ZARA

Strategic Management (ZARA)

Introduction

At present, there is an increasing level of the competition due to the globalization and government free trades that create the hurdle for the firm to sustain in the market and to develop a good customer base.

Likewise, the changing need of the customers and the technology change are also the major issues that also create the challenge for the firm to sustain in the competitive market (Cornelissen, 2017). So, in order to mitigate these issues and to develop a good customer base, there are different ways and the techniques such as focus on the resources, capabilities and core competencies, etc that are used by the firms.

Zara is one of the leading clothing firms across the world and this firm is Spanish based firm. From last so many years, firm is continuously performing well because of providing the best quality products for the customers with latest fashion.

Because of this, this firm is the leading firm across the world (ZARA, 2017). Moreover, firm always considers the need of the customers and provides the products for the customers as per their need and the requirements. It makes a positive image of the firm in the market and the customers mind. The major focus of the firm is on the urban people and mostly on the women and due to this, there is huge demand of this firm across the world.

The main reason behind to get the success in the market by ZARA is the differentiation in the products. ZARA always provides the unique products for the customers that provide the competitive advantage for the firm in the market.

Industry attractiveness

Retail industry is one of the foremost industries across the globe because of lots of opportunities for the firm and the high consumption level of the people towards the retail products. At the same time, in retail, fashion industry is quite demandable and growing (Diderich, and Barker, 2010).

The reason in this is that there is a positive and changing view of the customers towards wear the clothes and people like to wear new and the fashionable products (Tricker, 2015).  Because of this, it can be stated that the positive view of the customers and the high demand of the clothes are the major point of the attraction of this industry.

Resources, capabilities and core competencies of ZARA

In order to get the success in the market and to perform better, all firms in the market especially in the fashion related firms are focusing on the resources, capabilities and core competencies. It helps the firm to get the competitive advantage and to perform better (Epstein, and Buhovac, 2014).

In the concern of ZARA, firm always has its major focus on its resources, capabilities and the core competencies.

Value Chain Model

ZARA always uses the value chain model in the better management of the resources. There are two types of activities like primary and support. In the primary activities, there are different aspects such as outbound logistics, inbound logistics, operations, sales and the marketing, etc whereas in the support activities, there are also some other aspects like human resources, management, technology and the procurement management, etc that are considered by the firm (Epstein, & Buhovac, 2014).

In the inbound logistics, the major focus of the firm is to use the good raw material in the all production process and for this; there are different countries such as Portugal, China, etc in order to get the best fabric clothes and material. At the same time, firm also tries to provide the right products for the right customers and for this, just in time approach is also used by the firm.

The use of just in time approach helps the firm to target the customers on time and to address the need of the customers on time effectively (García-Álvarez,, 2015). In addition with this, in the outbound logistics, firm deliver the products for the large distributors as well as for the all local retailers. It helps the firm to target the customers and to develop a large customer base.

Although the use of available resources is better for the firm to target the customers but at the same time, there is no contribution of the firm in the advertising and the promotion that is also a big issues for the firm in the strategic management.

But, have the quality in the products is the major best way that assists the firm to survive in the market and target the customers. Moreover, in service, ZARA believes on the quick service process and that is why there are different locations from where ZARA operates the business and use its resources capability (Hollensen, 2015).

In the use of the resources, there is also a vital role of the human resources department of the firm. The reason in this is that there are different aspects like sales, marketing, manufacturing, distribution, etc that are highly considered by the HRM department.

It assists the firm to have the better use of the resources and to have a better control on the existing resources (Rothaermel, 2015). So, it can be stated that the better use of the existing resources and the effective capabilities make possible for the firm to sustain in the market and to develop a good customer base.

