Group E

Nathaniel BOUABDALLAH| Yijun CHEN

Mengyun ZHANG Sergio MARTINEZ

Johnny

Outline
I.
II.

III.
IV.
V.

Zaras International Background

Cultural Tension
Negotiation
Conclusion and Recommandations
Bibliography

I. Zaras International Background

1975: Zara opens its first store in the centre of La Corua, Spain.
Coverage of Domestic Market.
Initial Strategy at the
80s.

Opening stores in big cities. (Over 100,000 inhabitants)

Changes in consumer behavior from domestic costumers.
-Spread time in traveling and education, less in clothes.

1986: Spains entry to European Union.

Key factor for Zara to succes, it brought:

-Potential economies of scale.

-Homogenisation of consumption patterns accross countries.
-Abolition of barriers to export.

I. Zaras International Background

1988: First store out of Spain.
Oporto, Portugal.

Fashion Capitals: Brand Presence.

-1989: New York.
-1990: Paris.
-2001: Miln.

1997-2005: Agressive expansion.

-1997: Israel.
-1998: Lebanon, Middle East, United Arad Emirates, etc.

I. Zaras International Background

Zaras Philosophy: National borders are no impediment to sharing a single fashion culture.

2015:
-Presence in 88 different countries.
-More than 2,000 Zara Stores.
-One of the main leader of the retail fashion industry.
(Main competitors: H&M, GAP, Uniqlo, Primemark)

II. Cultural Tension

Culturally &
Geographically Distant

Heavy Investment in
Land

Joint venture: ZARA &BITI

37-70% Failure

National Culture

Organizational Culture

II. Cultural Tension

Organizational Culture

ZARA &BITI

Means VS Goal

Internally VS Externally

Easygoing VS Strict

Local VS Professional

Open System VS Close System

Employee VS Work

Degree of Acceptance of
Leadership Style

Decision Making Process

Communication Flow

II. Cultural Tension

Give Everyone a Voice

Protect the Most

Innovative Parts

Train Everyone in Key

Norms

Maintain Heterogeneity
of Workforce

II. Cultural Tension

Masculinity
Herbivore men
61% of men in their 20s and 70% of
men in their 30s

II. Cultural Tension

Teenage Markets

Promotion Channels

-Six pockets"

-Cooporate with magazines

-Fashion pursuers

-Engage Japanese Idols as

their spokesmen.

-The speed new products and

fashions spread among the
teenage population.

III. Negotiation
Potential obstacles for business in Japan

Social context
High degree of
competition between
companies or
individuals
Work relations based
on a long term
perspective

Competition

Negotiation

Dynamic markets
Importance of
innovation, variety
and quality of
products

Cultural differences
(time, communication,
emotions, mentality)
Team orientation,
strategy

III. Negotiation
Japaneses negotiation style
Face to face negotiation
Slow decision-making, several meetings
Use of indirect communication
Collectivism, decisions in teams (consensus)
Build long term relationship and trust
Facilitate harmony and avoid conflicts
Body language, silent moments, contacts, gestures
Flexibility in case of problems, renegotiations
Abilities to listen and collect informations
Japanese have difficulties to say NO
Written contracts
Japanese prefer a win-win situation

III. Negotiation
Major stakes in a negotiation process
Establish objectives : Contract vs Relationship
Choose relevant attitudes : Win/lose vs Win-Win
Communication form : Direct vs Indirect
Group decision, organization : One leader vs Consensus
Level of risks : High vs Low

III. Negotiation

Concern for other partys

outcome

What ZARA should do: the different strategies

High

Low

Yelding

Lose-Win

Inacting

Lose-Lose
Low

Integrating
Win-Win

Both parties make compromises to gain

advantages together. ZARA and the
Japanese company are collaborative and
each party wins.

Contending
Win-Lose

High

Concern for ones own outcome

ZARA can persuade the Japanese company

to make compromises. ZARA has a better
bargaining
power
and
wins
the
negotiations,

III. Negotiation
What ZARA should do: the negotiation process

Be well-prepared

Identifying the differences

between Spanish style and
Japanese style
Knowing clearly its objectives
and its needs
Knowing the Japanese
objectives, needs and wants

Before the
negotiation

During the
negotiation
Tend to give more time and effort to
negotiation preliminaries with
Japanese negotiators
Consider concessions, then make
and seek concessions
Suggest alternative proposals and
listen to offered suggestions.
Adopt a formal posture and move to
an informal stance
Be culturally neutral and sensitive

Wait for closing the

discussion
Be patient to sign the
contract
Prepare an alternative plan
and consider a mediation
with the Japanese company

