Transcript: Perceived risk in new zealand Zara What country to choose? Zara expansion Use of joint ventures with local businesses such as HallensteinGlasson or Max. LEGAL: -Supportive and productive rules for businesses -Lack of Adherence ENVIRONMENTAL: -Poor environmental conditions (Waste control and disposal, noise population) PESTLE analysis PESTLE analysis At first glance, which one of these three countries do you think is the best for Zara ? PESTLE analysis New Zealand Political: - Stable government (Monarchy) - Free Trade agreement with Spain Australia-New Zealand common market - Member of the UN, commonwealth, OECD and Asia-Pacific Economic cooperation - National industry policies promoting creative talent - Favorable regulatory conditions Economical: - Recovering financial crisis and the 2010 and 2011 Christchurch earthquakes - Unemployment rate 6.8% - Clothing retail stores = 11.9% of total NZ retail market - Negative impact of internet retailing (7% of total retail sales in 2013) Standardized products with a very few local customization to supply a global demand for casual and classic clothes. (Adaptation to climate seasonal clothing) High pressure on costs Need of economy of scale and learnings effects PESTLE analysis Nigeria Additional factors for success: Zara: world leader in fast-fashion Adapted Uppsala Model POLITICAL: -Largely Influenced by government policies -The Taxation system is well developed. -Import Prohibitions ECONOMICAL: -Economy Stability -Encouragement to Foreign investors -Potential growth -Inadequacy of utilities Part on Inditex group Founded in 1963 by Amanci Ortea Gaona In 82 countries Net profit: $2.68 billion Affordable priced and good quality products Target market: aged 18 to 40 years, mid-range incomes, interested in fashion trends Additional facts about why it will be a great success? High risk PESTLE analysis New Zealand entry strategy Approach is similar to Upsala's one, thanks to depth market knowledge acquired in neighboring country such as Australia. We are focusing on three countries PESTLE analysis Low risk Social: - Aging population (13.4% over 65) - Birth rate declining (2.1 children per woman) - Increase in Asian immigrants - E shopping is changing consumers’ purchasing behavior Techonological: - 85% of households have internet access - Whole new range of smartphone applications impacting the fashion market (online payments, peer reviews, etc.) SOCIAL: -Increasing Population -Cultural events -Westernized culture TECHNOLOGICAL: _Insufficient technological know how New Zealand Pauline Lucas, Akintunde Amusa, Thomas Mestre PESTLE analysis Paraguay Social: - 60 % of the total population is 15-54 years old -62% urban population -unemployment within 15-24 : 11.2% - Median age : 26.8 years - 1/3 of the total population is in Asuncion (capital) Technological: - 6.79 million mobile phone lines in 2012 (99,4% of the total pop) - Fixe line provider Copaco is known for inefficiency and overstaffing - Only 37% of individuals use internet (ITU) Political: - Member of MERCOSUR (with Brazil and Argentina - Increasing political stability - National plan against corruption and illegal activities -Political efforts to increase administrations efficiency Economical: - Economical plan in vigor in 2014 (borders transformations, new industrial areas, Digital transformation) - New simple administrative system for business - Unemployement rate : 5,8 % (international monetary fund) -"Messiteros" tradition Nigeria Paraguay Legal: - Consumer laws – Labelling Country of Origin required - Fair Trading and Consumers Guarantees Act - Large range of Employment laws in place Environmental: - Carbon Emissions Trading Scheme in place since 2008 (forestry, energy, industry and waste) Stage model for internationalization Oil stain model when moving to a new country Use of own subsidiaries, joint ventures and franchising. More than 50% production in Europe Legal: - Border protection : tariffs are the same as others MERCOSUR members. - Legal framework not trust by the population as a consequence of the corruption in Paraguay Environmental: - An important part of the country is forest, as a consequence, most recent environmental measures as such as "0 deforestation plan" or "anti fire" plans. - creation of "Política Ambiental de Estado" New national environmental plan Zara strategies A Global Standardization Strategy Normally, upsala is more for small firms. But Zara is using a similar process at a greater level, that can be called "stage model" PESTLE Analysis - Zara will be one of the first "world-brand" to enter NZ market knowing that other giants such as H&M, Topshop and Uniqlo are also thinking about it. First mover advantage - We can rely on Zara's success in Australia: within first minutes of the opening in Sydney, 80% of the stock had been sold ($1.2 million). And Zara has already opened other stores accross Australia - NZ official language is English: easier communication processes and standard
