Zara History And Background Commerce Essay

Zara memorial And Background Commerce EssayThe middle-aged mothers buy dresses at Zara chain because theyre discounted, while the generation aged in the mid-20s buys Zara clothes because its manner suitable. Obviously, Zara has operose retail shops, low price, being in fashion. Zara was and still an interesting case study for lots of other retailers and fashion traders in the world.Zara History and BackgroundThe founder of Zara, Amanico Ortega, opened his first Zara in 1975 in Central Street in downtown of Spain. The first store take ind is low-priced and give ear like popular products, higher clothing fashion. The shop proved to be success, and Amanico began opening more Zara shops in Spain. During 1980 Ortega started to change the designs, producing and the distribution process to reduce times and respond to sunrise(prenominal) trends rapidly, in what he known as (Instant Fashions). Zara built its improvements after developing its information technologies in fashion field an d theyre using groups of fashion designers instead of individual ones.In 1980 Zara started international expansion through Porto. In 1989, Zara entered France and United States in 1990. International expansion increased in Mexico 1993, Greece 1995, Sweden and Belgium 1995, till get over 70 countries by 2001. Zara runs 500 shops around the world and all the shops are company owned.Zara is one of the international retailer that manufactures, designs and sells clothing, accessories and footwear for men, women aged 15 to 45 and children. Zara is one of the leading internationalized retailers, (Zara ,Massimo Dutti ,Pull Bear ,Bershka)Zara company controls the supply chain and designing. Zara built its own manufactory and they established barter model, called JIT system.Zara could design new products and accomplished goods in 4 to 5 weeks, also can modify the existing products in as little as 2 weeks. If any design does not sell good in a week, it will be withdrawn from all shops, ad ded orders will be canceled and new design will be move as shortening products life cycle means better success in customer preferences. Besides, Zara has a series of standard designs that is coming over all(prenominal) year.Zara is also becoming the worlds leading fashion company and its brand has exceeded expectations. As they have strong design team.Zara Business modelZara business models can be divided into three components Value drivers, capabilities and concept. Zara concept is maintaining design, producing that will allow Zara to react rapidly to changes in customer demands.SOWT ANALISYIS ZARAAnalysis is strategic supply method used to evaluate the Strength, Weaknesses, Opportunities and Treats .Zara market strategy is very effective.Strengths1) Normally, retails industries take about 3 to 5 months to obtain new seasonal fashion collection. Zara is able to distribute products within 2 weeks to the customers, because goods are moving rapidly through Zara shops, buyers worry to buy a product that it might no longer be available other time.2) 70 countries with 500 shops positioned in the best shopping center, More than 350 cities in Americas, Europe, Africa and Asia.Weakness1) Zara is different than its competitors such as Benetton and Gap, doesnt use Asia outsources. 70% of Zaras controlled facilities in Galicia of Spain. The competitors of Zara have outsources to low-cost Asian countries such as china for low cost labor and production2) Zara spends 0.3% of total incomes on marketing and advertising. This concept is lesser than its competitors which their average spend 3-4% on advertisingOpportunities1) Zara Company concentrates in strategy on the close cooperation with customer by use the new technologies, such as on field shopping2) Zara competitors, such as Gap and Benetton, but the key of success of Zara is more fashionable and the price is lessThreats1) Protection laws are 1 of the threats that Zara face in the potential market, disasters in the G alicia region of Spain and government instability.2) The profits will be affected if the oil price rises as periodic distributions and that will charges high cost transportation.Porters Five Forces ZARA1. RivalryTherere few fast-design fashion shops like Zara around the world as this unequalled feature allows Zara to get high profit without spending a lot of money on advertisements to reach the market share.2. Treat of new EntryProfitability and unique feature attract traders with investment to enter the fashion market. it could be very difficult to collect all the labor force needed in a short time. If traders want to enter this market, they should have sufficient time to be prepared.3. Supplier PowerZara and any fashion shops usually have weak provider power because of the purpose that their objective is to attract all potential buyers to buy their goods.4. Threat of SubstituteGenerally, fashion industries are very changeable in umteen existing competitors as they want to contr ol the next big tendency. However Zara is still different from other fashion shops in terms of creative designs and continual innovation.5. Buyer PowerTherere many people who have loyalty to Zara. Regardless of the brand name, Consumers purchase what they like.Segmentation Target market-ZaraWho is the customer?Zaras target consultation is youth, price awareness, and extremely sensitive to latest fashion designs. They have competitive advantage over old-fashioned retailers because they dont describe their target by segmenting lifestyles and ages giving them broader market.Zara segments their products line by women (60%), men (25%) and the fast growing children (15%).Targeting specific segment of the market, this could be a great strategy. Market segmentation is the process of targeting groups of consumers who have common needs. Therere many different ways to segment Markets such as segmenting products, segmenting service requirements, segmenting geographic locations demographic se gment, or segmenting lifestyles. To create successful segmentation, we need to understand what customers need, how customers decide among products, and how group of consumers demand different things,Zara targeted a wide-ranging gap in retail market as it targets consumers who interested in fast fashion to be updated with latest fashion designs. In order to target the market, Zaras strategy runs its shops in important locations and provides its customers with turnover time of 3 to 4 weeks for its new fashion collections. Besides, the strong brand name, the collection of fashion dresses, accessories and marketing campaigns which pulls target markets to Zara shops.