today, Zara has 1830 stores worldwide including 82 countries.
Fast fashion brand which adopts high fashion styles from catwalk and sells these products at an affordable price

Core competencies are resources and capabilities that create the firms competitive advantage.

1.Differentiation
The differentiation of the products in Zara is based on increasing the number of available styles and decreasing quantities of the same product in the inventory.
For each design, Zara produces small quantities. By this way, Zara obtains a differentiated product line with low cost. Producing low quantities cause to save in inventory cost.
2.Cost Leadership
Cost leadership is obtained by selling its product at an affordable price. In order to achieve low costs but maintain high fashion, Zara imitates the latest haute couture designs and makes similar products with cheap materials. By this strategy of Zara, company lowers its selling price and uses cost leadership strategy.
Core Compentencies of Zara
1-Fast and Powerful Design Team
2-Fast fashion brand image
3-Quick Production Process
4-Frequent new products
5-Low cost
Business Strategy of ZARA

Zara was described by Louis Vuitton fashion director Daniel Piette as “ possibly the most innovative and devastating retailer in the world.”
“Spanish success story “ CNN.

Low quality
Minimal advertisement
Low in store inventory

CONS
Full transcript