Zara SWOT Analysis and Tows

Strategic Management
Assignment - III
Submitted to:
Submitted by:
Prof. Dr. Sanjeev Malage
Amtarleena Sikdar
MFM - III
2014-16
National Institute of Fashion Technology, Bangalore
Zara:
SWOT analysis:
Strengths:
1. Strong brandingloyalty and awareness
2. Fulfilling demand in affordable yet trendy fashion
3. Fast delivery of new products and trends
4. highest numbers of products in the industry
5. Cost leadership strategy by aiming at cost efficiency
6. Highly efficient supply chain that supports fast fashion
7. Distribution efficiency by vertical supply chain
8. High frequency in the flagship stores in key locations
9. Multi-channel strategy
10. Extending online sales in existing market
11. Healthy financial performance
Weaknesses:
1. Pressure of cost leadership strategy in consideration to achieve high quality standard
2. Short lead time( only two weeks) forces less variation in style, design, colour and size
3.
4.
5.
6.
variation
Rapid growing effect lacking in e-commerce sector
Higher cost from vertical integration
Risk of single centralization
Cost up in overseas distribution, R&D and labour
Opportunities:
1. Global expansion in key markets like Asia and America
2. Going big and better in e-commerce sector and grow revenue through that
3. Company image and engagement for environment, labour, social and product
dimension
Threats:
1. Exchange rate fluctuations
2. Expansion strategy regarding market entry barriers
3. Change in customer demand, price sensitivity and trend and fashion ideas
4. Unsure success if entering markets which are less fashionable

5. Competitors such as H&M, GAP and Benetton and new entries in market that want to
recapitalize their profits in new markets.
6. Long term success in an competitive industry requires to maintain strong organic
growth
7. Group performance pressure to deliver high performance
TWOS matrix:
External
Internal
Strengths
1. Strong
brandingloyalty and awareness
2. Fulfilling demand in
affordable yet trendy
fashion
3. Fast delivery of new
products and trends
4. highest numbers of
products
in
the
industry
5. Cost
leadership
strategy by aiming at
Opportunities
Threats
1. Global expansion in
1. Exchange
rate
key markets like Asia
fluctuations
2.
Expansion
strategy
and America
2. Going big and better
regarding
market
in e-commerce sector
entry barriers
3. Change in customer
and grow revenue
demand,
shopping
through that
3. Company image and
behaviour,
price
engagement
for
sensitivity and trend
environment, labour,
and fashion ideas
4. Unsure success if
social and product
entering
markets
dimension
which
are
less
fashionable
5. Competitors such as
H&M, GAP and
Benetton and new
entries in market that
want to recapitalize
their profits in new
markets
6. Long term success in
an
competitive
industry requires to
maintain
strong
organic growth
7. Group performance
pressure to deliver
high performance
SO strategies
ST strategies
S1S9O1O2- Using existing
brand loyalty and awareness
and multichannel strategy to
expand market and flourish
in the e-commerce sector
S3S4S6S10O2- The huge
number of products coming
to the store within a very
short cycle of time will help
increasing sale in the online
S9S10T3Using
multichannel strategies and
online expansion to grab
online shoppers that will help
deal with the changing
shopping behaviour. Online
strategies
can
include
discounts to attract price
sensitive segment.
S1S3S4S6T5- To deal with
the competitors Zara needs to
cost efficiency
6. Highly
efficient
supply chain that
supports fast fashion
7. Distribution
efficiency by vertical
supply chain
8. High frequency in the
flagship stores in key
locations
9. Multi-channel
strategy
10. Extending
online
sales
in
existing
market
11. Healthy
financial
performance
Weaknesses
1. Pressure
of
cost
leadership strategy in
consideration
to
achieve high quality
standard
2. Short lead time forces
less variation in style,
design, colour and
size variation
3. Rapid growing effect
lacking
in
ecommerce sector
4. Higher cost from
vertical integration
5. Risk
of
single
centralization
6. Cost up in overseas
distribution,
R&D
and labour.
store as well, more the new

products more attractive
online shopping experience.
Along with this Zaras
unparalleled supply chain
will be helpful for product
shipment delivery in case of
online store and that will lead
to high level of customer
satisfaction. Also already
being started to sell online in
the existing customer base it
will help out in expanding
furthermore.
make use of all its core

strength that give it a
sustainable advantage.
S1S9S10O2- To overcome
barriers in entering new
markets they have to focus
on their branding and also
expansion
strategy
and
multichannel strategy.
S5S11O3- Healthy financial

