Zara Case Study Analysis - Solution and Example

A case study of different brands helps gives us an idea about the brand, their marketing and advertising, operations, and much more. Case studies also get assignment help us understand a brand better and how they became successful in the market. In this case study, I will discuss the fashion brand Zara and provide a complete analysis on it. Read on to find out more.

Zara – An Overview

Zara is a Spanish apparel brand that was founded in the year 1975 in Galicia in Spain. It started out by manufacturing apparel that resembled the labels of high street fashion brands at that time. By the year 2017, Zara had managed to establish itself as the number one apparel retailer of the world. It manufactures products related to fast fashion like apparel, perfumes, accessories, swimwear, innerwear, beauty and even household products. Zara is as of now, owned by a multinational Italian company called Inditex.

The stores of Zara have products for both men, women and children. They also have their own brand for household products called House of Zara. In the year 2021, Zara opened its first beauty store in Spain named Zara beauty.

The company has also sold approximately 70 million products in the same year. The name of Zara today is synonymous with high street fashion. Young people are the major consumers of Zara and the brand is acclaimed worldwide. Popular media and entertainment icons, celebrities and artists also endorse the brand from time to time.

Zara has however often come under flak on social media platforms due to alleged rumors of child abuse and worker exploitation in their factories. Social media users alleged that Zara had sweatshops in third world countries like Bangladesh and Pakistan, where workers were not even paid the basic minimum wages. However, Zara has always been quick to respond to these allegations, ensuring their image as one of the top fashion retailers of the world never get tarnished.

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Zara Business Model

Zara always had the staunch concept of launching medium quality fashionable and trendy clothing at affordable prices to its consumers. It tried to replicate the designs of other high-end fashion brands and became popular, mostly due to their prices. Zara also has a team of designers who work on intricate designs for their fashion items and merchandise.

The entire process of designing, sourcing, manufacturing, distributing and retailing their products is carried out in a smooth and periodic manner. Zara has been always quick to address any kind of problems or issues in essay assignment help that they faced within their business model. This has largely contributed to Zara’s success of today. Down below, let’s have a look the factors that Zara incorporates in its business model.

Short cycling time

Zara focuses on a short cycling time for their products. There were news reports recently that Zara changes it designs every two weeks. This helps to keep their customers interested in whatever they have to offer.

Small quantities

They also focus on manufacturing their products in small quantities so that they do not get any kind of overstock or suffer losses. This also makes sure that they sell out almost every single one of their products.

Extensive variety

Zara spoils it’s customers for choice. They believe on manufacturing a wide range of variety and designs so that customers can choose easily what they want. Thus, they are able to retain their customer’s attention and make them choose Zara over other brands, due to the sheer variety and choice that consumers get.

Active marketing strategies

Zara also focuses on implementing an active marketing strategy so that their customers get to know about their latest offers, deals and collections at all times. Zara is also popular on social media sites, thanks to their extensive social media marketing strategies.

Zara also has designers and fashion forecasters who work hard to predict upcoming trends. Their designers research and gather information about the current fashion trends and keep an eye out for celebrity outfits. Thus, they are able to gather information for their designs and match the preferences of the consumer.

Zara also follows a specific color shade for every season. It offers customers the option to choose their apparel according to the season they are in. For example, if you are in summer shopping at a Zara store, you will find clothes of lighter shades like yellow, pink, off white, etc. However, if you walk into a Zara store in winter, you will be finding darker shades of blue, red, purple or green. Thus, Zara follows a very specific fashion and style statement throughout the seasons.

Zara SWOT analysis

A SWOT analysis helps us find out the Strengths, Weaknesses, Opportunities and Threats of a company. Down below I have provided a complete SWOT analysis of Zara.

Strengths

Zara focuses on manufacturing unique and trendy designs for its customers. They have a team of talented designers who work hard to ensure that customers love their designs. They also focus on manufacturing clothes that have elegant designs, superior materials and outstanding finishing and stitches. Zara also creates a list of 40,000 designs annually.

Zara is also present in a number of countries worldwide. It has over 2270 stores in over 90 countries. This helps Zara to have a presence unlike no other fast fashion brand in the world. It has also been ranked as the number 53 best fashion brand in the world, surpassing other famous luxury brands like Tommy Hilfiger and Lacoste.

Weaknesses

During the year 2020, Zara spent about a fraction of its revenue on advertising. This can prove to be detrimental in a market where consumers rely on constant spooling of information and data to be aware about the different brands in the market. If another fashion brand starts an aggressive marketing and advertising campaign, Zara stands to lose out on critical market shares in different countries.

Zara also does not follow a standard concept for their designs. They believe in manufacturing unique designs for its customers. Thus, Zara’s products are always different than that of other major fashion brands. However, this can prove to be a weakness for the company as customers may not always prefer such products and may opt to buy the more mainstream ones.

