Zara Group 3
Zara Group 3
Zara Group 3
Submitted by:
Cahayon, Clint Harvey C.
Calma, Andrea S.
Calixtro, Jessica M.
Climacosa, Marivic J.
Coria, Claryz R.
Submitted to:
Prof. Casiana Payumo
July 2022
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TABLE OF CONTENTS
V. Market Analysis……………………………………………………………………....12
d. Marketing Strategies
VIII. References…………………………………………………………………………….20
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I. NAME OF THE FIRM
VISION STATEMENT
A company's vision statement reflects its long-term goals and how it sees itself in
the distant future. The Zara vision statement is clear and concise, and it also reveals a
side of the fashion brand that we don't easily see while we are buying its clothes. The
statement shows how the company prioritizes society and the environment more than it
does on sales and profits.
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MISSION STATEMENT
The Zara mission statement is "to give customers what they want, and get it to
them faster than anyone else."
An effective mission statement is something that is clear and concise, and the
Zara mission statement definitely gets a check-in both these criteria. Quite interestingly,
the simplicity and directness of the statement are an accurate reflection of why Zara has
been so successful in the apparel industry. It isn't dilly dally and just does what needs to
be done.
Upon closer examination of the Zara mission statement, we can see that there
are two main components. Let us now analyze these components.
GOALS
Following its success in 2020, Zara has set many goals relating to sustainability,
including reaching net-zero emissions by 2040, 100% more sustainable procurement of
cellulose fibres, cotton, linen, and other materials, and becoming free of single-use
plastics—to name a few. With that in mind, we can expect to see more sustainable
changes at Zara while its fashion retains style and quality.
CORE VALUES
There are plenty of things that are important to the Zara fashion company, but
these are the core values that it has always used to guide it in making business
decisions and in running the day-to-day operations of the business.
Beauty
Being in the fashion industry, it only follows that there should be an appreciation and
upholding of aesthetics in all aspects of the business and life in general.
Clarity
Clarity is very important in a fast-paced environment like the fashion industry. The
clarity in communication, to be precise, is something that Zara always upholds, both
within the company and out in public.
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Functionality
In all its products, Zara sticks to a high standard of functionality. It may be high
fashion, but its clothes are totally wearable and not only for the runway.
Sustainability
Zara fully supports sustainability in all aspects, and this can be seen from its Join
Life collection and the increasing number of eco-stores that it has around the world.
Zara is one of the world's most well-known fashion brands. It is owned by Inditex,
the world’s largest fashion conglomerate.
Zara is a clothes store in Galicia, Spain. It is the flagship chain shop of the Inditex
group, the world's largest apparel retailer, and was founded in 1975 by Amancio Ortega.
Pull & Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home, and Uterqüe are
among the fashion group's brands. The corporation has 2,220 locations in 88 countries.
Zara has long been a leader in quick fashion with a very responsive supply chain.
Design, production, distribution, and sales through our broad retail network all revolve
on the customer.
Zara is a family-owned enterprise in northern Spain. Its first location offered low-
cost knockoffs of popular higher-end apparel and trend.
Zara was given to Amancio Ortega since his favorite name, Zorba, was already
taken. Zara’s fashion philosophy and business strategy gained popularity with the
Spanish customer during the next eight years. As a result, nine additional stores have
opened in Spain’s major cities. Inditex is now the world's largest fashion conglomerate,
employing over 174,000 people over 7,400 outlets in 202 countries, including 49 online
markets. Inditex's revenue in 2019 was USD 23.4 billion.
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IV. SWOT - PESTLE ANALYSIS
SWOT ANALYSIS
Strength
The Zara SWOT analysis will start by discussing the company's strengths. In this
subsection, researchers will examine the organization's distinctive capabilities, which
give it an edge in capturing a larger portion of the market share, attracting a larger
number of customers, and increasing profits.
Stores: Zara operates retail stores in 96 of the 202 countries where it conducts
business. Zara has the most fashion retail stores of any company in the world,
with 2,249 locations. It has roughly twice as many retail locations as Nike, the
company with the second-most retail locations.
Supply Chain: The company's supply chain is used to update the retail and
online collections of Zara every other week. Zara's ten logistical centers are
capable of delivering orders to any region on earth within forty-eight hours.
Inditex also employs a team of in-house software developers who are working to
improve the company's order fulfillment speed.
