Fast Fashion-Zara

Background

Strategic
Management
Process

Strategies

Discussion
Questions

Background

Background
Founder: Amancio Ortega
To tackle the outdated clothing industry which take long time manufac
turing before sale.
Having more style than Gap
Faster growth than Target
Logistical expertise rivaling Walmarts

Background

Background

Strategic Management Process

Strategic Management Process

Strategic Management Process

Step 1
Step1: Identifying the Organizations Current Mission, Goals, and
Strategies.
Mission: Fast Fashion
Goals: Getting designs to customers quickly
Strategies:
- Not creating, but following the trend
- Limited merchandise
- Locations
- Time compressing
- Vertical integration

Strategic Management Process

Step 2
Step2: Doing an External Analysis.

Opportunities

Threats

- Trendy designs
- Worldwide branches

- Many competitors
- Not so cheap

Strategic Management Process

Step 3
Step3: Doing an Internal Analysis.
Strengths
- Many designers, short
duration
- Customers first
- Limited merchandise, stock
controlling
Hunger marketing
- Expert in vertical integration
- Make good use of IT system

Weakness
- Short life cycle of
merchandises
- Cannot satisfy the luxury
consumers
- High repeatability with
other brands
- Tort claims

Strategic Management Process

Marc Jacobs

ZARA

Valentino

Burberry

ZARA

ZARA

Strategic Management Process

Step 4
Step4: Formulating Strategies
- Design to store floor in two weeks
- Stock new designs twice a week
- Each segment works closely and efficiently
Fast turnaround

Strategic Management Process

Step 5
Step5: Implementing Strategies
- Produce most of designs close to home
- Quality check
- Shipping by planes
- Feedback system

Strategic Management Process

Step 6
Step6: Evaluating Results
- More than 5,618 stores in 84 countries
- Pulls more than 60 percent of the companys revenues
- Competitors are working to be faster

Strategies

Strategies

Corporate Strategy
Growth

Vertical integration from designing to sales of

products

Stability

Maintain its goal to provide fast and affordable

fashionable items

Renewal

While the competitors are working to be faster,

Zara has made the jump to online retailing.

Strategies

Competitive Strategy

Strategies

Competitive Strategy
Five forces models:
1. Threat of new entrants.
Low
2. Threat of substitutes.
Moderate
3. Bargaining power of buyers. Moderate
4. Bargaining power of suppliers. Low
5. Current rivalry.
High

Strategies

Competitive Strategy
Three generic competitive strategies:
a cost leadership strategy.
differentiation strategy.
focus strategy.
In this case:
Competitive advantages: Fast-Fashion, customer responsiveness, a
nd business operation .
Competitive strategies: Differentiation strategy.

Strategies

Functional Strategies
New methods enable manager to order and display mercha
ndise faster.
New cargo routes for shipping goods.
Jump into online retailing.

Discussion Questions

Discussion Questions
1. How is strategic management illustrated by this case
story?

Discussion Questions

Discussion Questions
2. How might SWOT analysis be helpful to Inditex exec
utives? To Zara store managers?

Discussion Questions

Discussion Questions
3. What competitive advantage do you think Zara is pur
suing? How does it exploit that competitive advantage?

Discussion Questions

Discussion Questions
4. Do you think Zaras success is due to external factors
or both? Explain.

Discussion Questions

Discussion Questions
5. What strategic implications does Zaras move into onl
ine retailing have?
(Hint: Think in terms of resources and capabilities.)