Overview of Zara
Discuss about the Central and Peripheral Brand Associations.
The industry of clothing and apparel is a very prestigious and innovative industry with the emphasis constantly on innovation of the products. The companies involved in the clothing industry need to do thorough research about the choices and preferences of the customers and how the changes are affecting their choices and preferences in the coming years. The company Zara focuses on globalizing its services and products on a global platform. The company Zara also indulges in the process of innovating its products and services in such a manner that the customers are lured into opting for the Zara brand. The brand value attached to the Zara products is immense and the customers prefer buying the Zara products to any other apparel brand. The prime reason for the Zara brand being so productive and successful is that the company has done extensive groundwork and research into the aspects of consumer satisfaction and consumer behavior. The report analyses the essence of the innovation and the styles of management styles of the leadership of Zara. The Zara Company engages the process of innovation and planning into the new styles and designing of the products, which leads to the excellent production of the garments and the apparels in the market. The research done by the company includes the market survey and the launching of new products based on the recommendations and the feedback of the customer. The report analyzes the prospects of globalizing the products and internationalizing the brand so that the customer base is expanded and increased to an enormous level. The Zara company has made a name for itself in the global platform on the basis of its ethics and innovative marketing strategy applied in its products. The report also recommends the areas where the company can venture in the future to increase its prospects and revenues.
Zara is a Spanish fashion company, which specializes in manufacturing clothing and accessories for the people. It is based in Arteixo Galicia in Spain. It was established in 1975 and its founders were Amancio Ortega and Rosalia Mera. The Zara fashion brand is the premier brand of the inditex group, which is the largest retailer of apparel in the world. The fashion group also has the ownership rights of the brands such as Massimo Dutti, Bershka, Pull&Bear, Stradivarius, Zara Home, Oysho and Uterque.The Zara brand as of 2017, had ownership rights of up to 20 clothing collections in a year. The first Zara showroom was inaugurated in 1975 in the town of Galicia in Spain. The founder of the company Ortega, named the company as Zorba and the inspiration for the naming of the company was the Spanish film Zorba the Greek. When he realized that there existed a bar having the same name, he decided to rearrange the letters of the newly founded company and changed it to Zara (Hanslin and Rindell 2014). The initial products included the low budget replica of famous and costly clothing wear. The owner opened numerous branches of the company in different cities of Spain.
Zara’s Expansion and Growth
The 1980s saw the change in plan for Ortega with subtle changes made in the aspects of designing, manufacturing as well as distribution of the products to decrease the manufacturing time and expedite the process of sending the apparel instantly to the showroom from the manufacturing hubs (Gamboa and Goncalves 2014). This process was known as instant fashion. The changes, which were made, included the inclusion of designers and technology for the manufacturing of the clothing ware instead of employing normal people to do the same. The company understood and recognized that the dynamics of doing business was changing in the modern world and therefore, the company internationalized its expansion policies in 1988 when it expanded its services to Porto in Portugal. By 1989, it had ventured into the United States (Swoboda and Pennemann 2015). It expanded into France by 1990s. Within a decade, Zara had expanded its global business to the countries such as Mexico, Greece, Belgium, Sweden, Japan, Singapore, Romania, Phillipines, Costa Rica, Indonesia, South Korea, India, South Africa and Australia (Huertas-García, Lengler and Consolación-Segura 2017).Zara was responsible for introducing the RFID technology in their stores in 2014. The RFID or the Radio Frequency Identification incorporates the electromagnetic technological fields to self-identify and keep track of all the tags attached to the objects. The energies from the nearby RFID is collected by the passive tags and the reader are interrogated into the waves. Zara specializes in providing the apparel ware for the men, women and the children. The supply chains are highly responsive and new products are shipped twice a week by the organization. The products take a total of two weeks to reach the stores after they are designed and manufactured. The total annual production of Zara is over 450 million items a year (Talay, Townsend and Yeniyurt 2015).