Team of Designers: The design team at Zara is comprised of 700 highly skilled
designers who translate customer feedback into actual product designs. Each
year, the design team produces a total of 50,000 pieces of work. In addition, it
takes them only three weeks to move designs from the drawing board to the
retail shelves.
Weakness
The fact that Zara refreshes its collection every three weeks distinguishes it from
other fashion houses. Zara has reached the pinnacle of its industry as a result of its
unwavering dedication to excellence. However, there is a cost associated with the
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benefit. The following is additional information regarding Zara's shortcomings:
Physical Store Dependence: The pandemic was the impetus for Zara's decision
to reduce the number of physical stores it operates. Due to the company's online
sales, Zara was able to recover from a significant drop in sales that was caused
by COVID-19-related issues. Despite the increase in online sales, total sales are
only 89 percent of what they were for the same period in 2019.
Expansion to the US and Asia-Pacific: There are 99 Zara stores in the United
States; however, out of a total of 2249 outlets, the stores in the United States
represent less than 4.4% of the total. Nevertheless, the United States is the
largest apparel market in the world. Furthermore, Asia-Pacific is responsible for
38% of the global apparel market. Zara has a modest presence in each of these
regions.
Opportunities
Rapid Cycle: The fact that customers visit Zara locations an average of 17 times
per year demonstrates the efficiency of the company's delivery cycle. This is due
to the company's propensity to respond to market trends as soon as they
become apparent. Currently, Zara requires between two and three weeks to
initiate, develop, and fully realize a new trend. It is anticipated that the brand will
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be able to maintain these cycles for a considerable amount of time in the future.
Reselling: The current size of the resale market, valued at $28 billion, is
anticipated to increase to $64 billion within the next five years. If the current
platform included a resale plan, customers would be able to purchase more while
simultaneously producing less waste. This simultaneously promotes consumer
spending and environmental responsibility.
Threat
In this final section of our SWOT analysis of Zara, we will examine the possible
obstacles the brand may face. In the traditional sense, H&M is Zara's biggest
competitor; however, the brand now faces a multitude of internet-based competitors.
However, Zara's problems go far beyond these competitions.
War of Prices: Fast fashion is Zara's primary market focus because it enables
the company to provide customers with the newest runway trends quickly and
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affordably. In an effort to lure customers away from Zara's line, imitators are
engaging in price wars, but the industry as a whole is fragile.
PESTLE ANALYSIS
Political
European Trade Agreements: Due to the fact that Zara is a Spanish brand, it is
able to take advantage of all the opportunities presented by doing business
within the European Union. The network of trade agreements within the
European Union (EUextensive) is one of the most compelling political arguments
in favor of establishing a business there. Not only does this make it extremely
easy to import raw materials and export finished goods within the European
Union, but it also enables Zara to ship its products around the world with minimal
effort and expense. This is due to the ease with which the European Union can
import raw materials and export finished goods. In general, the EU's free-trade
policies are extremely advantageous for Zara; we can only hope that the Union's
success will continue.
Economic
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Sociocultural
Online Shopping Trend: Online shopping is without a doubt one of the most
prominent trends in the 21st century. Despite the fact that clothing shopping may
not be the most natural fit for the internet, consumers today want to be able to
order their clothing with the click of a button and from the comfort of their own
homes. Given that Zara already operates a profitable online store, this may not
be a negative development for the company. However, Zara will need to closely
monitor the performance of its online store, as customers' preferred channels are
definitely undergoing a period of change.
Technological
Use of Big Data: Zara is one of many brands seeking to expand their reach
through the use of technology. Because the company is one of the most
successful fashion retailers in the world, it possesses both the financial resources
and customer base required to maximize data. As a result, Zara is interested in
big data, which refers to the study of analyzing massive data sets, in order to
discover more efficient ways to reach and attract customers. This is not a simple
endeavor because there are both online and offline customer touchpoints. You
can bet that Zara will be able to take their already successful business to the next
level if they are able to conduct fruitful data analysis.
Legal
Copyright Issues: Zara, like the rest of us, is required to comply with the law in
her business dealings. Copyright law is one of the most intimidating aspects of
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the legal system for fashion companies. Zara's propensity for identifying
emerging fashion trends and making them more affordable makes it inevitable
that the company will face copyright issues. The fact is that the major retailer
already possesses. It has been suggested that it has stolen clothing designs and
ideas from companies such as Adidas and Balenciaga. Who knows if Zara will
have the same good fortune in the future.