Core Competency

ZARA

 

Threshold ResourcesDistinctive Resources

 

Threshold CompetencesDistinctive Competences
Raw MaterialsMass productionDeal with increasing trend and provide better and effective productsQuick response for the customer
InfrastructureUse of advance technologyHuge distribution channelProducts design is unique and attractive
Plant & machineryTrained and skilled employeesFast delivery (ZARA, 2017)Limited inventory stock
Retail Outlets  Effective and useful supply chain (Sargeant, and Jay, 2014)
Capital  Various variety in the products

The above table shows the core competency of the firm that make popular the firm and also helps to get the additional advantage in the market. From the above table, it can also be stated that there are different things from where firm is also facing so many issues but at the same time, better use of the existing resources makes easy the firm to sustain in the market and to develop a unique image in the customer mind.

Competitive Advantages

As, there are different ways that are used by the firm to get the competitive advantage in the market and to develop a base of the customers so ZARA also uses different ways and the techniques that provide the competitive advantage for the firm.

In this, providing the unique and fashionable products for the customers is one of the major ways that is used by the firm to get the competitive advantage. It is because there are different firms that are exited and provide the products for the customers (Veseli et al., 2012).

So, in order to get the competitive advantage and make it differ from other competitors, firm always tries to use the best quality raw materials in the all products and always has its major focus in the new fashion. As a result of this, it can be stated that providing the unique and fashionable products is the major way that is used by ZARA to get the competitive advantage over the competitors.

In the same concern of this, the large infrastructure and the quick response to the customers are also the major ways that are also used by the firm to get the competitive advantage and to garb the market opportunities.

The reason in this is that the large infrastructure assists the firm to get the additional advantage in terms of increasing production and to target the customers, while the quick response for the customers helps the firm to make a positive view of the customers towards the firm and the products of the firm (Watt, 2013). Because of this, it can be stated that large infrastructure and the quick response are the effective ways for the firm to get the competitive advantages.

Additionally, use of effective marketing and strategic management practices also help the firm to target the customers and to develop a base of the customers. It is because the use of best marketing and business strategy and better implementation of the strategic management practices make easy the firm to operate the business across the globe and to minimise the business risks that can affect the business of the firm (Epstein, and Buhovac, 2014).

However, there are different issues related to the use of strategic management practices are faced by the firm but the effective use of resources made easy the firm to perform better and to get the competitive advantage.

Recommendation to Improve the Strategic Management in Zara

It is well-known fact that the sustainability and success of an organization depend on the effectiveness of the strategic management. The strategic management in the organization develops the competency and capability of the organization that in turn contribute to the sustainable development and growth of the organization (Hill et al., 2014).

Zara is one of the most leading organizations in the fashion industry over the world. It has large market share and the customers behave in a loyal manner towards the Zara brand. However, Zara faces marketing issues in the market. The lack of advertisement Zara has adopted the policy of the advertisement to do advertise twice in a year. Apart from this, the Zara did not effectively analyse the economic and political factors in the Argentina that led failure to the organization.

Apart from this, I adopted a tradition media for the advertisement (MBT, 2015). The wrong strategic decision leads ineffectiveness to the organization and failure to the organization. Therefore, Zara needs to improve its strategic management and strategic planning.

Zara can improve its strategic management by analysing the issues in depth and analysing the problem in different perspectives. The company should consider the nature of the operation of business, objectives, and mission, and priority of the business while developing strategies. The strategy should include the different elements such as vision, mission, objectives, policies, tactics, and programs.

Therefore, the management of Zara can improve its strategies if it considers all these elements while developing long terms strategies (Dye and Sibony, 2017). The management adopted traditional media of advertising and do advertising twice in a year that affects the market of the company. Therefore, Zara needs to focus on the research and development activities to be updated with the trends and changes in the environment.

Apart from this, the Zara needs to improve its efficiency and effectiveness in assessing the external and internal environment effectively because the evaluation of the environment provides the detailed information of the market (Write pass, 2016). This analysis could help in matching the capabilities of the organization with the external environment that can support in developing strong strategies.

