· • Mission statement • Long-term objectives • Values • External assessment • Internal assessment • Strategies • SWOT matrix • BCG,IFE,EFE,IE,BSC • Bibliography

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www.iranstrategist.com

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Adventure Works: mission, vision, values, objectives, SWOT, strategies, BCG,IFE,EFE,IE,BSC

Define and analyze

strategic statements of

ZARA


Professor:Dr.KhalilneZhad

Navid Majedi

Autumn 2017

Editor

Mahdiyeh Abolghasemi

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• Introduction• Background• Competitive

advantage

• Vision

• Mission

• Long-term objectives

• Values

• External assessment

• Internal assessment

• Strategies

• SWOT matrix

• BCG,IFE,EFE,IE,BSC

• Bibliography

Introduction


Company background

▫ Founded in Spain, 1975

▫ 2169 shops in 88 countries

▫ Major brand of the

INDITEX (1963)

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advantage

• Vision statement

• Mission statement


• Values



• Strategies

• SWOT matrix


• Bibliography

Introduction


Company background

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advantage

• Vision

• Mission


• Values



• Strategies

• SWOT matrix


• Bibliography

Introduction


Company background

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advantage

• Vision

• Mission


• Values



• Strategies

• SWOT matrix


• Bibliography

Introduction


Company background

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• Introduction• Background

• Competitive

advantage

• Vision

• Mission


• Values



• Strategies

• SWOT matrix


• Bibliography

Introduction


Competitive advantage of ZARA

▫ Speed

5 weeks compare to 6-9 months

Complex IT system

Create 40000 designs and produce 10000 of them by 300

designers compare to 2000-4000 of competitors

Produce in small lots

more production capacity than necessary

JIT

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• Introduction• Background

• Competitive

advantage

• Vision

• Mission


• Values



• Strategies

• SWOT matrix


• Bibliography

Introduction


Competitive advantage of ZARA

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nts "To attain market leadership through unmatched quality, a

diverse and unique product mix, empowered employees, world-

class systems, and the highest ethical and professional

standards."

Vision analysis• Introduction




• Values



• Strategies

• SWOT matrix


• Bibliography

The company’s vision as stated on the website


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"ZARA Textile is devoted to achieve consistent improvement

in the system of providing products & services to the customers

through On Time Delivery & Enhancing Customers

Satisfaction by means of Quality and Value."

Mission analysis• Introduction




• Values



• Strategies

• SWOT matrix


• Bibliography

Zara states that it’s mission is that


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▫ Save energy, the eco-friendly store

▫ Produce less waste and recycle

▫ Their commitment extends to all their staff, increasing

awareness among the team members

▫ Use ecological fabrics, organic cotton

▫ Use biodiesel fuel

Long-term Objectives

• Introduction



• Long-term

objectives

• Values



• Strategies

• SWOT matrix


• Bibliography


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▫ beauty

▫ clarity

▫ functionality

▫ sustainability

Values • Introduction




• Values



• Strategies

• SWOT matrix


• Bibliography

expressed simply in the same four key words that

define all our stores


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▫ Barriers to entry

Economies of Scale

Brand Loyalty

Absolute Cost Advantages

Customer Switching Costs

Government Regulations

External assessment

• Introduction




• Values

• External

assessment• Porter’s 5 force• Opportunity &

threat


• Strategies

• SWOT matrix


• Bibliography

Michael Porter’s Five-Forces Model


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▫ Rivalry

Industry Competitive Structure

Industry Demand

Cost Conditions

Exit Barriers

• Introduction




• Values

• External


threat


• Strategies

• SWOT matrix


• Bibliography

External assessment



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▫ Buyer Power

many small companies and buyers are large and few in number

buyers purchase in large quantities

Buyer’s switching costs are low

feasible for buyers to purchase an input from severalcompanies at once

buyers can threaten to enter the industry

• Introduction




• Values

• External


threat


• Strategies

• SWOT matrix


• Bibliography


External assessment


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▫ Supplier Power

product that suppliers sell has few substitutes

profitability of suppliers is not significantly affected

by the purchases of companies in a particular

industry

Switching cost of company relative to suppliers’

