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Passion For Fashion Z ARA. Presented By: Eva ( Yihui Yan) , Sylvia ( Fei Gao ) , Emma ( Hanul Yang). Z ARA. History and SWOT Analysis Global Expansion and associated challenges Industry Analysis and Competitors Short –term and long-term Recommendations Conclusion. ZARA . - PowerPoint PPT Presentation
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Passion For Fashion
ZARA
Presented By: Eva (Yihui Yan), Sylvia (Fei Gao), Emma(Hanul Yang)
ZARA History and SWOT Analysis
Global Expansion and associated challenges
Industry Analysis and Competitors
Short –term and long-term Recommendations
Conclusion
ZARA • Parent company : Inditex by Amancio Ortega • In 1975, first ZARA store in A Coruna, Spain• SPA brand, fast fashion, instant fashion• Line up – women, men, kids• In 1980, Zara started to expand globally• Unique supply chain• Zero advertising policy• 1,444 stores in 77 countries
SWOT Analysis Strengths • Point-Of-Sales System send information products reflect quick feedback
• Unique Supply Chain 3 lines work separately designers + market experts send designs Zara factories produce • Accurate delivery use planes and trucks
• New products every two week• Make customers visit store more frequently • Prevent overused discount and sale• Get good reputation from viral marketing
Weaknesses• Can’t meet customers’ re-buying needs• Intense concentration on European markets • Low brand recognitions in certain markets
Opportunities• Potential markets• More online shops• Fast fashion market ; PRAV
Threats• What if some thing happens in Spain?• The continued rise of Fuel price• Newcomers with similar style
The Largest Clothing Retailer In the World
Zara Global Expansion
Global Segamentations of ZARA
14%
34%
29%
23%
Zara Global Expansion
• Global Expansion - International presences all over the world
• Europe - First : Porto, Portugal in 1980 - Second: France 1990 - Third: Belgium & Sweden 1994• North America - U.S 1989• South America - Mexico 1992• Asia - Tokyo, Japan 2004
• Now- Zara owns 1,444 stores worldwide in 77 countries.
Zara Global Expansion
Global Expansion Strategies
Standardized Global Marketing Lower the cost Offer standardized apparel Economies of scale
Vertical Integration [centralized approach] design produce distribute
large R&D group: > 200 people (designers + marketing experts + production managers)
Global Expansion Strategies Zero Advertising Policy 0% - 0.3% of its revenue in commercials Use fashion shows & posters instead
Internet Retailing Strategy Divisions: (official web) Woman/Man/TRF/Kids
– Look book – Magazine – Catalogue
Zara in Emerging Markets BRIC Brazil – 27 stores Second largest market in South America Russia – 37 stores, stores in Moscow, Saint Petersburg India – 3 stores (Delhi, Mumbai, Bengaluru) Joint-venture with Tata China – 60 stores Shanghai, 2006 Beijing, 2007
HK, 2004 Macau, 2007 Chengdu, 2010
0
10
20
30
40
50
60
Brazil Russia India China
Zara Stores in BRIC
Stores
27 37 3 60
Beijing, China
New York, U.S.Hamburg, Germany
Challenges• The tightly controlled supply chain won’t fit every market, especially the foreign one.
• Different regions
have different understanding of fashion.
• Hard to implement
the whole business model due to joint venture ex: India
Chanllenges
• Fierce competition - local: MNG (MANGO) - global: Gap, H&M, Gucci
• Glommy Economy (Financial Crisis, 2007-2010) Shrinkage of the fashionable
clothing sales
Industry Analysis
• Product of the modern age
• Developed first in Europe and America
• Consists of four levels 1. the production of raw materials 2. the production of fashion goods 3. retail sales 4. advertising and promotion
Fashion Capitals Rankings
Zara, $9.55
billion
HM, $17.98 billion
GAP, $14.50 billion
Gucci, $3.06 billion
Renvenue in 2009
ZaraHMGAPGucci
Competitors
• spend more money on advertising.
• outsource all of their productions
• 0% - 0.3% of its revenues in advertising
• In Spain, Zara owns 22 factories, and 50% of its products are made by their own manufacturers.
VS
Competitors
• Luxury good: High-grade, luxurious, classic style
• Target market: Age: 25-40 • leather goods, shoes,
watches, perfume, household goods and pet supplies
• Fair price, fast fashion, low-cost
• Target market: Age: 18-35 mainly women and men, kids clothing
VS
Competitors
• The largest clothing company in USA
• Focus on the Jeans and hoodies
• Casual, sport style
• Multi-Brands: GAP, Banana Republic, Old Navy
• The largest clothing retailer in the world, No.1 in Spanish Clothing Market
• Sweaters, T-shirt
• Relatively mature
• a subsidiary of Inditex
VS
Competitors
Short-term recommendations
Promotion activities DIY – Design It Yourself!
More Online stores
Internet advertising
Long-term Recommendations
• Advertising- TV commercials- Advertisements on magazines- Activities ( involve customers)
• Differentiation- Offer sepcialized products uniquely designed for a certian culture/region
Long-term Recommendations
• Improve its logistics and build ECR system to react more quickly to changes in consumption patterns
• Locate more manufacturers and distribution
infrastructures in emerging countries
• Franchising
conclusion ▷ Challenges
• Tightly controlled supply chain• Different fashion concepts• Competitors• Gloomy economy
▷ Recommendations
• Advertising• Online shops • Various promotions• Improve logistics • ECR system• Building infrastructures in emerging markets• Franchising
▷ Global Locations:
1,444 stores in 77 countries