Group ENathaniel BOUABDALLAH| Yijun CHEN | Mengyun ZHANG

Sergio MARTINEZ | Johnny FLAMENT | Clément BIRAUD

Outline

I. Zara’s International BackgroundII. Cultural TensionIII. NegotiationIV. Conclusion and RecommandationsV. Bibliography

1975: Zara opens its first store in the centre of La Coruña, Spain.

I. Zara’s International Background

Initial Strategy at the 80’s.

Coverage of Domestic Market.

Opening stores in big cities. (Over 100,000 inhabitants)

Changes in consumer behavior from domestic costumers.-Spread time in traveling and education, less in clothes.

Key factor for Zara to succes, it brought:

-Potential economies of scale.-Homogenisation of consumption patterns accross countries.-Abolition of barriers to export.

1986: Spain’s entry to European Union.

I. Zara’s International Background

Oporto, Portugal.

1988: First store out of Spain.

1997-2005: Agressive expansion.-1997: Israel.-1998: Lebanon, Middle East, United Arad Emirates, etc.

Fashion Capitals: Brand Presence. -1989: New York.-1990: Paris.-2001: Milán.

I. Zara’s International Background

Zara’s Philosophy: « National borders are no impediment to sharing a single fashion culture. »

-Presence in 88 different countries.-More than 2,000 Zara Stores.-One of the main leader of the retail fashion industry.

(Main competitors: H&M, GAP, Uniqlo, Primemark)

2015:

II. Cultural Tension

Joint venture: ZARA &BITI

Culturally & Geographically

Distant

Heavy Investment in Land

37-70% Failure

National Culture Organizational Culture

II. Cultural Tension

Organizational Culture

• Means VS Goal

• Internally VS Externally

• Easygoing VS Strict

• Local VS Professional

• Open System VS Close System

• Employee VS Work

• Degree of Acceptance of Leadership Style

ZARA &BITI

• Decision Making Process

• Communication Flow

II. Cultural Tension

• Give Everyone a Voice

• Protect the Most Innovative Parts

• Train Everyone in Key Norms

• Maintain Heterogeneity of Workforce

II. Cultural Tension

Masculinity

“Herbivore men” 61% of men in their 20s and 70% of men in their 30s

II. Cultural Tension

Teenage Markets

-”Six pockets"

-Fashion pursuers

-The speed new products and fashions spread among the teenage population.

Promotion Channels

-Cooporate with magazines

-Engage Japanese Idols as their spokesmen.

III. Negotiation

Competition• Dynamic markets• Importance of innovation,

variety and quality of products

Social context• High degree of competition

between companies or individuals

• Work relations based on a long term perspective

Negotiation• Cultural differences (time,

communication, emotions, mentality)

• Team orientation, strategy

Potential obstacles for business in Japan

III. Negotiation

• Face to face negotiation

• Slow decision-making, several meetings

• Use of indirect communication

• Collectivism, decisions in teams (consensus)

• Build long term relationship and trust

• Facilitate harmony and avoid conflicts

• Body language, silent moments, contacts, gestures…

• Flexibility in case of problems, renegotiations

• Abilities to listen and collect informations

• Japanese have difficulties to say « NO »

• Written contracts

• Japanese prefer a win-win situation

Japanese’s negotiation style

III. Negotiation

• Establish objectives : Contract vs Relationship

• Choose relevant attitudes : Win/lose vs Win-Win

• Communication form : Direct vs Indirect

• Group decision, organization : One leader vs Consensus

• Level of risks : High vs Low

Major stakes in a negotiation process

YeldingLose-Win

IntegratingWin-Win

InactingLose-Lose

Contending

Win-Lose

III. Negotiation

What ZARA should do: the different strategies

Concern for one’s own outcome

Conc

ern

for o

ther

par

ty’s

outc

ome

Low High

Low

High

Both parties make compromises to gain advantages together. ZARA and the Japanese company are collaborative and each party wins.

ZARA can persuade the Japanese company to make compromises. ZARA has a better bargaining power and “wins” the negotiations,

III. Negotiation

• Be well-prepared• Identifying the differences

between Spanish style and Japanese style

• Knowing clearly its objectives and its needs

• Knowing the Japanese objectives, needs and wants

Before the negotiation

•Tend to give more time and effort to negotiation preliminaries with Japanese negotiators

•Consider concessions, then make and seek concessions

•Suggest alternative proposals and listen to offered suggestions.

