Passion For Fashion

ZARA

Presented By: Eva (Yihui Yan), Sylvia (Fei Gao), Emma(Hanul Yang)

ZARA History and SWOT Analysis

Global Expansion and associated challenges

Industry Analysis and Competitors

Short –term and long-term Recommendations

Conclusion

ZARA

• Parent company : Inditex by Amancio Ortega • In 1975, first ZARA store in A Coruna, Spain• SPA brand, fast fashion, instant fashion• Line up – women, men, kids• In 1980, Zara started to expand globally• Unique supply chain• Zero advertising policy• 1,444 stores in 77 countries

SWOT Analysis Strengths

• Point-Of-Sales System send information products reflect quick feedback

• Unique Supply Chain 3 lines work separately designers + market experts send designs Zara factories produce • Accurate delivery use planes and trucks

• New products every two week• Make customers visit store more frequently • Prevent overused discount and sale• Get good reputation from viral marketing

Weaknesses• Can’t meet customers’ re-buying needs• Intense concentration on European markets • Low brand recognitions in certain markets

Opportunities• Potential markets• More online shops• Fast fashion market ; PRAV

Threats• What if some thing happens in Spain?• The continued rise of Fuel price• Newcomers with similar style

The Largest Clothing Retailer In the World

Zara Global Expansion

Global Segamentations of ZARA

14%

34%

29%

23%

Zara Global Expansion

• Global Expansion - International presences all over the world

• Europe - First : Porto, Portugal in 1980 - Second: France 1990 - Third: Belgium & Sweden 1994• North America - U.S 1989• South America - Mexico 1992• Asia - Tokyo, Japan 2004

• Now- Zara owns 1,444 stores worldwide in 77 countries.

Zara Global Expansion

Global Expansion Strategies

Standardized Global Marketing Lower the cost Offer standardized apparel Economies of scale

Vertical Integration [centralized approach] design produce distribute

large R&D group: > 200 people (designers + marketing experts + production managers)

Global Expansion Strategies

Zero Advertising Policy

0% - 0.3% of its

revenue in commercials

Use fashion shows &

posters instead

Internet Retailing Strategy

Divisions: (official web)

Woman/Man/TRF/Kids– Look book – Magazine – Catalogue

Zara in Emerging Markets

BRIC Brazil – 27 stores Second largest market in South America Russia – 37 stores, stores in Moscow, Saint Petersburg India – 3 stores (Delhi, Mumbai, Bengaluru) Joint-venture with Tata China – 60 stores Shanghai, 2006 Beijing, 2007

HK, 2004 Macau, 2007 Chengdu, 2010

0

10

20

30

40

50

60

Brazil Russia India China

Zara Stores in BRIC

Stores

27 37 3 60

Beijing, China

New York, U.S.Hamburg, Germany

Challenges

• The tightly controlled supply chain won’t fit every market, especially the foreign one.

• Different regions

have different understanding of fashion.

• Hard to implement

the whole business model due to joint venture ex: India

Chanllenges

• Fierce competition

- local: MNG (MANGO)

- global: Gap, H&M, Gucci

• Glommy Economy

(Financial Crisis, 2007-2010)

Shrinkage of the fashionable clothing sales

Industry Analysis

• Product of the modern age

• Developed first

in Europe and America

• Consists of four levels

1. the production of raw materials

2. the production of fashion goods

3. retail sales

4. advertising and promotion

Fashion Capitals Rankings

Zara, $9.55

billion

HM, $17.98 billion

GAP, $14.50 billion

Gucci, $3.06 billion

Renvenue in 2009

ZaraHMGAPGucci

Competitors

• spend more money on advertising.

• outsource all of their productions

• 0% - 0.3% of its revenues in advertising

• In Spain, Zara owns 22 factories, and 50% of its products are made by their own manufacturers.

VS

Competitors

• Luxury good: High-grade, luxurious, classic style

• Target market： Age: 25-40

• leather goods, shoes,

watches, perfume, household goods and pet supplies

• Fair price, fast fashion, low-cost

• Target market： Age: 18-35

mainly women and men,

kids clothing

VS

Competitors

• The largest clothing company in USA

• Focus on the Jeans and hoodies

• Casual, sport style

• Multi-Brands:

GAP, Banana Republic,

Old Navy

• The largest clothing retailer in the world, No.1 in Spanish Clothing Market

• Sweaters, T-shirt

• Relatively mature

• a subsidiary of Inditex

VS

Competitors

Short-term recommendations

Promotion activities

DIY – Design It Yourself!

More Online stores

Internet advertising

Long-term Recommendations

• Advertising- TV commercials- Advertisements on magazines- Activities ( involve customers)

• Differentiation- Offer sepcialized products uniquely designed for a certian culture/region

Long-term Recommendations

• Improve its logistics and build ECR system to react more quickly to changes in consumption patterns

• Locate more manufacturers and distribution

infrastructures in emerging countries

• Franchising

conclusion

▷ Challenges

• Tightly controlled

supply chain• Different fashion concepts• Competitors• Gloomy economy

▷ Recommendations

• Advertising• Online shops • Various promotions• Improve logistics • ECR system• Building infrastructures

in emerging markets• Franchising

▷ Global Locations:

1,444 stores in 77 countries