An overview of the company

The following paper is about writing a business strategy report and the making proper strategies and evaluations for the company named Zara located in Spain. Business strategy is one of the most important things that have to be planned by every business organizations at the beginning of expanding their markets to another country in a different continent or in the same country to develop their customer base by satisfying their customers.

Every business organization has some common goals or objectives at their disposal that they have to pursue in order to gain the competitive advantage over their rivals. The business environment is quite competitive in all the countries and the cross-cultural factors have to be considered most of the times. It is , therefore, important indeed to consider the important factors in this context so that the business organizations can achieve their desired objectives in due course. This is a kind of long-term business planning that helps the organizations to obtain their targets through applying some strategic tools. In this present world, the competitive advantage is so very important because it is one of the most important parts to gain the edge over their rivals. The organizations should be able to assess the strategies of their rivals and this should effect in making their own strategies. The organizations must look forward to be unique so that they can attract their customers towards them by providing some offers and some special discounts on their products. Profit is the ultimate goal for the business organizations and they must look to apply the same for their profit.

As a matter of fact, the focal point of this discussion is about the Spanish apparel and clothing company Zara. In this discussion, the central aspect will be to focus on the facts on which Zara should eye on to obtain their goals and expand in the international market. Some important business strategic tools have to be applied so that they can apply them in their pursuit of gaining competitive advantage. The macro and micro analysis of the company has to be made. Also, the internal and external business environment has to be discussed and explained to that effect. Other important strategic tools must be analyzed so Zara can be able to assess the ways in which they can obtain their strategic goals.

Zara is one of the leading companies in the apparel and clothing industry. It is one of the best retail stores in the country. This organization belongs to the retail industry. The company was founded in the year 1974 by Amancio Ortega (Zarahome.com, 2017). The headquarters of this store is situated at Arteixo in Spain. The parent body of this organization is the Inditex Group and Zara is their main brand (Inditex.com, 2017). They have a big international market all over the world and they have more than 2000 stores all around the world. Zara has entered into different foreign markets like Portugal, united States of America, France, Greece, Belgium, Sweden, Costa Rica, China, South Korea, Indonesia, India and many others. Zara sells all types of men’s and women’s clothing, also including the children’s clothing as well (Zarahome.com, 2017). 

Section 1

The different kinds of apparels that are produced by Zara and sold in the markets depend on the current consumer trends and the satisfaction of the consumers. Zara produces and sells more than 450 million items all through the year in their respective markets. They launch around 12000 products each year and experience a huge customer response from their customer base. The response is mostly positive (Zarahome.com, 2017). The main production hubs of their items are located in Spain, Portugal, Turkey and Morocco. However, in case of Asia, they have decided to shift their production base by outsourcing into the continent itself. One of their most innovative and unique initiatives has been to ban all the toxic elements from the clothing production industry. In these contexts, the internal and external business environments should be examined by analyzing the different elements.

Strategy Recommendations and Evaluations summary

The business strategy report of Zara has been an exclusive part to analyze what further strategies they could undertake. The strategy report shows that there are barriers in the market for Zara and they could be facing some problems in different markets using different market entry modes. The economic factors are very important in this section because the role of the inflation and recession in the past decade has left an indelible mark on the economy of all the countries. The organizations that have been able to hold its firmness despite these problems, are finding it difficult to expand their markets in different countries because of the economic instability of their target countries (Goold and Campbell 2002). The strengths suggest that their flexibility in the market and satisfying their needs are the main concerns of the organization. They have some weaknesses due to their high price of the apparels. It is very important to note that they have some opportunities like expanding their markets all over the world. The presence of Zara stretches to 77 countries all over (Okoro 2012). This helps them to make huge profits and retain their skilled workforce. The use of technology in their working operations can be considered as one of the major strengths of Zara. The threats that are posed towards them are due to the rivals of the company within the clothing and garments industry (Goold and Campbell 2002).

The different operations of the different departments are very crucial for the smooth functioning of Zara. They have their retail stores in many countries and it is very important to maintain their reputation in the international market despite facing many barriers. The role of the human resource department is surely an effective one in this context because they fix the different standards of work within the organization and they recruit the employees (Collins and Rukstad 2008). It is up to them what sort of employees they serve to the organization and how are they serving the organization as a whole. The role of the information technology department is also a major one since they develop different strategies to circulate the products of Zara through web. They also make practical use of the RFID technology so that the store managers can stay updated about the purchase and remaining stock of the products (Zhu, Mukhopadhyay and Kurata 2012). Next is the operations department on whose shoulder rests the responsibilities of running the business functions smoothly. The strategies they have taken are very cleverly woven as can be seen from the explanations about the internal and external business environments (Collins and Rukstad 2008).