Environmental
Fast Fashion Impact: A common theme that emerges when discussing the
world of fast fashion is wastefulness. The majority of items sold in fast fashion
stores are not durable; rather, their primary objective is to provide customers with
reasonably priced clothing that appears to be of high quality in the dressing
rooms. In addition, it is said that fast fashion encourages consumers to jump on
trends quickly, causing them to discard their clothing in order to keep up with the
latest fashions. As Zara is considered by some to be a brand of fast fashion, the
company may be accused of being wasteful in this regard. As consumers
become increasingly environmentally conscious, it is possible that if the company
does not start taking sustainability more seriously, this will have a negative effect
on the brand.
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V. Market Analysis
Zara is a fast-fashion brand – a maker of apparel that has earned a lot of growth
and reputation in a short period. It identifies the latest trends in fashion and brings them
quickly to its stores at reasonable prices. However, the products can be different from
market to market which is because Zara does its research before releasing any product
in the specific markets the world over. It sells products that suit the local culture and
people’s tastes. It is best known for its latest styles and trending designs. Zara’s major
competing products and firms are H&M, Uniqlo, Forever 21, Gucci, Mango, M&S, and
GAP.
b. Pricing Strategies
The pricing strategy of Zara is focused on the average shopper that wants the
latest in fashion at affordable prices. Zara is a fast-fashion brand selling affordable
clothing. Its apparel is priced to cater to the price-sensitive consumers who want the
latest fashion but not at high prices. The affordable pricing strategy has helped it
address the needs of a very large consumer segment. The latest fashion at an
affordable price is highly popular among millennials. This type of pricing strategy has
also helped at two other points. It has helped create a unique brand image and grow
market share faster.
One of the keys is that everything that could be spent on advertising and hiring
media is used to create marketing techniques that work very well. One of the great
competitive advantages of Zara is based on logistics and commercial techniques.
Store Dressing
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Zara’s marketing and advertising strategy are based on a marketing concept that
has been lost in the wake of the rise of new technologies and online stores. One of the
most effective ways to get customers is to pass in front of your store, enter, and then
buy. The first step is already done – stores in the best places in the city – and now you
have to get them to enter the premises.
The windows have a fundamental role in the presentation of the collections. Zara
devotes special care to the design of its windows creates in its headquarters in A
Coruña, a bunker where practically no one enters and where they have the “phantom
showcases”, a whole section with streets and multiple windows were experts in window
dressing test, modify and they make multiple variations together with other experts in
other fields such as neuromarketing to find the final showcase that after exporting to all
the stores in the world.
The interior of the Zara stores achieves a balance between the exterior and the
interior of the establishment, with spacious, comfortable, and well-taken care of until the
last detail with a studied distribution and thought to the millimeter. For example, in the
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men’s section, combined pieces are exhibited so that they do not have to look for them
and instead, in the women’s section, the garments are placed by colors so that they
combine to their liking.
Like the shop windows, the interior layout changes every so often so that the
consumer has the sensation of experiencing the sensation of being “new” when they
enter the store again.
d. Marketing Strategies
Everyone knows that Zara “copies” the models of the big brands and that is not
entirely true. More correct words would be that it “copies the trends” of the big brands
and places them on the market in record time. And that’s thanks to his Just in Time
production.
This system of Japanese origin allows to increase productivity reducing the cost
of management and losses of storage of stocks since the system is based on producing
real orders. And while other brands of the textile market take between 3 and 6 months
to get a new collection in store, Zara needs a scant 15 days to launch the new trends to
the market, thus creating dependency on the part of its expectant clients that in a short
time get new clothes to the store.
Stores Investment
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The investment in stores in Zara has placed stores on 5th Avenue in New York, a
6-storey building in downtown Tokyo, several stores on Oxford Street in London and the
most luxurious buildings in Dubai. Emblematic, old or strategic places in each city so
that they draw attention either for their architecture or for being in a busy area.
Anonymous Models
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VI. Corporate Social Responsibility
In addition, Inditex has promised to completely stop using plastic bags by 2020, a
goal already met by Zara, Zara Home, Massimo Dutti, and Uterqüe. And by 2023, it
wants to completely stop selling single-use plastics to its customers.