Internationalization can be defined as the outsourcing of the business to foreign countries in order to maximize the profits and revenues for the company. The company internationalizes its ventures out of its country of origin in order to expand its customer base and increase its services and businesses in the outside countries. The aspect of globalizing the business is to the foreign countries involve the outsourcing of the products as well as the services to the foreign countries mainly due to the purpose of expansion of business with the intent to maximize the profits as well as the supplying the products on a worldwide scale. The expansion of the business can also result in the making of the countries interdependent upon each other. This interdependence can cater well for the global brands as they can trade freely amongst the friendly countries. The only barrier in front of them is the trade agreements and the trade blocks, which differ from one country to another (Yang et al., 2017). Zara was able to maximize its venture in the foreign countries from a very early period when many countries were not even able to understand the concept of globalization in the true essence of the term. The founder of the organization Amancio Ortega emphasized on the aspect of distributing the materials on a global platform. In order to do this, the company decided to go for zero advertising. Zara developed a new policy wherein they decided upon devoting just one week for the designing and manufacturing of the product as compared to the six month taken by the other apparel companies. The money, which is saved from the policy of zero advertising, is the n utilized in the other aspects such as opening new showrooms. Zara established its own factory in La Coruna in Spain in the 1980s. It devised and followed a policy of Just-in-time (JIT) system. This system enabled the company to be self-sufficient in terms of the availability of materials in all the stages of production, complete the products as well as distribute the products to the stores globally within the span of a few days (Coelho, Rita and Santos 2018). The company manufactures majority of its products within the close proximity of Spain and areas in and around Spain while the clothes which require a lengthy amount of shelf life are outsourced to the countries where manufacturing costs are cheap such as the countries in Asia.
The Benefits of Internationalization and Globalization
There are many reasons for the internationalism process of not just Zara but many other countries as well. Zara has established itself as a global brand and it engages in manufacturing the apparel and clothing material and supplies them throughout the world on a large scale. This is done mainly because the company focuses on maximizing its revenues and generates profits through the efficient allocation of the resources and revising the costs and revenues in such, a way that the organization is able to relocate the revenues so that the organization manages the money, which is saved in some other ventures (Vriens and Martins Alves 2017). Globalizing the organization’s products also means that the organization is able to cater to a wide array of customers in a global scale. The customers who are located in different parts of the world are able to buy the Zara apparel and the clothing products based on the globalization process (Park 2015). The Zara organization also indulges in the allocation of the manufacturing of some of its costlier products to the countries of Asia where the cost of production is lower in comparison to the cost of production in the western countries. The manufacturing of the products in Asia also leads to the saving of the company’s capital resources because of the availability of cheap labor in Asian countries. Zara has invested heavily in the Asian countries such as China, India and the Vietnam (Ci, Park and Kim 2017). These countries have cheap labor as well as a vast and diverse population. Therefore, the prospects of doing business in these countries are immense from the perspective of a global retailer giant. The fact that Zara does not invest in advertising makes the company use its resources in the aspects of opening new stores and investing in the manufacturing sectors. Zara has also implemented a relatively innovative way of doing business by shortening the shelf life of its products and the shortening of the shelf life of its products implies that the company has a greater chance of registering huge profits as the time required for the products to be sold off to the customers decreases (Graffigna and Gambetti 2015). Zara follows a strategy of modifying the items according to the tastes and preferences of the customer. This is done by consciously monitoring the customer’s fashion changes. Zara maintains the range of basic designs, which are carried over through all the years. The other companies have the opposite policies of removing the clothes and apparels, which stays in the shelves for more than four weeks (Cho and Fiore 2015).
Zara’s Business Model and Innovative Strategies
The globalizing of a product entails the leadership with the responsibility to gather information about the culture of the country where they are intending to establish their manufacturing plants as well as sell their products. The organizational leadership must be fully acquainted with the cultural norms of the people who will be their customer base. In order to understand the culture of the new country, the organization must be fully well versed in the dominant culture of the country and must respect the different cultures and tradition of the country (Michel and Donthu 2014). The negotiation skills of the leaders of the organization are fully assessed and analyzed when the organization ventures out into the new country as the basic criteria of negotiation is to assist in the building of the relationship with the citizens of the country. The organization also needs to make some important changes in the style of decision-making as the decision-taking pattern of one country might be very different from the requirement of another country (Delgado-Ballester and Fernandez Sabiote 2015). The management styles can vastly increase the profitability of the company. The management leadership can make subtle changes about the new changes, which they are going to implement in the country they are venturing into. These changes can increase their revenues in the country where they have decided to venture into.
The reason behind the appalling success of Zara is the fact that the company has made some very innovative changes in its policy of doing business. These tweaks in its style of doing business have facilitated the company to maximize its profitability within a short span of time. Innovative strategies followed by Zara include the introduction of Fast Fashion. The Fast Fashion is the modern usage of the fashion retailers to introduce the designs, which are showcased in the fashion walk concerts and introduce the fashion statements straight into the stores to capture the attention of the customers. Zara has been able to incorporate the rapidly changing fashion trends in the fashion industry and has filled the gaps which existed between the common people and the fashion industry. The company introduces new designs in the fashion industry and quickly puts them up for sales to capture the attention of the people. This results in the profit maximization of the company. The common notation used for Zara is that they supply the freshly baked clothes to the common people. Zara also focuses on manufacturing fewer quantities of products and focuses more on the qualitative aspects of the products. This enables the company to attach a touch of elegance and brand element in their products (Dawson and Mukoyama 2014). The status attached to the Zara product is immense in the society.