Opportunities

Ecommerce is a platform that Zara should definitely take advantage of. By the year 2025, it is forecasted that Zara will have an immense online presence and will have products selling on Amazon in different countries. Zara also has its own website, which they are looking to promote through advertising and marketing.

Zara should also focus on expanding its business. It should keep an eye out for developing markets out there. This can mean new countries or different social media platforms to take advantage of. Zara can also take the help of influencer marketing to make more consumers and customers aware about their products.

Threats

Zara is one of the top fashion retailers of the world. Thus, it faces intense competition from other big fashion retail brands who are trying hard to get Zara’s market share. Thus, Zara needs to come up with effective advertising and marketing strategies to ensure that they stay ahead of the game.

Zara has also faced criticism for the condition of their workers in their factories. Many times, reports surfaced that Zara was exploiting its workers and not even paying them the basic minimum wages. There were also reports that Zara was running sweatshops in third-world countries like Bangladesh and Pakistan.

PESTLE Analysis of Zara

PESTLE analysis stands for Political, Economic, Social, Technological, Legal and Environmental factors that govern a company. Down below, I have discussed the PESTLE analysis of Zara.

Political

Zara was founded in Spain at a time when import and export taxes were low. Thus, Zara was able to take advantage of the situation and quickly expand its operations. It started importing raw materials and exporting finished products to different countries. The countries of the European Union were the biggest purchasers of Zara’s products.

Economic

Spain is a country where there is a high rate of unemployment. Thus, the labor cost is low over there. This has helped Zara to build factories and warehouses where it hires a number of people. It has provided jobs to many local people and also has benefited from the low labor costs.

Social

Zara believes in manufacturing designs that resonate with the local culture of a place. It has different designs for different countries. Thus, it is able to retain the interest of its customers in different countries across the world.

Technological

Zara has its own website and also drives carefully planned marketing campaigns. It is also trying to establish itself on different social media platforms like Facebook and Instagram. Zara has also tied up with Toyota to make their factories and machinery more sustainable and productive.

Legal

Zara believes in sustainability and ethics. Thus, it has always been quick to respond to any kind of allegations or criticism. Although there save been instances where the brand has been accused of stealing designs from major fashion brands like Adidas and Balenciaga, the company has managed to retain its respect and dignity in the eyes of its customers.

Environmental

Zara focuses on sustainability for the environment. It has recently launched a program where it plans to reduce its carbon footprint and make their factories environment friendly. This detox program was widely acclaimed by fans on social media, who lauded the company for their concerns towards the environment.

Summary

Zara is a brand that has achieved immense success with careful planning and strategizing. This complete case study help of Zara will allow you to understand the company, it foundations and operations, better.

Zara Case Study PowerPoint

Zara is a globally acclaimed fashion brand, popular for manufacturing clothing items, apparel, shoes, innerwear, swimwear, perfumes, accessories, beauty products and household goods. It was founded in Spain in 1975. Since then, the company has managed to establish itself as one of the largest fashion brands of the world.

As of today, Zara has around 2270 stores in over 90 countries. Recently, it has also launched its beauty segment called Zara Beauty. It has also been featured in Forbes Magazine as one of the most successful fashion brands of today. Zara is also endorsed by celebrities, fashion icons and artists, making it seem all the more desirable to the public.

Zara Business model

Zara has a team of talented designers and fashion forecasters who manage to predict the upcoming hottest fashion trends. This allows the company to manufacture products that are trendy and new. Zara also does not follow the standard designs that every luxury brand manufactures. It believes in unique concepts, and designs. They have their loyal customer base just because of this reason.

Zara also beloves in changing their products from the store quickly. This is known as a quick-cycle model of apparel production where the company manufactures apparel in less quantities. This helps them to get sold out from their stores and also prevents any kind of overstock from piling up and affecting their total revenue.

Zara also incorporates a smooth model of sourcing their raw materials, manufacturing their products, distributing the finished products and finally retailing them. This ensures that their business model operates without any kind of hassles. A lot of other fashion brands have tried copying Zara’s business model, but the company has managed to retain its position as one of the top fashion retailers of the world.

Zara’s marketing and advertising strategy

Zara focuses on information technology to reach out to its customers. It ensures that their consumers always stay up to date with their latest offers, trends, styles and discounts. They have managed to achieve this by launching their own website that provides delivery to over 45 countries.

Zara is also active on social media platforms and has a good presence of Facebook and Instagram. However, in recent years, Zara has fallen back on the advertising game. Brands like H&M, Reebok and Armani are rushing to grab the market space that Zara once had. If Zara wants to stay ahead of the competition, it needs to adopt an aggressive marketing strategy for the future.