How well does Zaras advantage travel
How well does Zara's advantage travel globally?
Zara has several advantages when it expands its operation in global markets.
Firstly, Zara has always promoted its products via its stores and it had its own centralized distribution center which will translate to low advertising and logistics costs when it enters new markets. As opposed to its competitors who would invest heavily on advertising and organize a distribution system.
Secondly, apparel retailing was witnessing increasing concentration which would benefit Zara when it entered new markets.
Thirdly, there was more homogeneity in fashion which supported Zara’s brand of clothing since its target market is consumers receptive to fashion. Moreover Zara has an adequate system of knowing local trends and tastes which it would reflect in its designs. The strategy of opening one store for information gathering in the initial phase of entering new markets is one of its key strengths.
Lastly, economies of scale were another advantage for Zara when entering a new market.
The International strategy of Zara.
After opening its first store in La Coruña in 1975, ZARA expanded within the domestic market during the 1980s. International expansion started with the opening of a store in Oporto, Portugal in 1988 (Carmen & Ying 2009). Currently, ZARA is already operating over the five continents with over 1,700 stores. International sales accounted close to 70% of its total turnover, with Europe being its largest market by far.
ZARA has been identified as a trans-national retailer (Alexander & Myers 2000). On the surface, this may appear as a peculiar classification since they appear committed to a highly standardized operating formula which provides little opportunity for market responsiveness. Analysis of ZARA’s internationalization strategy would indicate otherwise (Bruce, Moore & Birtwistle 2004). While the brand image is highly standardized, its product development and merchandising strategy are very flexible and
Zara has several advantages when it expands its operation in global markets.
Firstly, Zara has always promoted its products via its stores and it had its own centralized distribution center which will translate to low advertising and logistics costs when it enters new markets. As opposed to its competitors who would invest heavily on advertising and organize a distribution system.
Secondly, apparel retailing was witnessing increasing concentration which would benefit Zara when it entered new markets.
Thirdly, there was more homogeneity in fashion which supported Zara’s brand of clothing since its target market is consumers receptive to fashion. Moreover Zara has an adequate system of knowing local trends and tastes which it would reflect in its designs. The strategy of opening one store for information gathering in the initial phase of entering new markets is one of its key strengths.
Lastly, economies of scale were another advantage for Zara when entering a new market.
The International strategy of Zara.
After opening its first store in La Coruña in 1975, ZARA expanded within the domestic market during the 1980s. International expansion started with the opening of a store in Oporto, Portugal in 1988 (Carmen & Ying 2009). Currently, ZARA is already operating over the five continents with over 1,700 stores. International sales accounted close to 70% of its total turnover, with Europe being its largest market by far.
ZARA has been identified as a trans-national retailer (Alexander & Myers 2000). On the surface, this may appear as a peculiar classification since they appear committed to a highly standardized operating formula which provides little opportunity for market responsiveness. Analysis of ZARA’s internationalization strategy would indicate otherwise (Bruce, Moore & Birtwistle 2004). While the brand image is highly standardized, its product development and merchandising strategy are very flexible and