zara - study case

FINAL PROJECT PRESENTATION

PRESENTED BY

CARRINE KEZIA AULIA

102183022

PRESENTATION OUTLINE• COMPANY PROFILE

• SPAIN GENERAL ENVIRONMENT

• CORPORATE SOCIAL RESPONSIBILITY

• STRATEGIC PLANNING

• COMPETITORS

• ORGANIZATIONAL STRUCTURE

• STAFFING, TRAINING & COMPENSATION FOR GLOBAL OPERATIONS

INTRODUCTION

ABOUT ZARA• Zara’s founder is the first richest person in Spain and the third richest

person in the world (2013). This person is Amancio Ortega• Zara is owned by Inditex Group

1975

1976

1985 NOW

Spreading stores in Spain

First store inLa Coruna, Spain Spreading to the world

1,700 stores, 82 countries

BRAND PORTFOLIOWOMAN, TRF, MAN, KIDS

WOMANCoats . Blazers . Dresses . Shirts . Trousers

Jeans . Skirts . Knitwear . T-Shirts . Studio

Lace . Shoes . Handbags . Accessories


TRFCoats . Jackets . Dresses . Shirts . Trousers

Jeans . Skirts. T-Shirts

Shoes . Handbags


MANCoats and Trench coats . Jackets . Beat Collection . Blazers

Suit . Trousers . Jeans . Shirts . T-Shirts . Sweatshirt

Knitwear . Wear to wear . Basics . Shoes . Bags

Accessories . Soft Wear


KIDS (0-14 years)Coats . Dresses . Cardigan and sweater

Sweatshirts . Shirts. T-Shirt

Skirts and Shorts . Jeans . Trousers

Activewear . Basics . Shoes

Handbags . Accessories . Underwear

SPAIN GENERAL ENVIRONMENT

HOFSTEDE’S CULTURE DIMENSION

HOFSTEDE’SCULTURE DIMENSION

• Hierarchical distance is accepted

• Those holding the most powerful positions are admitted to have privileges for their position

• The superior still need information from his/her subordinates while subordinates expect their boss to control them


• Spanish people in general, consider it is important to have rigid codes for everything.

• People tend to look for more stability in their life and work.

• 75% of Spanish young people wanted to work in civil service

• Confrontation is avoided


• Compared with the rest European countries (except Portugal) Spain is tend to be more collectivist.

• Compared with other areas of the world, Spain’s score is tend to be more Individualist

• Spanish quite easy to relate with (mainly) non-European (collectivist country), than other European countries.

• Teamwork among workers is natural and no need strong motivation from the superior in order for workers to commence in this act.


• Tend to be more feminime.

• It shows more tenderness.

• Avoid a direct and confrontation style, conflicts are resolved by compromise and negotiation.

• Managers are not expected to be so aggressive or competitive, but tend to pay attention to the human aspect.

HIGH-CONTEXT CULTURE

POLYCHRONIC Culture

DOING BUSINESS IN SPAINBusiness Values

• Avoid confrontation

• Trust and personal relationship are the keys of success

• Time consuming

• 10 really means 10:30 or 11.

• Negotiations may day longer than expected.

• Informal

• Hierarchical country – final decisions – most senior managers.

• Do not insist on written confirmation of a deal.

CORPORATE SOCIAL RESPONSIBILITY

ZARA’S CSR• The following are some of the objectives and actions:

o AT THE STORE

Save energy

The eco-friendly shop

Produce less waste, and recycle

Commitment extends to all our staff

An environmentally aware team.

ZARA’S CSRo WITH THE PRODUCT

Use ecological fabrics

Organic cotton

o IN TRANSPORT

Use biodiesel fuel

o ANIMAL WELFARE POLICY

o FRAGRANCES

ZARA’S CSRAugust 2011

• Zara is being accused by Brazilian Ministry of Labor of Human Rights Violations

• Poor working condition – 14 hours per day

• After two weeks, Inditex published new measures for factory in Brazil

• Agreement was reached in Dec 2011 with compensation of 1,8 million dollars

ZARA’S CSRNovember 2012

• Zara committed to eliminate all releases of hazardous chemicals throughout its products by 2020 (Greenpeace’s Detox Campaign)

•“Greenpeace welcomes Zara’s commitment to toxic-free fashion. If the world’s biggest fashion retailer can do it, there’s no excuse for other brands not to clean up their supply chains and make fashion without pollution,” said Martin Hojsik, Detox Campaign Coordinator at Greenpeace International.

STRATEGIC PLANING

MISSION STATEMENT

"To hold big market share among young and

fashion conscious city dwellers in

all continents by quickly respond their demand."