condition and saving costs
can help them focus on the
betterment of the brad image
in terms of engaging labour
and
other
social
and
environmental activities
WO strategies
WT strategies
W3O1O2O3- To make it big
the company needs to look at
the immense opportunity it
has in the online sector and
create or develop an image
that would boost online sales
along with giving customers
an exclusive experience. Also
focusing on the online
marketing and selling in the
key markets.
W2O2- To grow in the
ecommerce sector Zara can
keep its best selling products
in
more
variations
permanently in its online
store.
W3T3As
shopping
behaviour is changing to
keep pace with that Zara can
tap on the online market with
intense
marketing
and
promotional activities that
will ensure growth and also
be able to stay at par with the
consumer base that in
inclining towards online
shopping.
Columbia Sportswear Company:

Columbia Sportswear Company is a United States company that manufactures and
distributes outerwear and sportswear. It was founded in 1938 by Paul Lamfrom, father of
present chairperson Gert Boyle. The company is headquartered in Cedar Mill, Oregon,
an unincorporated part of Washington County, Oregon, in the Portland metropolitan
area near Beaverton. Columbia Sportswear also produces footwear, headgear, camping
equipment, skiwear, and outerwear accessories.
Columbia Sportswear distributes its products in more than 72 countries and 13,000 retailers.
Columbia also operates its own chain of retail stores, including its flagship store located
in downtown Portland, Oregon.
IFE-EFE Matrix:
The IFE(Internal Factors Evaluation) matrix
Strengths
Weight Rating
Owners if multiple omni-technologies
.15
4
More than 70 years of experience
.1
3
Original founder family still runs the company
.07
3
Many jackets feature Columbia interchange system .09
4
Solar panels at headquarters building
.05
3
Weaknesses
Dependent upon key personnel
.1
1
Success depends on companys distribution system, .13
2
information system and growth strategy
Advance purchases often leads to excess inventory .15
2
Labour disputes
.1
1
Product Liability and warrant claims
.06
1
Total
1
The EFE(External Factors Evaluation) matrix
Opportunities
Innovation capabilities, high quality R&D
.3
4
Official Supplier to NBC
.18
4
Its a part of Outdoor Industry Association (OIA)
.1
2
Weighted Score
.6
.3
.21
.36
.15
.1
.26
.3
.1
.06
2.44
.12
.72
.2
Eco Working Group

Threats
Financial health of retailers
Dependency upon key suppliers
Change in historical weather conditions
Seasonality
Consumer preferences and fashion trend
Total
.12
.08
.1
.08
.04
1
3
2
2
2
1
.36
.16
.2
.16
.04
3.04
The IE Matrix:
Total IFE matrix score
Total EFE matrix score
Strong 3.0-4.0
Average 2.02.99
High 3.04.0
Medium 2.02.99
Low 1.01.99
Weak 1.0-1.99
II
III
IV
VI
VII
VIII
IX
I, II, IV- Grow and build

III, V, VII- Hold and maintain
VI, VIII, IX- Harvest or exit
According to the total IFE and EFE score, they fall in the division II of the IE matrix. The red
spot shows the approximate position if we plot both the scores. This division suggests grow
and build strategy for the company.
Columbia has a much lower score compared to its competitors such as Cabelas, Lululemon,
Under Armour Etc. The reason why Columbia has lower score is that their growth has been
very slow. The slow growth in combination with the economic recession gave them average
scores.
Bibliography:
https://en.wikipedia.org/wiki/Columbia_Sportswear
http://www.strategicmanagementinsight.com/tools/ife-efe-matrix.html
https://nicoleskubic.files.wordpress.com/2014/02/columbia-strategic-audit.pdf
http://www.ukessays.com/essays/marketing/company-analysis-for-zara-marketing-
essay.php
http://www.volunteerhub.com/blog/the-tows-matrix-putting-a-swot-analysis-into-
action/
http://www.managementparadise.com/balajiv.ganesh/documents/6231/zara---it-for-
fast-fashion/
http://www.cyberessays.com/lists/tows-martix-of-zara/

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Strategic Management

Prof. Dr. Sanjeev Malage

4. Unsure success if entering markets which are less fashionable

store as well, more the new

make use of all its core

S5S11O3- Healthy financial

Columbia Sportswear Company:

Eco Working Group

Total EFE matrix score

I, II, IV- Grow and build

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