Running Head : ZARA

International Busines Environment



Introduction3

Background4

Nature of industry in which Zara operates5

Business Model: A model for success in the retail industry8

Market share of Zara (Domestic and international)10

Marketing Mix of Zara11

Key factors in determining the company's international business activity13

Diversification in the International Marketing Strategies16

Factors of influence in the diversification process17

Market Entry Strategies18

References21

International Busines Environment

 Introduction

Zara is one of the largest international fashion companies, third largest garment brand in the garment industry headquartered in Spain. Zara has more than 2500 stores in around 72 countries. Zara's speciality is that it keeps coming up with new products in a very short time frame. They are known for bringing 10000 new designs every year which is a record. They have also made the hard target of running the productions in Europe and not in the third world countries unlike almost all the other brands, still just a small part of their production is in Asia because of the longer shelf life there.

It has been unique when it comes to marketing its product; it rather spends on opening new outlets. Their brave and out of the box experiments have made them one of the most innovative retailers of the world. (Burghausen 2002, pp. 92-9). Management of Zara took entrepreneurial decisions then, which most of the companies in the industry couldn't do. Such decisions have led the company to enormous success but that is only possible after an in depth thought process which requires analysis of environment on both micro and macro levels, rational logical decision making process providing the plan of action and the internal analysis as well.

Zara successfully attained all its targets and has expanded further since 2008; the ongoing progress is calling for further growth. This growth has been possible due to the in time and efficient measures taken by the management as they incorporated technology and tools in the processing pretty early. (Walters 2006, pp. 75-94).

Background

Inditex group of companies Started with its fashion venture named Zara in 1975, which has became a renowned fashion icon over the years. It has not only generated massive profits for the group but has made its mark in the customers. (Murphy, 2008). The majority of the market share enjoyed by Inditex is due to Zara. A calculated estimate shows that 80% of the total revenue of Inditex is contributed by Zara. Zara is originally Spanish based and has proved itself as a market leader in positively providing services to its customers. Its been doing business for decades and still the customer's reliance is a sign that its going to do well in the future as well, provided that fashion is a volatile sector in terms of customer preference. (Brand Watch Zara, 2003).

Zara's initial approach was to start with low price products which were pale replicas of high end fashion products. This approach made Zara a smashing success and in a very short time allowed it to expand all around Spain. Zara's international competitors are H&M, Gap and Benetton, and surprisingly with its comparatively low ...