ZARA COMPANY by Isabelle Borges

ANGGA SASTRA WIJAYA

WIRA BUDI SATRIA

29113247
29113164

1. Situational Analysis
They have strong competitive advantage from their competitors. They sell their product at
affordable prices, made by good materials, keep uniqueness of the products, clothes featuring
special technique, intricate design , and make the product by new technologies. Skill and
knowledge in processing the raw material is their important intangible asset.
Its business model
Key Partners

Key Activities

12 stores were
operated as joint
ventures (in Japan,
mexico, Germany)
and 31 were
franchises (all
outside Spain)
Subcontractor

Maintain between joint

ventures operated
company with modern
business franchises
situation in harmony.

Key Resources
Highly skilled
Specific and modern
machinery for created a
clothes

Value Propositions
Uniqueness of
products
fashion at
affordable prices,
made by good
materials, clothes
featuring special
technique, intricate
design , and new
technologies , were
at the top of thye
price scale .
Variations on every
single products
Fast in retailing
process, from
design to store, and
from stores old
product and new
product

Customer
Relationship

Customer
Segments

Indirect interaction
between company and
clients

Retailed & Multi

sided market
(Both B2C and
B2B market)

Channels
Official Retailed
markets of Zara in
(507 in 33 Countries)
E-commerce

Cost Structure

Revenue Streams

A value driven business structure but with cost driven in minds

Product sales

Their key success factors comes from these factors:

Team:
A compact structure of a company organization. Help mantaining the control of
decision.A strong dedication in making the highest quality of products.

Process:

Resource:

Vertical integration, from raw material processing, production and distribution.

Skilled work forces in the factory to maintain the craftmanship of the products.
Exploiting the suppliers geographical proximity to ensure lower cost and quick
respon to order.
Own factories network, in-house production and own distribution centre. The
great team and scheduled process ensure this resource used effectively.

2. Diagnosis of problems
Symptoms:
Zara must to create more suitable strategy when they have more stores than what they have
today to success in their international expansion. Benetton as the successful pioneer of the
fashion retail industry doesnt own inventory at its franchise stores to get some advantages in
their international expansion. If Zara dont have more suitable and clear strategy for this
expansion, they will face difficulty in mantaining their tight controlled supply chain and logistic
activity.
Opportunity:
Zara has been on the right track with 2 new stores per week and 90% of it opened outside
spain. However, Zara must ensure their competitive advantage will still exist in their
international expansion. Until now, Zara has the less overall inventory per unit sales than their
competitor. This make their loyal customer know that they has to buy zaras product on the spot
and as fast as they can or they will lose it.
3. Alternatives
.The first alternative is adopt the benetton strategy which must reduce their well-known
competitive advantage and create new customer perception. The second alternative is develop
the current strategy with keep and maintain their well-known competitive advantage and keep
their current customer perception.
4. Recomendations for Actions
Develop their current strategy with maintain their well-known competitive advantage. They
must create different policy than benetton. They can develop their current strategy to meet with
their target in international expansion and exceeds their competitors limit. Rapid product
movement will make higher cost, but with effective selling that they have now, they can set more
interesting discount rate to customer and get their attention. They could build one distribution
centre per continent and small warehouse in selected country per continent to ensure faster
supply chain and retailing process.They could diversify end products to gather more market, but
keep develop its core products. Collaboration with famous designer to make a limited number of
specific products will create more attention from their international customer.