ALFORQUE, GRACE PUA, PEARL VERSOZA, SHEILA

History & Background

Current Competitive Situation

China currency policy
Focus on global expansion Fast fashion & Customization Technological advances & E-Commerce Global Sourcing

Problem Identification
How is Zara going to expand successfully all over the world with the same level of speed and instant fashion?

External Environment
Growing apparel retail market in Asia
Growing online sales opportunity Rising Labor cost in European region

Internal Organizational Environment

Differentiation Unique Marketing Strategy Materials Management Strong distribution network Zero advertising Overdependence on the European market Reliance on local designers

Strategic Factors Analysis

STRENGTHS Differentiation Marketing Strategy Materials Management Information Systems Strong distribution network Zero advertising WEAKNESS Overdependence on the European market Reliance on local designers

OPPORTUNITY Growing apparel retail market in Asia (China, India, Malaysia, Taiwan and Indonesia) Growing online sales opportunity

THREATS Rising Labor cost in European region China currency policy Focus on global expansion of other retailers

Critical Success Factors

CRITICAL SUCCESS FACTORS: Behind the success of Zara are four strategic key elements that are always considered by the company. Such elements are: Speed in Design and Production Strong Logistics Customer Service/Response Stores Visual Merchandising 25% 25% 30% 20%

Alternatives
Alternative #1: Create production and distribution hubs in strategic regions to serve the stores or outlets in neighboring countries. Production and distribution shall be done in each hub.

Alternatives

Alternative #2: Outsource the distribution for fast delivery of stocks to stores in other countries, but retain their production center in Spain, and strengthening the communication facilities.

Recommendation
Alternative #1: Create production and distribution hubs in strategic regions to serve the stores or outlets in neighboring countries. Production and distribution shall be done in each hub.
maximize production by saving costs on shipments, labor and raw materials, thereby decreasing manufacturing costs

ensures fast design and product development

fast turnover and delivery of products to retail outlets

Implementation, Evaluation & Control

1. Determine the expansions or manufacturing hub location.

Implementation, Evaluation & Control

1. Headquarter which is in Spain will need to delegate Officers and workforce teams to be placed in each hubs but some staff and labor needs will be outsourced from the nearby regions where Zaras manufacturing hubs are placed to minimize cost.

Implementation, Evaluation & Control

1. Each hub will be treated as Business Units

2. Technological trends will be exploited, expansion of online stores