position

Companies in the industry cannot threaten to enter

their suppliers’ industry

• Introduction




• Values

• External


threat


• Strategies

• SWOT matrix


• Bibliography

External assessment



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▫ Substitutes

If an industry’s products have few close substitutes

(making substitutes a weak competitive force) then

companies in the industry have the opportunity to

raise

• Introduction




• Values

• External


threat


• Strategies

• SWOT matrix


• Bibliography

External assessment



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• Introduction




• Values

• External


threat


• Strategies

• SWOT matrix


• Bibliography


External assessment


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• Complements (by: Andrew Grove)

▫ Complementors are companies that sell products that add

value to (complement) the products of companies in an

industry because, when used together, the use of the

combined products better satisfies customer demands.

• Introduction




• Values

• External


threat


• Strategies

• SWOT matrix


• Bibliography

External assessment

A sixth force


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Radar chart

00.5

11.5

22.5

33.5

44.5

5suppliers' power

substitute

rivalry

buyers' power

barries of entry

complements

• Introduction




• Values

• External


threat


• Strategies

• SWOT matrix


• Bibliography

External assessment

Michael Porter’s Five-Forces Model for ZARA


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▫ Fierce Competition

▫ Lawsuit related to sweatshops

▫ Possible imitation of goods

▫ Dilution of Brand Equity

▫ Increasing middle class in Asia

▫ Opportunity to build distribution

centers in developing countries to

lower costs

▫ New designers for better designs

▫ Rising environmental issues

▫ International Recognition

• Introduction




• Values

• External

assessment• Porter’s 5 force

• Opportunity &

threat


• Strategies

• SWOT matrix


• Bibliography

External assessment

OPPORTUNITIES THREATS


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▫ Limited Stocks Price

▫ Brand image closely tagged to

competitors

▫ Lack of Marketing

▫ Global Outreach

▫ Strategic Location

▫ Distribution Strategy

▫ Store Image

▫ Fast Changing collection

▫ Responsive Employees

▫ Brand Image

• Introduction




• Values


• Internal

assessment

• Strategies

• SWOT matrix


• Bibliography

Internal assessment

Strengths Weaknesses


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The Strategies• Introduction




• Values



• Strategies• Corporate level• Business level

• SWOT matrix


• Bibliography

Integration Strategies (vertical, horizontal)

Zara performs some horizontal integration through its acquisition of Massimo Dutti and Stradivarius

Integration strategies


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▫ Zara is entering new

markets

▫ Penetrating in European

and American markets by

improving online store

and increase customer

service in all retail stores.

▫ Produce accessories

• Introduction




• Values




• SWOT matrix


• Bibliography

The Strategies

Intensive Strategies


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▫ concentric

▫ Conglomerate

▫ Horizontal

• Introduction




• Values




• SWOT matrix


• Bibliography

The Strategies

Diversification Strategies


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▫ Zara sells accessories to complement their main product which is

apparel (related)

▫ Zara Home is a retail store which specializes in home fashion and

decoration. A luxury brand (unrelated)

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Zara has no defensive strategy because the company is in good condition

▫ Joint venture

▫ Retrenchment

▫ Sell

▫ Liquidation

▫ Combination

• Introduction




• Values




• SWOT matrix


• Bibliography

The Strategies

Defensive Strategies


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• Michael Porter’s Five Generic Strategies

The Strategies• Introduction




• Values




• SWOT matrix


• Bibliography

The Strategies


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Hig

her

co

sts/

hig

her

pri

ces

lower costs/

lower prices

• Introduction




• Values



• Strategies• Corporate level

• Business level

• SWOT matrix


• Bibliography

The Strategies

Michael Porter’s Five Generic Strategies


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ZARA

• Introduction




• Values



• Strategies• Corporate level

• Business level

• SWOT matrix

• BCG,IFE,EFE,IE,BS

C

• Bibliography

The Strategies

Michael Porter’s Five Generic Strategies


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Weaknesses Strengths

SWOT strategies matrix

(W1) Limited Stocks(S1) Global Outreach

(W2) Price(S2) Strategic Location

(W3) Brand image closely tagged to competitors(S3) Distribution Strategy

(W4) Lack of Marketing(S4) Store Image

(S5) Fast Changing collection

(S6) Responsive Employees

(S7) Brand Image

WO Strategies SO Strategies Opportunities

(W2, O1) Charge products at competitive price in Asian

countries’ standards

(S1, O1) Open new stores in developing countries in Asia(O1) Increasing middle class in Asia