Recommendations

The business strategies of Zara must be based on capturing the global customer base as Zara’s products are quality tested and they are made up of the best materials of fabric and other things. This shows that the customers of the high society will be attracted to their products because of their quality (Collins and Rukstad 2008). They should not compromise with their product quality as it is the one of the most initial services associated with customer satisfaction. They have to implement strategies practically so these strategies can be fruitful enough. Other things suggest that they have to choose the exact market entry modes in the target countries. One example can be given in support of this (Goold and Campbell 2002). The market entry mode that they can use in china they can certainly not use that mode in African countries like Albania. Therefore, it is clear that the strategies should be implemented properly by judging the business environment that they are operating in (Collins and Rukstad 2008). Zara should look to implement their supply chain strategies properly because it will help them to provide the customers with the best available products. They should cope up with the barriers in the entry market properly so that they can avoid these barriers and overcome the difficulties of rivals (Bastein et al. 2014). Zara should look to segment their target market and focus on the higher class society as their product prices are very high. If these strategies are implemented, Zara could level a grand success in the clothing industry (Collins and Rukstad 2008).

• Zara should set their target market according to the target countries and focus mostly on the high society people (Collins and Rukstad 2008).
• Zara must look forward to assess the demographic factors of the society they are operating in so that they can keep the prices of the products lower at the time of entering the market (Schuster and Holtbrügge 2012).
• Zara should always use the technological devices at the fullest so that they can attract their younger customers very easily who are tech savvy and stylish.
• Zara can address the people by defining that their products are of high quality and convince them to become their customers (Collins and Rukstad 2008).
• They should hire and train the individuals in a way that they can cater to the global growth of Zara (Jehanzeb and Bashir 2013).
• They should retain the Asian market, especially India and China, because of the high amount of population in those countries (Collins and Rukstad 2008).
• Zara must provide the best services to their customers in their online service (Luo, Ba and Zhang 2012).

The main objectives of Zara are to:-

• They want to increase the customer satisfaction and decrease dissatisfaction (Orel and Kara 2014).
• They want to grow in the international market more to obtain higher number of customers.
• They want to increase their brand awareness and create a favorable attitude towards their customers (Huang and Sarigöllü 2014).
• They want to increase the purchase frequency of customers.
• They want to capture the market by 5%-10% in the next three years.
• They want to increase the enrolment date.
• They also want to develop promotion strategies driven by promotions (Armstrong et al. 2015).
• They want to provide marketing training opportunities to the international agencies.

One of the most important things in developing a proper business strategy is to assess the internal business environments of the company (Kuratko, Hornsby and Covin 2014). The internal business environment can be judged by making an analysis on the different elements of Value chain framework invented by Michael Porter.

Inbound logistics

As Zara has to deal with various agencies in terms of their raw materials and especially in the preparation of apparels by non-toxic elements, the suppliers of the products are an integral part in this context (Crocker, Jessop and Morrison 2014). These elements of the inbound logistics are always so very important for the safety of the consumers (Leavitt 2003).

Operations

The operations management and the concerned managers should positively look after the day to day operations of the stores in different sections and different countries (Slack 2015). It is their responsibility only to ensure a smooth running of the store operations and satisfying the customers (Pitt and Koufopoulos 2012).

Outbound services

The customer satisfaction has to be given the top most priority by the sellers. They have to make sure that the customers are getting the right products that they want. This will lead to a better impression on the minds of the customers who will give a positive feedback to the company and thus recommend about their services to others (Jannach, Zanker and Fuchs 2014). Thus outbound services are very important in this context.

The responsibility of the marketing and sales department is very crucial because the roles they play is to attract the customers towards them. The customers are very much judgmental about the products and their quality and they rely on the best available products. It is up to the sales and marketing department on how they display the products and their quality to the customers (Leavitt 2003). This will attract the customers towards Zara because they will feel that the non-toxic elements will keep them safe in this natural environment and save their skin. The cost-effectiveness of the products should also be reported to the customers (Best 2012). The marketing department must develop some effective ways to communicate with the customers very frequently (Leavitt 2003).

Service

The apparels that have been purchased should be of exquisite quality and it should not, at any point, prove to be a waste of money to the consumers (Wilson et al. 2012). The service management should be at the top quality for Zara so that the customers should feel that they have bought some valuable apparels and their money is quite worth buying it. Whenever, they receive any complaint from the customers regarding the product, they should readily change it if it falls within their exchange criteria (Wilson et al. 2012).