•Adopt a formal posture and move to an informal stance

•Be culturally neutral and sensitive

During the negotiation • Wait for closing the

discussion• Be patient to sign the

contract• Prepare an alternative plan

and consider a mediation with the Japanese company

After the negotiation

What ZARA should do: the negotiation process

III. Negotiation

Poor prepared

Failing to pay

attention to

Japanese negotiator

Thinking that it is

just a local

negotiation

Being too impatient Gloating

What ZARA should avoid

IV. Conclusion and Recommendations

2) Management of the Tensions in the Joint Venture

Joint venture with BITI to prevent: heavy investment in land & the cultural/geographical distance

To avoid the failure Zara should focus on two aspects: National Culture and Organizational Culture

The two main points of tensions would be: • The Japanese employee-oriented system VS

the Spanish work-oriented system• The Japanese closed system VS the Spanish

open system

Our recommendations are:• To faciliate communication: Free talk +

English• To keep its core value: Global Offer• A new joint venture culture: same training• To Maintain heterogeneity of the workforce

1) Negotiation of the Joint Venture Agreement

Because of difference of culture intime, communication, emotions, mentallity…

Our Recommendations:

For the Negotiation Zara should :• Be well prepared and implicated• Pay attention to Japanese

negotiators• Target a win-win agreement• Be patient

IV. Conclusion and Recommendations

3) Management of Cultural Differences in the Fashion Market

Our Recommendations:

Targeting strategy• Target the Japanese Youth especially the « Herbivore men »• Fashion sensitive and own the purchasing power

Promotion Strategy:To attract young Japanese and win their loyalty Zara should:• Advertise or cooperate with fashion magazines• Engage Japanese Idols as their spokesmen.

V. Bibliography

-Lopez, C., & Fan, Y. (2009). Internationalisation of the Spanish fashion brand Zara. Journal of Fashion Marketing and Management: An International Journal, 13(2), 279–296.

-Castro, I. (2003). Zara Japan Corporation. Boletin Economico de Ice-English, 2770, 98–101.

-Lopes Z. and Fan Y. (2009), "Case Study: Internationalisation of the Spanish Fashion Brand Zara", Journal of Fashion Marketing and Management Vol. 13 No. 2, pp. 279-296.

-Meyer E. (2015) , "When Cultural doesn't Translate", Harvard Business Review, pp. 66-72.Zhiqing J., Shin’ya N. and Junzo W. (2014), "Luxury Fashion Brand Image Building: the Role of Store Design in Bally and Tod’s Japan", Management Decision Vol. 52 No. 7, pp. 1288-1301.

-Castro, I. (2003), “Zara Japan Corporation”, Boletin Economico de ICE, Vol. 2770, pp. 95-8.

-https://tortora.wordpress.com/2009/11/18/zara%E2%80%99s-organizational-structure/

-http://www.slideshare.net/JakeRoviralta/zara-final-pdf

-Buell, B. (2007). Negotiation Strategy: Seven Common Pitfalls to Avoid. [online] Stanford Graduate School of Business. Available at: https://www.gsb.stanford.edu/insights/negotiation-strategy-seven-common-pitfalls-avoid [Accessed 25 Oct. 2015].

-Business.qld.gov.au, (2014). Strategies for negotiating | Queensland Government. [online] Available at: https://www.business.qld.gov.au/business/running/managing-business-relationships/negotiating-successfully/negotiating-strategies [Accessed 25 Oct. 2015].

-Kwintessential.co.uk, (n.d.). Cross Cultural Negotiations | articles | cultural services. [online] Available at: http://www.kwintessential.co.uk/cultural-services/articles/cross-cultural-negotiation.html [Accessed 25 Oct. 2015].

V. Bibliography

-Lewis, R. (2014). What You Should Know About Negotiating With Japanese. [online] Business Insider. Available at: http://www.businessinsider.com/negotiating-with-japanese-2014-5?IR=T [Accessed 25 Oct. 2015].

-Salacuse, J. (2004). Negotiating: The Top Ten Ways that Culture Can Affect Your Negotiation | Ivey Business Journal. [online] Iveybusinessjournal.com. Available at: http://iveybusinessjournal.com/publication/negotiating-the-top-ten-ways-that-culture-can-affect-your-negotiation/ [Accessed 25 Oct. 2015].

-Sherwin, D. (2013). 12 Essential Negotiating Strategies For Consultants. [online] Co.Design. Available at: http://www.fastcodesign.com/1671787/12-essential-negotiating-strategies-for-consultants [Accessed 25 Oct. 2015].

-Socol, C, Marius, M, & Aura-Gabriela, S 2010, 'The Impact of the Culture on the International Negociations: An Analysis Based on Contextual Comparaisons', Theoretical & Applied Economics, 17, 8, pp. 87-102, Business Source Complete, EBSCOhost, viewed 25 October 2015.