Transcript: Competitive Market: ZARA is a Spanish Clothing and Accessories retailer based in Arteixo, Galicia. It was founded in 1975 by Amancio Ortega and Rosalia Mera, the former being the richest man in the world of 2016. SWOT ANALYSIS AND Weakness: High labor cost in various countries Intense competition Diversified Market Share Fast Fashion: Fast delivery affordable Price, Latest fashion trends (Fashion imitator) Strong Supply Chain Strategic Location: Close to Luxury Brands (Ex., VR Surat) It has 1,808 Stores in 88 countries. With the motto of spending less on advertising and more on selecting a prime location, ZARA has been a Marketing pioneer and never fails to maintain it's level of sophistication. Quality: Differs from America between China Expand Market Reach Diversify Market Segments Improve online Marketing All about your favorite brand Opportunity: Threats: Strengths: What makes it stand out of the crowd? Prime Location with Organised Shelves. Presented by: Priyanka Ahuja Shubham Bansal Sagar Chawla Yash Jain
Transcript: The similarities between Zara and Louis can be attributed to fast fashion's manipulation of their marketing mix strategies to be similar to prestigious luxury brands. Such as limited edition pieces or lines, and collaborations with high end designers. Zara wants to appear special in the same way Louis Vuitton does, but at a much more fast paced and cheap way. Zara started adjusting their manufacturing process as early as the 1980's. Their goal was to jump onto new trends as quickly as possible. Zara and Louis Vuitton Zara today Zara has clothing and accessories. They try to offer their customers with as many options as possible. In today's Zara stores a customer can go into their store and find everything they need for a complete wardrobe. Their customer could hypothetically only shop at Zara for their wardrobe and have everything they would ever need. Zara Today Cont. Today, Zara has grown into the world's largest fashion retailer. It is owned by the Inditex group. The Inditex group is also owned by Amancio Ortega (Spain's richest man, world's 3rd richest man) Pablo Isla is the current Chairman. The group designs, manufactures, and distributes all of their products themselves. Ortega Inditex Global Presence Change in the marketplace cont Zara is a spanish brand that was founded in 1975 by Amancio Ortega and Rosalía Mera. It's first store was located in downtown La Coruña, Galicia, Spain. It was originally named Zorba, but there was a bar located nearby that had the same name. The signs were already made so they came up with Zara with the letters they had available. Zara continues to sore above their competitors and brings in billions in profit a year. They are considered the leader in creating "fast fashion" and the industry watches closely to see what they will do next. From the start Zara produced lower priced designs that looked intentionally similar to higher priced brands. This proved to be very profitable for the first Zara and they started opening more stores throughout Spain. In 1980 Zara began moving to Portugual and their international expansion only continued to grow after that, making their brand available in over 88 countries by the mid-1990's. Beginnings Beginnings cont. Zara in the middle, compared to Celine Change in the marketplace Zara Change in marketplace cont. Zara has also never relied on fashion shows to premier new lines like most did/do. They get new products in their stores twice a week. In the past this was unheard of and still is to a degree. Zara is way ahead of it's competitors, in that they produce around 11,000 unique designs a year, while their competitors only produce around 2,000-3,000 a year at the most. What's interesting is that Zara's competitors followed Zara's example, yet still cannot come close to touching them. Even with Zara's higher price point than some competitors, like