After the
negotiation

III. Negotiation
What ZARA should avoid

Poor
prepared

Failing to
pay
attention
to
Japanese
negotiator

Thinking
that it is
just a local
negotiation

Being too
impatient

Gloating

IV. Conclusion and Recommendations

1) Negotiation of the Joint Venture
Agreement
Because of difference of culture in
time, communication, emotions,
mentallity
Our Recommendations:

2) Management of the Tensions in the Joint

Venture
Joint venture with BITI to prevent: heavy
investment in land & the cultural/geographical
distance
To avoid the failure Zara should focus on two
aspects: National Culture and Organizational Culture

For the Negotiation Zara should :

The two main points of tensions would be:
Be well prepared and implicated
The Japanese employee-oriented system VS the
Pay attention to Japanese negotiators
Spanish work-oriented system
Target a win-win agreement
The Japanese closed system VS the Spanish
Be patient
open system
Our recommendations are:
To faciliate communication: Free talk + English
To keep its core value: Global Offer
A new joint venture culture: same training
To Maintain heterogeneity of the workforce

IV. Conclusion and Recommendations

3) Management of Cultural Differences in the Fashion Market
Our Recommendations:
Targeting strategy
Target the Japanese Youth
especially the Herbivore men
Fashion sensitive and own the purchasing power
Promotion Strategy:
To attract young Japanese and win their loyalty Zara should:
Advertise or cooperate with fashion magazines
Engage Japanese Idols as their spokesmen.

V. Bibliography
-Lopez, C., & Fan, Y. (2009). Internationalisation of the Spanish fashion brand Zara. Journal of Fashion Marketing and
Management: An International Journal, 13(2), 279296.
-Castro, I. (2003). Zara Japan Corporation. Boletin Economico de Ice-English, 2770, 98101.
-Lopes Z. and Fan Y. (2009), "Case Study: Internationalisation of the Spanish Fashion Brand Zara", Journal of Fashion
Marketing and Management Vol. 13 No. 2, pp. 279-296.
-Meyer E. (2015) , "When Cultural doesn't Translate", Harvard Business Review, pp. 66-72.
Zhiqing J., Shinya N. and Junzo W. (2014), "Luxury Fashion Brand Image Building: the Role of Store Design in Bally and
Tods Japan", Management Decision Vol. 52 No. 7, pp. 1288-1301.
-Castro, I. (2003), Zara Japan Corporation, Boletin Economico de ICE, Vol. 2770, pp. 95-8.
-https://tortora.wordpress.com/2009/11/18/zara%E2%80%99s-organizational-structure/
-http://www.slideshare.net/JakeRoviralta/zara-final-pdf
-Buell, B. (2007). Negotiation Strategy: Seven Common Pitfalls to Avoid. [online] Stanford Graduate School of Business.
Available at: https://www.gsb.stanford.edu/insights/negotiation-strategy-seven-common-pitfalls-avoid [Accessed 25 Oct.
2015].
-Business.qld.gov.au, (2014). Strategies for negotiating | Queensland Government. [online] Available at:
https://www.business.qld.gov.au/business/running/managing-business-relationships/negotiating-successfully/negotiatingstrategies [Accessed 25 Oct. 2015].
-Kwintessential.co.uk, (n.d.). Cross Cultural Negotiations | articles | cultural services. [online] Available at:
http://www.kwintessential.co.uk/cultural-services/articles/cross-cultural-negotiation.html [Accessed 25 Oct. 2015].

V. Bibliography
-Lewis, R. (2014). What You Should Know About Negotiating With Japanese. [online] Business Insider. Available at:
http://www.businessinsider.com/negotiating-with-japanese-2014-5?IR=T [Accessed 25 Oct. 2015].
-Salacuse, J. (2004). Negotiating: The Top Ten Ways that Culture Can Affect Your Negotiation | Ivey Business Journal.
[online] Iveybusinessjournal.com. Available at: http://iveybusinessjournal.com/publication/negotiating-the-top-ten-waysthat-culture-can-affect-your-negotiation/ [Accessed 25 Oct. 2015].
-Sherwin, D. (2013). 12 Essential Negotiating Strategies For Consultants. [online] Co.Design. Available
http://www.fastcodesign.com/1671787/12-essential-negotiating-strategies-for-consultants [Accessed 25 Oct. 2015].

at:

-Socol, C, Marius, M, & Aura-Gabriela, S 2010, 'The Impact of the Culture on the International Negociations: An Analysis
Based on Contextual Comparaisons',Theoretical & Applied Economics, 17, 8, pp. 87-102, Business Source Complete,
EBSCOhost, viewed 25 October 2015.