BUSINESS OBJECTIVE

To be the number one supplier of affordable

fashion in the world and to continue its expansion

globally adding another 520 new stores and

increase market share of Zara by 5% and sales by 10%

particularly in the Asia/ Pasific region by 2016.

SWOT ANALYSIS

•High brand value•Vertically integrated retailer•Strong distribution channel•Spot emerging trend and react quickly•Stores around the world (1.700 stores in 82 countries)•High quality at reasonable price•Customers' comment and feedback•Prime retail locations•Do CSR•High productivity (20 Factories in 5 countries)

strengths

SWOT ANALYSIS

•High cost (high rent in expensive location)

•Lack of advertising

•Online presence

•Limited stocks - stocks run out quickly

weaknesses

SWOT ANALYSIS

•Expansion plan

•Strong brand image

•Online market

•Growing apparel market in Asia

•Diversification Opportunities

(Zara Home, plus sizing, add new product,

e.g. accessories - shoes, bag, etc)

opportunities

SWOT ANALYSIS

•Strong competition

•No advertising campaign

•Euro centric production

•Fluctuation in exchange rate

•Defeated by competitor (online shop)

threats

STRATEGIC CHOICE

• Improve online shop function, process handling, shipping, and return service (e-commerce strategy)

• Multi functional online shop (dress room option)

• Iphone and Ipad application

• Social media (Facebook, Twitter, Pinterest)

• Complete stock rotation every 15 days

• High development of new designs in 14 days

• Launches around 10.000 new products each year

specialization

STRATEGIC CHOICE

• Cost-price leadership

• Fast rollover of new product

• Strong branding

differentiation

STRATEGIC CHOICE

• Demographic segmentation

o Women/ Men

o Aged 18-40

o Mid-range income

• Lifestyle segmentation

o Interested in fashion trends

o Small and plus sized shaped (6-18, XXS to XL)

segmentation

STRATEGY IMPLEMENTATION• Zara is focusing on Internet online marketing opportunities such as e-commerce strategy and social media to promote traffic on zara.com as well as attracting visitors to the online shop.

• Zara’s online shop currently operating in 22 countries, included 2 countries in Asia, China and Japan (Still expanding)

STRATEGY IMPLEMENTATION

COMPETITIVE ADVANTAGES

•Expanding geographic market without sales forces and huge capital invest.

•Shoppers can purchase products 27/4 (No time limit).

•Another marketing channel (Customer reviews and testimonials).

•Broader Zara's potential customer base.

•Greater flexibility to promote without expensive printed display material.

POSSIBLE STRATEGY•Exporting

•Franchising (The Stockmann Group - Finland 2013, Mitra Adi Perkasa - Indonesia)

•Off shoring (Bangladesh, Turkey, Vietnam, and Portugal)

•Joint Ventures (Tata Group - India 2010)

•Wholly Owned Subsidiaries (Italy, Russia, and Japan)

COMPETITORS

US

1984

US

1969

SPAIN

1984

UK

1964

SWEDEN

1947

ORGANIZATIONAL STRUCTURE

ORGANIZATIONAL STRUCTURE

• Integrated global structure

o Shorter lead times

o Decentralized decision making

• Vertical integrated structure

o Manages all design, warehousing, distribution, logistic

o Flexible in the variety, amount and frequency

• Integrated global structure

o Shorter lead times

o Decentralized decision making

• Vertical integrated structure

o Manages all design, warehousing, distribution, logistic

o Flexible in the variety, amount and frequency

To hold big market share among young and fashionconscious city dwellers in all continents by

quickly respond their demand

To hold big market share among young and fashionconscious city dwellers in all continents by

quickly respond their demand

STAFFING, MOTIVATING & COMPENSATION


• They “sell” their strong brand image to attract their future employees

• Makes people “needed”, through their contribution

• They “sell” their strong brand image to attract their future employees

• Makes people “needed”, through their contribution


• Store managers – 70% of salary come from commission

• Individual bonus = the success of the team

• Training program and avenue for career development

• Health insurance & retirement plan

• 15% discount

• Annual trip/ gathering

• Tuition reimbursement

• Business travel

• Store managers – 70% of salary come from commission

• Individual bonus = the success of the team

• Training program and avenue for career development

• Health insurance & retirement plan

• 15% discount


• Tuition reimbursement

• Business travel

globally


• Employee’s card (25% discount)

• Management development training program

• Rapid career progression


• Reimbursement (transportation and phone call)

• Health insurance and retirement plan

• Hand-phone, car, private driver, apartment for expatriate managers

• Employee’s card (25% discount)

• Management development training program

• Rapid career progression


• Reimbursement (transportation and phone call)

• Health insurance and retirement plan

• Hand-phone, car, private driver, apartment for expatriate managers

zara indonesia

THANK YOU

zara - study case

Marketing