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Published date
09/29/2010
Language
documents in English
Format
Word
Type
case study
Pages
9 pages
Level
General public
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E business : Zara

  1. News and operation of the market
    1. Current operation of the market
    2. Current problems of the market
  2. The model ZARA: vertical integration
    1. Presentation of the company
    2. The Zara system
  3. Strategy analysis of Zara
  4. Presentation of the main tools used by Zara

The market of Ready-to-wear has its origin in the 60s and it has created a revolution in the textile industry. Since the 70s, it has shown talent in Italian, English, Chinese and American clothing, and the 70s was also the beginning of internationalization of fashion. In our current society, fashion is in the heart of important economic issues, proof is that it represents now globally 900 billion Euros. According to figures from the World Trade Organization (WTO) , textile world trade in 2006 recorded a growth of 7%, measured in dollars. The intra-European trade amounted to 73.5 billion in 2006, an increase of 4% compared to 2005. China is the largest exporter of textiles, the country has a total share of 22.3% in exports. The global trade of clothing reached $311 billion in 2006, representing an increase of 12% compared to 2005. In their framework, all companies have to face the same problem: stick to fashion to satisfy a demand that is constantly renewing itself, and so, all companies adopt the same strategy of differentiation for itself. With competitors like Gap (US) or the Swedish H&M, Zara, a Spanish brand is attracting increasing attention. Therefore, how can Zara expand in a market with international competition? We will examine all the parameters of the sector in which is settled, the European company, Zara. Therefore, as a first step, we will examine the current functioning of the market, second observe Zara's functionning. And finally, we will analyze the company considering the various aspects of its environment, in particular, the adaptation of the strategy of Zara for the functioning of it's e-business.

[...] The first Zara store opened in 1975 in La Coruna (Spain), where the company Zara had its beginning and now serves as headquarters, and in 1989 in France, rues du Havre in Paris. Now, stores can be found in 68 countries and in the most important of more than 400 cities across Europe, Asia and Africa. Indeed, according the website of Zara, "there are no borders to prevent the sharing of a single fashion culture" and we can see that Zara has exported to South America, Asia, the Middle East and Africa. [...]


[...] In consequence, Zara sell of only 18% of production at the end of the season, approximately half of its competitors. These small quantities nonrenewable have two advantages: they create a sense of exclusivity to the client and force out Zara news continuously. This voluntary policy of under-supply Zara allows products to be both rare and trends. The multiplicity of the offer to renew its good quality and prices moderate face of its competitors, forcing customers to return regularly to see what's new and not miss them. [...]


[...] Therefore how can achieve Zara exploit themselves while expanding the company over time in a market tight by international competition? We will try to examine all the parameters of the sector in which is settled the European company Zara. Therefore, as a first step, we will examine the current functioning of the market, in a second time to observe Zara’s functionning. And finally, we will analyze the company considering the various aspects of its environment, in particular the adaptation of the strategy of Zara for the functioning of e-business. [...]

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