Apart from this, Zara needs to develop the culture of participative management. It is because participative management can help the management team of Zara in inviting the ideas and suggestion from the people in the organization. This can lead innovative ideas and strategies that might improve the strategic management of the company (Eden and Ackermann, 2013).

Apart from this, competitors are the rivalries of the company that has great influence on the company. Similarly, Zara experiences great competition from Marks and Spencer, Levis, and other brands. It needs to peek into the strategic management of the company and get the required and reliable information that might be used in the developing contradicting strategies to the competitors.

Eventually, the Zara needs to be market centric and buyer centric to achieve the success in the market (Rampton, 2017). This technique provides required information that the management can use while developing the strategies. This buyer centric information can improve the effectiveness of the strategic management.

Conclusion

From the above discussion, it can be concluded that ZARA is one of the leading retail fashion firm and well known in the firm due to the quality and the fashionable products. At the same time, it can also be summarized that there are different ways such as providing the unique and fashionable products, use the better marketing and business strategy, etc are the major ways that provide the competitive advantage for the firm.

References

Cornelissen, J. (2014) Corporate communication: A guide to theory and practice. UK: Sage.

Diderich, J. and Barker, B. (2010) H&M and Zara enter new markets. WWD, 199(115), pp. 4-8.

Dye, R. and Sibony, O. (2017) [Online] Available at:  How to improve strategic planning. Retrieved from http://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/how-to-improve-strategic-planning (Accessed: 24 August 2017).

Eden, C., & Ackermann, F. (2013) Making strategy: The journey of strategic management. USA: Sage.

Epstein, M. J. and Buhovac, A. R. (2014) Making sustainability work: Best practices in managing and measuring corporate social, environmental, and economic impacts. USA: Berrett-Koehler Publishers.

Epstein, M. J., & Buhovac, A. R. (2014) Making sustainability work: Best practices in managing and measuring corporate social, environmental, and economic impacts. USA: Berrett-Koehler Publishers.

García-Álvarez, M.T. (2015) Analysis of the effects of ICTs in knowledge management and innovation: The case of Zara Group. Computers in Human Behavior, 51, pp.994-1002.

Hill, C. W., Jones, G. R., & Schilling, M. A. (2014) Strategic management: theory: an integrated approach. USA: Cengage Learning.

Hollensen, S. (2015) Marketing management: A relationship approach. UK: Pearson Education.

MBT (2015) [Online] Available at:  Zara case study: Zaras Objectives, Strategies and Problems. http://www.markedbyteachers.com/as-and-a-level/business-studies/zara-case-study-zara-s-objectives-strategies-and-problems.html (Accessed: 24 August 2017)

Rampton, J. (2017) [Online] Available at:  7 Ways to Improve Your Content Marketing Strategy. https://www.entrepreneur.com/article/274622 (Accessed: 24 August 2017).

Rothaermel, F.T. (2015) Strategic management. USA: McGraw-Hill.

Sargeant, A. and Jay, E. (2014) Fundraising management: analysis, planning and practice. UK: Routledge.

Tricker, B. (2015) Corporate governance: Principles, policies, and practices. USA: Oxford University Press.

Veseli, N., Aziri, B., & Veseli, T. (2012) Are marketing strategies implemented by SME’s in the Republic of Macedonia?. Romanian Economic Journal, 15(46bis), pp. 137-152.

Watt, K.E. ed. (2013) Systems analysis in ecology. Netherlands: Elsevier.

Write pass (2016) [Online] Available at:   Strategic analysis of Zara. https://writepass.com/journal/2016/10/strategic-analysis-of-zara/ (Accessed: 24 August 2017).

Zara (2017) Available at: https://www.inditex.com/brands/zara_home (Accessed: 24 August 2017).

ZARA. (2017) [Online] Available at: http://www.zara.com/#utm_referrer=https%3A%2F%2Fwww.google.co.in%2F (Accessed: 24 August 2017).

 

 

 

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