H&M for example. It takes them around 4-5 weeks to test and produce new designs. Very very fast in the industry. Zara Today Cont. As mentioned about the Inditex Group, Zara designs, manufatures, and distributes all of their products themselves. It is not completley common to find a company that does not outsource at least one of those jobs. Since Zara does everything themselves they have a very high control over what products they sell. Zara is considered a pioneer among the "fast fashion" industry. They are the leaders in what occurs in that market. Zara made a great change when they decided not to rely on advertising because they would rather use that money to open new stores. Beginnings Cont. Louis Vuitton fashion director Daniel Piette once described Zara as "possibly the most innovative and devastating retailer in the world." Zara is a threat to Louis Vuitton and those like it because Zara creates easy fashionable designs that give the look of luxury without paying the price tag. One no longer has to buy exclusively luxury to get the look in fashion ads. This creates less of a need to buy all Louis Vuitton products for example, if the customer wants a certain look. Zara tries to create a luxury appeal to their customers, just as Louis Vuitton does. This has added to the popularity of mixing fast fashion with luxury, as mentioned, instead of buying more luxury. Like a full Zara outfit with a Louis bag or shoes. The need for things like Louis Vuitton has dropped with Zara's popularity. There are over 2,000 Zara stores in over 88 countries today. They also offer online shopping that began in 2010. They aim to have their stores look very high end and modern. They offer Womens, mens, and children clothing. As well as some "home" products at certain locations. Zara and Louis Vuitton cont. Example of a simple Zara Campaign
Transcript: ZARA Zara’s international operations and business strategy By Aleksandra Boliglowa Katarzyna Misiarz Kexin Xie Lin Wu Learning objectives To present a company’s competitive advantages in terms of its operations management To analyse the company’s responsiveness to globalization To identify main issues within the company’s operation management that affect or may affect the company in the future To propose possible solutions to the problems that company experiences or may experience “Fashion will last forever. It will exist always. It will exist in its own way in each era’’ (Alaia, 2011) What does Zara do? High-fashion clothing for middle-class urban women, men and children (Inditex , 2011) Were Zara does it? Zara operates in 78 countries network of 1.557 stores in upscale locations in the world's largest cities. Zara’s MISSION ‘Zara is in tune with its customers, who help it give shape to the ideas, trends and tastes developing in the world.’(Inditex, 2011) Zara’s key advantageous of its business strategy Vertically integrated business model (Harrigan, 1986) Production- ‘in house’ production allows to be flexible in the variety, amount and frequency of the styles they produce (Craig et al, 2004) Inventory management (Caro, 2009) Centralized distribution facility- cost effective, minimalized lead time, increased delivery speed (Palladino, 2010) 1.Short lead time High costs of logistics (Heard and Plossl, 1984) High cost of technology equipment also product control system(Slack et al , 2010) Risk of poor quality products(Songini, 2001) No room for future expansion 2.Centralization of the business (Dornier, 1998) Lack of prospects for further expansion of business overseas Zara is able to supply only limited amount of stores in US and Japan not able to produce large quantities Our recommendation To open a new distribution centre overseas Zara will be able to maintain the short lead time also logistics costs will decrease Volume of production will be smaller that provides the company with more time for quality checks To outsource a professional IT specialists who can provide more efficient solutions To invest in training their own staff to use IT systems Once new distribution centre is opened, Zara can easily implement more advanced IT systems 4. Zara’s strategy concentrated mainly to target European market (Allwood, et al, 2006) Zara relies heavily on European customers. Standardization of products- Zara is unable to implement their fashion designs overseas Our recommendation... To employ people from different backgrounds in order to help with the market research Product design in relation to the fashion differences in different countries. (Roy, 2010) SUMMARY Zara has a successful business model that provides the company with competitive advantage. However: the increasing market demands may lead the company to further IT investments (that will be more responsive to the global environment) Zara has to focus on global expansion in order to maintain a sustainable business Before we finish..... MERRY CHRISTMAS!!! Issues related to their business strategy: We recommend... Thank you for listening ANY QUESTIONS WELCOME!!! 