Group: Gabriela Loayza Ftima Cunalema Melissa Muoz Kattya Pozo

Zara Case Study Planeta Zara 1. Identify cultural factors (at least 4) in the case The main factor is the Creolization Zara implements in every country they open their stores, for example in Dubai when muslims have to pray they down the music but in Arab Saudi they close their store in that moment. Zara focus on the contact with the culture of that country, their specialization is the customer service because every person has its own preferences following a trend, so Zara wants to cover their needs. The work motivation is crucial in every Zara around the world, they teach their employees the way to communicate with clients, to highlight the most important clothes of the store Zara could be classified in the geocentrism orientation due to the integration of the costumes, trends and care of clients in every country with the policies of the company for example in Dubai or Arab Saudi women use Zara designs below their tunics(a mix of both trends) and about the mannequins first they did not have arms and heads but now they want to enter with a complete mannequin.

Zara uses Cost benefit analysis in almost their whole production, so their garments made are manufactured in developing countries such as Morocco, Peru and Thailand because they need that lower costs function but they gain a disadvantage that is the falsification of its clothes.

The management orientation of Zara focus on the own decisions of their stores directors, they have the possibilities to choose the clothes they consider they could be sold with success also the customer service is evaluate every day. For example in NY there is the Coordination Department to know in which positions they could put the clothes.

Group: Gabriela Loayza Ftima Cunalema Melissa Muoz Kattya Pozo

2. What political and legal forces may hinder/damage Zaras foreign operations?
Zara is increasingly becoming global as it opens a store each day and a half, has to evaluate and be careful with the legal and political system that is operated in the country of destination. The political system may hinder Zaras foreign operations is the totalitarianism because this system would not let Zara operate in its own way if not under the influence of the rule of man (the government control everything: the advertising, close the door to foreign investment, its market is not free), so its difficult to operate in countries that have those kind of systems. The theocratic law or customary law (types of legal system) may be cumbersome for Zara, for example in Dubai have another kind of trend and belief then it has been supplemented with the law and culture so when people pass praying by the store, it has to turn it down to music in order to show respect, is necessary and essential to know the type of legal system for not infringe and make it part of the company in that country.

3. Which economic factors can be applied to our current consumption society and might affect the companys development?

Here in our country there exist high index of inflation that may affect and increase the prices, but Zara applies economies of scale, this let the company reduce in a huge way their costs per raw material and production and as a result of this it also would bring benefit to our final customers offering prices according to our market purchasing power. As Zara is part of the group Inditex, they have their own manufacture company, where if implemented here they could give lots of work to people in our country, but also as here in Ecuador comparing to another countries (like India) labor costs are high, this would increase the price of final product.

Group: Gabriela Loayza Ftima Cunalema Melissa Muoz Kattya Pozo

4. Do the simple market penetration grid and draw out your conclusions.
Variables (A) Acceptable, (U) Unacceptable factors a. Allows 100 percent ownership b. Allows licensing to majority-owned subsidiary 2. Return (higher number=preferred rating) a. Size of investment needed b. Direct costs c. Tax rate d. Market Size, present e. Market Size 3-10 years f. Market Share, immediate potential, 0.2 years 1. g. Market share, 3-10 years Total 3. Risk (lower number=preferred rating) a. Market loss, 3-10 years (if no present penetration) b. Exchange problems c. Political-unrest potential d. Business laws, present e. Business laws, 3-10 years Total Weight New York Tokyo Dubai

A A

A A

A A

0-5 0-3 0-2 0-4 0-3 0-2 0-2

5 3 2 3 3 2 2 20

5 3 2 4 3 2 2 21

4 2 2 3 3 2 2 18

0-4 0-3 0-3 0-4 0-2

3 2 2 3 2 12

3 2 2 3 2 12

3 1 2 3 2 11

Zara does not advertise outside their stores only thing that reverses to showcase their clothing is in the display cases is therefore very important to consider the location of their premises. The way it enters markets

Group: Gabriela Loayza Ftima Cunalema Melissa Muoz Kattya Pozo

worldwide is adapting to the culture of each of the countries where it is placing a new store. The strategy used is to visit the shops in the area near where Zara is a store, see what people use to travel through the streets. The video is mentioned many times that Zara does not impose a fad, but they say that success is to sell clothes that people want, that's why Zara is adapted to the tastes of people. Zara, before taking a new garment on the market, talk to people who are engaged in the selling they know what sells, to see if the design of their new pledge will succeed. Conclusions We believe that strategies that Zara has used since 1975 have been appropriate because of the success it has today worldwide. Whether that has made a textile company to have a department of architecture at the rapid growth of branches. Knowing the tastes of clothing for people of certain areas ensures the purchase of those items, what better strategy than that. But we think that when entering a country like Ecuador would be worth if you invest something in advertising to know the brand through social networks, or billboards as does MNG. They are going to be the major clothes company in the world because their lower cost/differentiation. They manage really well the hiring and firing aspects of every country. Zara uses economy of scale specially in their garments made because it is feasible. The most important factor is the costumer service, human value and talent and communication