(W3, O3) Produce a signature collection(S3, O2) Build distribution centers in Asia to lower

distribution costs for Asian countries

(O2) Opportunity to build distribution center in developing

countries to lower costs

(W4, O4) Enhance the current brand image and company’s

image

(S5, O3) Be the trendsetter(O3) Cooperation with new designers

(S7, O4) Promote the company’s vision to be an eco-friendly

company

(O4) Rising environmental issues

WT StrategiesST StrategiesThreats

(W4, T1) Increase spending for marketing campaign(S1, S2, T1) Expand in new market and be the first player in

the market

(T1) Fierce Competition

(W3, T4) Enhance ZARA’s differentiation through its

unique designs

(S5, T3) Produce the new trends with higher turnover(T2) Lawsuit related to sweatshops

(S6, S7, T4) Increase the brand equity through better service(T3) Possible imitations of goods

(T4) Dilution of Brand Equity

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Question Marks (Low Market

Share, High Market Growth)

STARS (High Market Share, High

Market Growth)

Dogs (Low Market Share, Low

Market Growth)

Cash Cows (High Market Share, Low

Market Growth)

BCG(Boston consulting group)

• Introduction




• Values



• Strategies

• SWOT matrix

• BCG,IFE,EFE,IE,

BSC

• Bibliography

Mar

ket

gro

wth

Market share


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EFE Matrix• Introduction




• Values



• Strategies

• SWOT matrix

• BCG,IFE,EFE,IE,

BSC

• Bibliography

KEY EXTERNAL FACTORSWeights 0.0

to 1.0

Rating

1 to 4

Weighted

Score

OPPORTUNITIES

1. Increasing middle class in Asia 0.10 3 0.3

2. Opportunity to build distribution centers

in developing countries to lower costs0.05 1 0.05

3. New designers for better designs 0.10 3 0.3

4. Rising environmental issues 0.05 4 0.2

5. International Recognition 0.20 4 0.8

THREATS

1. Fierce Competition 0.2 4 0.8

2. Lawsuit related to sweatshops 0.05 2 0.1

3. Possible imitation of goods 0.05 2 0.1

4. Dilution of Brand Equity 0.2 4 0.8 +

TOTAL 1.00 3.45


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IFE Matrix• Introduction




• Values



• Strategies

• SWOT matrix


• Bibliography

Key Internal Factors Weight Rating Weighted Score

Strengths

1.Global Outreach 0.08 3 0.24

2.Strategic Location 0.08 3 0.24

3.Distribution Strategy 0.12 4 0.48

4.Store Image 0.12 4 0.48

5.Fast Changing collection 0.09 4 0.36

6.Responsive Employees 0.03 3 0.09

7.Brand Image 0.15 4 0.6

Weaknesses

1.Limited Stocks 0.08 2 0.16

2.Price 0.12 1 0.12

3.Brand image closely tagged to

competitors

0.08 1 0.08

4.Lack of Marketing 0.05 2 0.10

Total 1 2.35


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IE Matrix• Introduction




• Values



• Strategies

• SWOT matrix

• BCG,IFE,EFE,IE,

BSC

• Bibliography

THE IFE TOTAL WEIGHTED SCORES

Th

eE

FE

TO

TA

L W

EIG

HT

ED

SC

OR

E

Strong

3.0 – 4.0

Average

2.0 – 2.99

Weak

1.0 – 1.99

Strong

3.0 – 4.0

High

3.0 – 4.0

Medium

2.0 – 2.99

Low

1. – 1.99


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BSC Matrix• Introduction




• Values



• Strategies

• SWOT matrix

• BCG,IFE,EFE,IE,

BSC

• Bibliography

Primary responsibilityTime expectationMeasure of targetArea of object

Customer

• Improve the customer

service through

employee trainings

• Aggressive expansion

2017EBIT increased by

35% (from 24% in

2012)