3. High reliance on technology (McAfee et al, 2004) Using POS system (Microsoft DOS) Zara’s technology is not up to date compared with the rivals. High costs to change over the operating system. Operations in Zara are maintained by their own team of IT specialists
Transcript: Background Market segmentation SWOT Background Market segmentation SWOT analysis n Thank you for your attention! Geographic segmentation: • Europe • Asia-Pacific • Americas • Africa Where ever you go the clothing lines are the same • Zara is a spanish clothing retailer founded in 1975 by Amancio Ortega and Rosalia Mera. • The headquarter is in Arteixo, Galicia. • Zara's Unique Selling Proposition (USP) is to create or imitate the latest trends within a short two-week period; • Zara strategy policy is ‘zero advertising’. Background • That needs to buy low priced clothing with good quality. • That likes to change their fashion constantly or on a weekly basis. • Need an alternative from Zara’s competitors like H&M and Mango • Easy located shop and accessible in city centers. • Like to shop on end season sales for the clothes they couldn’t buy. • Choose from multiple fashion selections and categories (sports, casual, formal wear) • Online market • Found in 88 countries around the world (easy to access Zara no matter where you are whether in travel or in your local city) SWOT Psychographics: Teenagers: Demographics Gender: Teenagers (boys & girls) Ages: From (16-30)
Transcript: BOOK REPORT MACBETH About Author INFO ABOUT SHAKESPEARE Author WILLIAM SHAKESPEARE William Shakespeare was born on April , He was an English poet,playwright and actor.He is widely regarded as the greatest writer in the English Language and the worlds greatest dramatist.He is often called England's national poet and the 'Bard of Avon'.He died on April 23  in Stratford-upon-Avon. Works SHAKESPEARE'S WORKS. William Shakespeare wrote many novels example:Macbeth,Julius Caesar,Hamlet,Romeo and Juliet etc.He also wrote many poems example: The Tempest,All The World's A Stage etc. IF MUSIC BE THE FOOD OF LOVE , PLAY ON!! Main Characters MAIN CHARACTERS Macbeth is a brave general and the protagnist of the novel .Because of his evil wife Lady Macbeth he goes to the wrong path. MACBETH King Duncan is a fictional character in the novel.He is the father of two youthful sons ,Malcolm and Donalbain.He was murdered by his trusted general Macbeth. KING DUNCAN Lady Macbeth is a leading character in the novel.She is the ambitious wife of Macbeth and is a very greedy person who doesn't think of someone other than her ownself. LADY MACBETH summary and characters A brave Scottish general named Macbeth,recives a prophecy from the trio of witches that one day he will became the King of Scotland . consumed by ambition and spurred to action by his wife,Macbeth murders King Duncan and takes the Scottish throne for himself .He is then wracked with guilt and paranoia. SUMMARY BANQUO Banquo is Macbeth's brave and noblest friend as well as his second victum.He is the brave noble general whose children according to the witches prophecy will inherit the Scottish throne and he was murdered by Macbeth. BANQUO MACDUFF Macduff was the Thane of Fife,He is a legendary hero and play a pivotal role in the novel. Macduff kills Macbeth in the final act. his wife name is Lady Macduff who is murdered by Macbeth. MACDUFF MALCOLM Malcolm is the eldest son of King Duncan of Scotland,He has a brother named Donalbain.He immediatly leaves Scotland after his father's death. Malcolm Review BOOK REVIEW YOUR OPINION Your Opinion In my Opinion,This book contains a moral for every person who came into this world and the author of this book is trying to tell us that power, money and greed can only make our life miserable and nothing else so we should try to be happy in every moment of your life.#STAY HAPPY #CHANGE YOUR LIFE.