Conclusion
The benefits from expanding its services and production on a global platform enables the company Zara to interact with the global audience and gather information regarding the latest trends in the fashion industry. The Zara Company incorporates the latest demands and requirements of the customers and incorporates those demands in the new products, which are going to be launched by the company. The company also invests heavily in the designing and the manufacturing of the products and the research done to implement a new design is immense among the employees working with Zara. The process of supplying new designs is done on a very short time so that after the launching of a new design, the products are immediately sent to the people for the sale of the products. This is done in the gap of a few weeks. The procees of expediting this entire process comes at a cost. The cost is that the Zara Company follows a policy of zero advertising. Where the other retailers are investing heavily on advertising and hiring new celebrities to promote the products, the Zara Company does the entire opposite (Azevedo and Sanchez 2015). They focus more on the designing and the manufacturing of the products. In the current age, the Zara Company is facing a huge amount of challenge from the online shopping industry. The e-commerce industry has grown in leaps and bounds and there is an ever-growing threat to the Zara Company to tackle the threat of e-commerce. The company has to put forward an innovative plan in order to overcome the challenge of e-commerce industry (Islam and Rahman 2016). The Zara Company is known for innovating ideas so it would not be a challenge for the company to overcome the challenge. The company has investments in many countries so it would not be a problem to try out different ideas and strategies in different countries. The benefit of doing business in different countries is that one idea, which has emerged from a particular country, can be incorporated into another country or more than one country (Mayrhofer and Roederer 2016). The viability of the exchange of ideas increases with the number of countries where Zara is operating. Zara being a global brand, therefore, it enjoys the privilege of having the trust and goodwill of the people who hold the company very highly. It is for this reason that the company is taking a great risk by not investing in the aspect of advertising its products.
It would be better for the leadership of Zara to try out new innovative ideas in the long run such as expanding their availability in the online sector. The Zara Company also has the added advantage of being a global brand, so the decision to venture into the online marketing arena will not be a difficult choice for the company as the company has the trust and support of the people worldwide. The company also has a global presence, which entails the company with the facility of procuring the materials from its manufacturing plants, which are located in different parts of the world. The zara company can also venture out in the area of providing sportswear to the athletes and the sports team. Limiting itself to the fashion apparels limits the scale and magnitude of its operations. Therefore, it is important for the Zara Company to venture out into the other unexplored territories and try out new innovating ideas. The Zara Company can also increase its revenues by selectively merging with the local companies, which are offering excellent online retailing services. The mergers would allow the local companies to get the financial assistance from the global brand Zara and the Zara company can learn about the nuances of doing online trade. These recommendations can be fruitful only if the company engages in the policy of innovating its style of doing business. The Zara Company can also include the common and decorative styles and attires of ethnic communities such as the ethic wear of the Chinese, the Japanese, the Indians, and the Vietnamese. These incorporations will allow the company to be versatile in its approach and cater to a wide array of audience and customer base. The increase in the customer base would result in the profit maximization of the Zara Company and result in the collection of huge revenues.
Conclusion
From the above discussion, we can conclude that the Zara company is an epitome of innovation and creativity. The company indulges in providing the high quality apparel and designer clothing to a wide number of customers. The company also promotes its products by doing quality assessment and monitoring of its products sold to the customers. The company has expanded its services to many countries worldwide so much so that the company is now a reputed global brand, which despite having invested nothing in the advertising, has still managed to salvage its position in the global stage. The company has put forward a number of innovative policies and strategies, which enable the company to earn huge revenues in terms of revenues as well as retention of customer base over the years. The company also indulges in the policy of providing quality services to its customers by limiting the number of products manufactured. The company can incorporate the services of those companies who are doing profitable business in the online marketing arena by entering into merging alliances with them. The company also engages in the process of limiting its manufacturing of the products. Doing this enables the company to manufacture quality products and supply those products to the global customers. The company of Zara also has a very innovative way of doing business. They have introduced the policy of Instant Fashion. This aspect of Zara enables it to provide the products to the customers on an immediate basis. Where the other companies take months to dispatch their products, the Zara company does so in a matter of a few weeks. The customer satisfaction is immense when analyzed for Zara products. This is the reason why Zara is considered such a valuable global brand.
References
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