1. Satisfactory

shopping

experience

Utilize the POS

through customer

feedback reported by

the store manager

through PDA

201740,000 new designs

per year (from 36,000

designs in 2012)

1. Local Variation

Managers/Employees

Enhance good

communication

between managers

and employees

10 yearsEmployee Turnover

decreased by 20%

1. Employee welfare


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• Introduction




• Values



• Strategies

• SWOT matrix

• BCG,IFE,EFE,IE,

BSC

• Bibliography

Primary responsibilityTime expectationMeasure of targetArea of object

Operations/Processes

Utilize the purchase

office to project the

trend in Asian market

2017Asian sales

percentage increased

to 30% (currently

20%)

1. Hong Kong

Purchasing Office

utilization

Outsource more types

of clothing to be

produced in Asia

2017Marginal Cost

decreased by 5%

1. Lowering the

Production Cost

Community/Social Responsibility

Through major

outsourcing, ZARA

(Inditex) has been

able to provide jobs

for more than 5

million people in

India

Annually Unemployment Rate

in host country

(India) decreased by

3%

1. Provide jobs

through its

outsourcing

BSC Matrix


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• Introduction




• Values



• Strategies

• SWOT matrix

• BCG,IFE,EFE,IE,

BSC

• Bibliography

Primary responsibilityTime

expectation

Measure of targetArea of object

Business Ethics/Natural Environment

Environmental

Management System

pursuant to the ISO

14001 standard

Emission control

dumping and waste Plans

Admission to Dow Jones

Sustainability Index

2016Number of ecological

clothing items

increased to 20

million

1. Eco friendly

company

Financial

TQM practice

Inditex sustainability

model

Optimization of global

expansion

2017Net Income increased

to 30% (currently

22%)

1. Financial

sustainability

BSC Matrix


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• Charles W. L. Hill and Gareth R. Jones : Strategic Management: An IntegratedApproach, Tenth Edition

• David, F. (2013). Strategic Management: Concepts and Cases. New Jersey: Pearson International Edition.

• Ghemawat, P., & Nueno, J. L. ZARA: Fast Fashion. Harvard Business Journal , 1-35.

• Inditex. (2013, September 18). Inditex’s net sales rise 6% to 7.7 billion euros. Retrieved November 28, 2013, from Inditex: http://www.inditex.com/en/press/press_releases/extend/00001019

• Inditex. Our Team. Retrieved November 28, 2013, from Inditex: http://www.inditex.com/en/who_we_are/our_team

• Inditex. Timeline. Retrieved November 28, 2013, from Inditex: http://www.inditex.com/en/who_we_are/timeline

• Keller, A. A. (2012, October 26). Zara Strategic Marketing Plan. Retrieved December 1, 2013, from Oeconomicae: http://www.oeconomicae.com/documents/Author/Strategic%20Marketing%20Plan,%20Zara,%20Arteixo,%20Spain.pdf

• Sandoval, B. (n.d.). Zara: IT for Fast Fashion. Retrieved November 28, 2013, from UHV: http://www2.uhv.edu/luj/MGT6352/Samples/Student%20Sample%203.pdf

• Wikipedia. Fast Fashion. Retrieved November 28, 2013, from Wikipedia: http://en.wikipedia.org/wiki/Fast_fashion

Bibliography for further studies• Introduction




• Values



• Strategies

• SWOT matrix


• Bibliography

Bibliography


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The essence of

strategy is

choosing what

not to do.Michael Porter


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Documents

· • Mission statement • Long-term objectives • Values • External assessment • Internal assessment • Strategies • SWOT matrix • BCG,IFE,EFE,IE,BSC • Bibliography