Given consumer trends, the sustainable fashion movement is expanding and will
continue to do so. Competitors of Zara and other industry leaders in quick fashion,
including H&M, continue to release similar pledges. The bigger brands will encounter
significant difficulties when younger, smaller fashion firms emerge, such as Reformation
and Everlane, which were created from the bottom up with sustainability in mind. These
difficulties will eventually contribute to enhancing the supply chains' transparency and
motivating them to increase the sustainability of their operations. This is absolutely
necessary to improve the quality of life around the globe.
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The business promotes the use of products that lessen the burden on threatened
forests. In order to increase the availability of fibers like modal and viscose as
components for high-quality clothing, Zara has collaborated with its suppliers. INDITEX
is a founding member of the NGO Canopy, which launched the Canopystyle program
with the goal of preserving forested environments.
Reusing Textiles
Through its ethical and environmental objectives, Zara has also been aiming to
increase the longevity of its goods. The firm offers a clothing collecting program, and the
clothes collected are given to nonprofit organizations so they may be recycled or
repurposed.
Systems to regulate the use of water and electricity have been installed in every
Zara shop to meet the unique needs of each location. More effective solutions to control
consumption have also been established thanks to its stores' building and refurbishment
regulations.
All of the designers connected to the firm have received training on the usage of
textiles to encourage textile recycling as part of the company's commitment to the
Global Fashion Agenda, a non-profit organization pushing sustainability in the fashion
industry.
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VII. Conclusion and Learnings
Conclusion
The Zara company, on the other hand, strives to provide their customers with
reasonably priced, high-quality clothing. They aim to please all of their customers while
also preserving the environment. Despite the fact that they face numerous rivals in the
industry, they are able to satisfy clients' needs in a fashionable manner. For the
corporation to stand out from other businesses and to be well-known throughout the
world, they have their own brand of apparel and marketing. The well-known Spanish
brand prospered even in less developed countries, particularly in the Philippines, thanks
to its capacity to cater to the fashion and regional tastes of its clients. Filipinos' taste in
apparel was influenced by other nations, and Zara's aesthetically pleasing attire fits
them perfectly.
Additionally, consumers appreciate Zara not just for their distinctive fashion
sense but also for their significant contribution to environmental protection through the
creation of environmentally friendly products. The company's most well-known and well-
recognized brand, Zara, promises to stop using synthetic fibers made from fossil fuels in
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all of its footwear, apparel, and accessories worldwide. They made the decision to
employ organic cotton and eco-friendly textiles in all of their products.
Learnings
This firm analysis informed all aspiring clothing line businesses that if they
operate or intend to establish a clothing line business, they will not only be concerned
with the fashion aspect of the business, which is the core business, but they will also
want the business to flourish and grow. This was one of the most important lessons we
learned. Numerous business objectives should be pursued by a clothes boutique, and
while the creation of things is the most significant component of the business, other
purposes should also be considered.
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VIII. References
Swallow, T. (2021, August 10). What Makes Zara’s Join Life Branding Initiative
Sustainable?. Sustainability Magazine.
https://sustainabilitymag.com/esg/what-makes-zaras-join-life-branding-initiative-
sustainable
Business of Fashion. (n.d.). Zara is one of the world's largest international fashion
companies. It belongs to Inditex, the world’s biggest fashion group.
https://www.businessoffashion.com/organisations/zara
Martin Roll. (2021, November). The Secret of Zara’s Success: A Culture of Customer
Co-creation.
https://martinroll.com/resources/articles/strategy/the-secret-of-zaras-success-a-culture-
of-customer-co-creation/#:~:text=Zara%20was%20founded%20by%20Amancio,name
%20Zorba%20was%20already%20taken
Shastri, A. (n.d.). Detailed SWOT Analysis of ZARA – World’s Largest Fast Fashion
Brand. IIDE The Digital School.
https://iide.co/case-studies/swot-analysis-of-zara/
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Pratap, A. (2017, February 14). ZARA Marketing Mix and Marketing Strategy.
notesmatic.
https://notesmatic.com/zara-marketing-mix-and-marketing-strategy/#
interObservers. (n.d.). Zara Competitors: Revenue, Market share & Key Takeaways |
How Successful is Zara?.
https://interobservers.com/zara-competitors/
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