Strategic Business Assignment 2 
I/ Introduction:
Satisfying customer needs has always been the priority task of any business. However this task has become harder as ever since manufacturing shifts to standardization. Today not only the core product or service is matter to customer, but also the value that go with it. This explains why firms are desperate to find the competitive advantages that can help them produce such value and differentiate themselves from competitors. In order to create competitive advantages, firm need to build up business level strategies step by step through a strategic direction. Follow that, this report will attempt to critically evaluate strategic direction of Zara, the world biggest retailer by analyzing its main strategies to achieve competitive advantages and its current market position in the UK market.
II/ Discussion:
1/ Brand portfolio:
Zara, established in 1975, is flagship of the Spanish retail group chain Inditex. In 2006, it surpassed the Swedish retailer Hennes & Mauritz with an impressive sale of $8.15 billion and become the world leading fashion retailer (Tiplady, 2006). Zara main merchandise is women s’ clothing and accessorizes. The retailer sets a mission to provide customer exclusive choice of fashion offering by its quick turnover of stock (Inditex, 2013). BCG matrix will be used to present Zara market share and growth.
BCG matrix created by Boston Consulting Group is one of the most popular tools to analyze brand portfolio and allocate resources between business units (West, Ford and Ibrahim, 2010). It defines four positions a business can attain in a certain market or segment based on its market share and market growth rate. Of which, “problem child” or question mark describes potential businesses that need to be focused and invested; “star” indicates businesses at the successful state where they achieved high level of both market growth and market share; companies gradually become “cash cow” once the growth rate of their market start to slow
Satisfying customer needs has always been the priority task of any business. However this task has become harder as ever since manufacturing shifts to standardization. Today not only the core product or service is matter to customer, but also the value that go with it. This explains why firms are desperate to find the competitive advantages that can help them produce such value and differentiate themselves from competitors. In order to create competitive advantages, firm need to build up business level strategies step by step through a strategic direction. Follow that, this report will attempt to critically evaluate strategic direction of Zara, the world biggest retailer by analyzing its main strategies to achieve competitive advantages and its current market position in the UK market.
II/ Discussion:
1/ Brand portfolio:
Zara, established in 1975, is flagship of the Spanish retail group chain Inditex. In 2006, it surpassed the Swedish retailer Hennes & Mauritz with an impressive sale of $8.15 billion and become the world leading fashion retailer (Tiplady, 2006). Zara main merchandise is women s’ clothing and accessorizes. The retailer sets a mission to provide customer exclusive choice of fashion offering by its quick turnover of stock (Inditex, 2013). BCG matrix will be used to present Zara market share and growth.
BCG matrix created by Boston Consulting Group is one of the most popular tools to analyze brand portfolio and allocate resources between business units (West, Ford and Ibrahim, 2010). It defines four positions a business can attain in a certain market or segment based on its market share and market growth rate. Of which, “problem child” or question mark describes potential businesses that need to be focused and invested; “star” indicates businesses at the successful state where they achieved high level of both market growth and market share; companies gradually become “cash cow” once the growth rate of their market start to slow
References: Baxter, J. (2004) Clothing Retailing Key Note Marketing Report. Available at: https://www.keynote.co.uk/market-intelligence/view/product/10551/clothing-retailing (Accessed: 22/11/2013) BCC (2013) Zara-owner Inditex’s profits rise by 22% Challinor, S (2013) The Competitive Environment [Lecture to BA Marketing and management Year 3]. 22/10 Ferdows, K., Lewis, M, A and Machuca, J, A, D (2005) Zara 's Secret for Fast Fashion Inditex (2013) Timeline. Available at: http://www.inditex.com/en/who_we_are/timeline (Accessed: 20/11/2013) industry—the case of Zara, a fast fashion retailer’, Journal of Economic Geography, 8(1), pp Porter, M, E (1980) Porter ‘s Generic Strategies [Online]. Available at: http://www.marketingteacher.com/lesson-store/answer-generic-strategies.html (Accessed: 19/11/2013) Porter, M, E Porter, M.E. (1980) Competitive Strategy: Techniques for Analysing Industries and Competitors. New York : The Free Press. West, D, Ford, J and Ibrahim, E (2010) Strategic marketing: Creating Competitive Advantage. 2nd edition. New York: Oxford University Press.