Transcript: Uses distribution centres – “fast fashion” Highly automated Little need for human labour Provides a quick delivery of goods to the consumers Emphasis on Logistics Warehouse - Computerised system Increase in costs because of a higher turnover of clothes Lack of Sales and discounts Miss out on extra sales Expansion could result in loss of focus & slow down the fast pace Retail Outlets - In 70 countries with over 2,900 stores The Logistics Chain Consumer 1. Two weeks from design to sale - flexibility with changing trends Marketing Speed has paid off for 8400 stores in 85 countries and growing Overall sales of €13.8 billion per year €2 billion profits per year 37th best global brand according to Interbrand Transportation Affects pricing, delivery performance and the condition of goods upon arrival - Highly flexible - Efficient for short- hauls - Ideal when speed is necessary - Reaches long distance markets - Reduces inventory levels - Reduces packaging costs - Reduces need for warehousing Zara’s Supply Chain Customer satisfaction vs. Minimum Costs Logistics functions Unique supply chain Administered VMS Marketing channel reduces conflict Number one fast-fashion brand Value added through sufficient logistics 2005 “Active collaboration” with MIT researchers Development of mathematical model Focus on better stock allocation Addressed the world of “fast fashion” Increased sales 3-4% Disadvantages of Fast Fashion Types of Vertical Marketing -Corporate -Contractual -Administered Zara’s key to success Customer service and satisfaction Powerful competitive advantage Huge cost savings Product variety IT developments Any Questions? Unique in sourcing goods Designs set to local cooperatives for sewing Completed in Zara’s facilities Nicole Kehoe 09403523 Brian Kelleher 09417711 Ross Moylan 09610162 David Regan 09374370 Ronan Yeates 09377212 Textile Production - Sewing, Ironing, Wrapping - "Moving in a dynamic environment“ Quick response is one of the pillars of our success.” Customer-centred logistics thinking preferred by today’s marketers Zero- advertising strategy Advantages of Fast Fashion “Zara – The fast and furious giant of fashion.” “providing a targeted level of customer satisfaction at the least cost”. Fast turnaround High quality clothes Limited availability Trends addressed immediately Low prices Employees How does Zara’s marketing system reduce conflict? High level of control – all channel members share a common goal Information system – allows for easy flow of communication, connecting different channel members. Organizational structure – 3 parallel but operationally distinct lines - flat Raw Materials - Cotton Too much too fast? The Zara brand and Inditex Group are rapidly growing In China from July to November Inditex opened 61 new stores Almost 400 new Inditex stores each year Headquarters and important factories in A Coruña, Spain 200 designers in the midst of the production process What is Channel Conflict? Situation when a producer or supplier bypasses the normal channel of distribution and sells directly to the end user. Selling over the internet while maintaining a physical distribution network is an example of channel conflict Horizontal conflict is when the disagreement is between channel members at the same level e.g two different Centra stores. Vertical conflict is when the disagreement is between channel members at different levels e.g Peugeot car dealership. Examples of Conflict in Zara Vertical – use of sweatshops by a supplier in Brazil Horizontal – conflict between some of the 250 sewing subcontractors To Conclude.. The benefits of it's vertical marketing tactics have led to expansion in Europe. Began cautiously in US New global store concept opened in March on Fifth Avenue, NYC “Value Added?” 2. Large number of units - formidable high street presence 3. Creates an exclusive brand, merchandise only available for a short window of time 4. Encourages repeat visits from customers -Buy it now or miss out! Mathematical Retail Model What is Vertical Marketing? Focus on customer instead of marketing 5 elements -Store location -Store window -Store image -Good display -Customer service Maximum customer satisfaction: Rapid delivery Large inventories Minimum Cost: Slower delivery Smaller inventories Large shipping lots What is Fast Fashion? Distribution - Trucks/Cargo Jet Group 20 Thursday 11:00 – 13:00 Zara is a Spanish clothing and accessories line that was founded in 1975. During the 1980s Zara began to change the design, manufacturing and distribution process in a bid to be able to react to trends before any other high street store. Zara boast that they can develop a new product and have it on shelves worldwide, in just two weeks. “Possibly the most innovative and devastating retailer in the world.” "Spanish success story"
