There is a foreign clothing retail brand (for e.g.
ZARA, NEXT, PRIMARK etc.) that is planning to start its operations in Pakistan.
This information will be used by Board members in a meeting where they will
look into stakeholder, national and global environments and the effect it has
on business and will decide their future direction.
a mission statement, vision, goals and objectives for your clothing retail
brand. Keep in mind the above scenario while designing the objectives for the
firm. (Pre-submission: 30/04/13)
MISSION STATEMENT OF ZARA:
The mission statement of ZARA is about that “ZARA
walks at the pace of society, dressing ideas, trends and tastes that society
itself has matured.”
The vision statement of the ZARA is “to give the
customer an exclusive choice of fashion by providing a quicker turnover of new
stock than other fashion retailers”.
Goals of the ZARA are mentioned as;
wants to create a community around brand while allowing individuals to feel
connected to ZARA fashion and values.
through its unique business models and stores has proved its business can be
successful with little or no advertising.
always innovative their products to enhance shopping experience and provide new
designs at affordable costs made from quality materials which follow latest
as a foreign clothing brand retail brands wants to start a successful
operations in Pakistan in December 2013.
will decide their future direction while look into stakeholder, national and
global environments and the effect it has on business.
wants to develop a consumer focused product line and marketing strategy.
wants to reinforce customer focus as the key driver of the ZARA brand.
should focus on increasing potential consumers and frequency of current
Conduct an environmental and organizational audit
(resource audit) for the firm. Perform PESTLE, Porter five forces, and resource
audit for the firm.
Power of Suppliers:
The bargaining powers of suppliers of ZARA are such
Its computer controlled the cutting
machine which cuts up to 1000 layers at a time. It then sends the cut materials
to suppliers who sew the pieces together. The suppliers work is relatively
simple and many suppliers can do the swing.
the pool of suppliers is expanded and Zara has greater flexibility in choosing
the sewing companies.
Further s because Zara dyes 50% of the fabric
in its plant, it is less dependent on suppliers and can respond more quickly to
mid season changes in customer color preferences.
of Substitute Products:
The threats of substitute products of the ZARA are
Zara forces on meeting customer
preferences for trendy, low cost fashion. It has the highest sales per square
foot of any of its competitor.
It does so with virtually no advertising and
only 10% of stock is unsold.
It keeps the inventory levels very low
and offer new products at an amazing pace for the industry.
Zara has extremely efficient
manufacturing and distribution operations.
The Threats from substitutes such as new
fashion designs of ZARA are controlled through offering all range of clothing
and customer loyalty.
Further it has bring online trading it
is noted that the competition is low than in other industries.
of New Entrants:
The threats of New
Entrants of the ZARA are given below;
The ZARA IT supports is strongly join
group of designers, market specialists, production managers and production
planners so the New entrants are unlikely to provide IT to support
relationships that have been built over time.
Further it has rich information about
customers that would be hard to imitate.
Power of Buyers:
The bargaining power of
buyers of Zara are such that;
Zara boasts more than 11000 new designs a year
where as competitors typically offer only 2000 to 4000.
Further because of the low inventory
that the Zara stores stock, the regulars buy products they like when they see
them because they are likely to be gone the next time they visit the store.
More recently Zara has employed laser
technology to measure 10,000 women volunteers so that it can add the measurements
of real customers into its information storage.
This means that the new products will be more likely to fit Zara
Since the ZARA Company offers new and fashionable
products the bargaining power of the customer is low.
Among Existing Customers:
The ZARA Company faces severe competition from
competitors such as M&E, GAP. Due to the low growth in the fashion industry
in Europe this competition has become more severe. So there are two kinds of
competitors existing among the customer that is Global competitor and local
The political factors have also affected the ZARA
Company. Some Political factors are given below;
Reduce of restriction of import quotes
to Europe and USA
civil unrest in the middle east region
trade policy in European union
Import tariff are four times high when goods
are imported from developing countries to developed countries.
The Economical impact of the ZARA is such as that
the ZARA should have to reduce the following;
The higher borrowing cost and the
financial crisis exist in the European region.
With increase in the interest rates the
inflation will increase and buying power of the customer will decrease.
Increase of fuel prices due to the civil
unrest in Middle East may increase the transport cost and affect to margins of
The culture around the ZARA business is so modern
and the consumers are also updated. So it is a competition market but it is
very easy to launch the new product in the market.
The ZARA would have to work accordingly
to the trend and satisfy customers demand due to changes in the generation
New trend among younger generation in
Europe and USA for fashion.
Low growth in the population in Europe.
ZARA is base on the use of technology from the year
1970. So ZARA have the following technology;
with the change.
in time manufacturing system.
tech distribution system.
Computer Aided Designs
CAD & Auto CAM
The Group environmental commitments of Zara have a
direct impact on their shop, products and policies. So they have to improve the
following things include as;
High demand for environmental friendly
Effect of global climate to organic
Attention of areas such as sustainable
footprint of the company.
The Legal Factors of the ZARA is given below;
Laws and regulation relating to fashion
Child labor and rules and regulations
relating to labors.
of the ZARA:
in 77 countries
selling area: 488,400meter/squares
capital: 1050 million (Euros)
92,301 from more than 140 nationalities
Brand: is amongst the three
most recognized brands in spain.
Image: ZARA is a fast fashion
Economic goodwill: Excellent reputation in quality and
Apply SWOT, Ansoff and BCG matrix
techniques to define the strategic position of the given organization.
ANALYSIS OF ZARA:
systematization of Product Process.
to recreate fashion
turnover of Product.
use of Stores.
Sales of Out of Stock
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