Transcript: R about Compare the business model to its competitors... How can Zara gain competetive advantage through SCM? Improvements for the Future... Where is volatility/fluctuation in the textile and apparel industry? How does Zara handle volatility/fluctuation? Zara can design, produce and deliver new garment and put it on display in its stores worldwide in a mere 15 days. How is this possible? Why is Zara more and more using outsourcing? What are the key issues for Zara to decide what to make internally and what to make from outside suppliers? ZARA Business Model Vertical integration In-house production Control Flexibility Efficient Distribution Model Internal Communication System Short Lead-time Fast response to Market Demand Variety of items Small batches High Skilled Workforce & Independent Foreign Suppliers Int Production Culture IT TECHNOLOGY Bargain Power Low Costs Focus Expansion Strategy Flexible Capital Sustained profit Control competetive advantage flexibility and creating of scarcity Freshness Top location few advertisement low level of inventory Improvements Cooperation with any channel of production over the world -> so new improvements in operation technology can be applied into Zara instead of keep using the old ones More advertising -> advertising might be important in the future when competitors are becomming more competetive and demands are declining Cooperation with vary range of designers -> can maintain ist competetive advantage to be the fast fashion Making more distributions centers -> they will enable Zara to be more faster, effective and efficient in distributing their products to the retailers Zara keeps almost half of its production in-house. Zara puts price tags on items before they’re shipped and tolerates, even encourages, occasional stock-outs Zara can design, produce and deliver new garment and put it on display in its stores worldwide in a mere 15 days. How is this possible? 3 Principles of End-to-End control of the supply chain, which is enabled by In-House production. An integrated organization without bureaucracy where the communication can flow easier. Advantages of In-House Production Shorter lead-times and ability to respond fast Control over schedules and capacities Reduction of risk and uncertainty regarding independent suppliers How does Zara use IT and communication Technology in their Supply Chain? ZARA has more than 1,600 shops worldwide. ZARA utilizes human intelligence (from store managers and market research) and information technology in order to have a hybrid model for information flow from stores to headquarters. IT improvement measures THANK YOU for staying How does Zara handle volatility/fluctuation? HTTP & HTTPS hybrid model for information flow from stores to headquarters A DB Inventory Control Norbert End-to-End control of the supply chain, which is enabled by In-House production. "regular customs know that new products are introduced every two weeks and would not be available tomorrow" PART 4 Quick decisions Consumer confidence and spending rates fluctuate month to month. Production Outsourcing is dedicated to low-cost basic clothes Group of Commercials Product Managers Presented by Zara can design, produce and deliver new garnement and put it on display in it´s stores worldwide in a mere 15 days. How is this possible? Information Flow Regional Headquarter ZARA´s 200 person designer team produce about 12,000 different Designs a year. ZARA can keep costs down by keeping stocks low. ZARA´s throughput time of a product to 3-4 weeks from design to distribution. Part 2 "fast production and distribution offer the latest fashion" „Instant Fashion“ THANK YOU for staying Zara produced in 2000 44% in-house. Why is this percentage so high? culture Outsourcing ZARA can keep costs down by keeping stocks low. A Store Employee Consumer confidence and spending rates fluctuate month to month. Production Improvements for the future... EVA Outsourcing is a way to decrease costs Using of the same suppliers (which originates from the in-house business-model) Suppliers have to be in accordance to code of conduct (no forced labour, no child labour, no discrimination, safe working conditions, wages are paid, environmental awareness, etc.) Outsurcing is dedicated to low-cost basic clothes Their competitors spend on average 2% of total revenue on IT and have 2.5% of their total workforce devoted to IT. Part 1 Logistic Inventory Reduce the risk of uncertainty regarding independent suppliers (e.g. child labour) How does Zara use IT and communication Technology in their Supply Chain? Store Manager DB Inventory Microsoft DOS Disk Operating System A HQ regional managers collect and analyse the feedback. Team sits with designers to use the information to create new lines and tweak existing ones-deciding with the commercial team on the fabric, cut, and price points of a new garment. Describe the business model of Zara... Store POS Group of Commercials Product Managers Store Manager Int
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