It is not very easy to get properly trained and skillful employees in the retail industry with an effective knowledge of marketing. So, it is onto the human resource management to identify what kinds of people are required for Zara to function smoothly in this competitive business environment (Johnson et al. 2013). They must find those people with proper knowledge of marketing and train themselves to become the active participants in the growth of the organization. The human resource management has to hire the employees in Zara, motivate them to stay there and reward them for better performances in the past (Leavitt 2003). The human resource management of Zara must also learn to retain their workers in the organization for a long term (Beardwell and Thompson 2014). Human resources thus should play a vital part in the development and expansion of the market. One of the chief objectives of Zara is to remove all the toxic elements in their supply chain by 2020 (Hansen 2012).

Technological development is one of the major aspects in the 21^st century business administration and providing successful business strategies. Almost all the organizations look to include the use of the latest technology in their system. This will help them to keep updated with the latest news and information about the current business world. In recent times, Zara has introduced the use of the RFID technology within their organization (Zhu, Mukhopadhyay and Kurata 2012). They use these RFID chips in their security tags of their clothing items. At the time of purchasing these items, these chips are removed and can be used again. They use this RFID technology to identify if any of the items are missing from the shelf. As soon as any item is sold, the stockroom of the store gets the update and quickly replaces this item (Leavitt 2003).

Zara also use the online business medium to attract their customers. The people who are always busy in their work life cannot afford time to visit their stores. They can avail their online shopping system to purchase their favorite things (Solomon 2014). They also get various discounts on these purchases. Through applying this medium, Zara can expand their markets in most of the countries especially in Asia. The biggest market is obviously China so they can attempt to build a customer base in china by assessing the consumer behavior of the Chinese people (Solomon 2014).

The infrastructure of Zara has to be looked after properly and any fault in the operations should be mended immediately so that services are not disrupted (Schaltegger, Lüdeke-Freund and Hansen 2012). All the most necessary things like all the support systems of Zara, accounts department, legal factors, administrative factors and the general management have to be maintained in harmony to avoid any disputes between all these departments. These elements of the necessary infrastructure should provide competitive advantage to Zara (Leavitt 2003).

The best way to assess the external business environment of the company is to make a SCOT analysis of the business strategies of Zara (kew and Stredwick 2017).

• It is a very powerful brand and it takes only about two weeks to prepare its new product and bring it in the market within 6-8 weeks to meet the customer preferences (Nishino et al. 2014).
• They did not shift the production in the low costing countries but they have kept the production mostly in Portugal and Spain. The wages are lower in these countries.
• Zara uses group of designers to design their apparels rather than individuals. This cuts down their production costs as well (Argyres and Zenger 2012).
• Zara is able to cut down the shipping costs and thus are more flexible in meeting the customers’ demands (Goold and Campbell 2002).
• In some localities, consumers can buy the products of Zara by downloading their online app on their iPod and iPhone.
• Zara keeps a low inventory in the stock markets (Goold and Campbell 2002).

Challenges

• Zara has to control a huge area as its international market is a widespread one. This is why this could leave them weak in controlling the markets.
• Though, Zara is a global organization, but it is present in only 77 countries (Goold and Campbell 2002).
• The parent body of Zara, Inditex is over dependent on Zara.
• One of the most important aspects of business expansion is advertisement. The in-store advertisement model may not work to be a profitable one for Zara.

Opportunities

• As Zara has merged with the Inditex group, they have more opportunities in investing in the emerging markets all over the world (Goold and Campbell 2002).
• Zara stores are located in 77 countries and they have very wide opportunities in invest in the Asian superpower markets like China and India.
• The Zara stores have great opportunities in expanding their markets in African country Albania. They can grow their markets according to the consumer tastes of Albania.
• Another positive thing is that the stores in the locations will offer the company to expand globally and present new opportunities for market development (Goold and Campbell 2002).

Threats

• The competitive environment is so fierce and the rivals of Zara are on the race for beating them to gain the competitive advantage. The rivals are H&M, GAP and Benetton.
• Some people who do not have the permission are imitation the logo of the organization and using it to their own advantage.
• Increase in euro rate will affect their production costs.
• The increase in the consumer selling price is also one of the main threats in front of Zara.

The supply chain strategy and the just in time production of the products will have a great impact on the business of Zara (Christopher 2016). The organization thrives to deliver the best possible products to their customers just in time with fashionable and trendy apparels. Zara makes it sure that more than 80% of their production is done at their own factory. As a result of this, Zara can be flexible in amount, frequency and variety of the products (Pitt and Koufopoulos 2012). As an effect of this just in time production, they have to depend on the fabric sourcing, cutting and sewing facilities that are available in the areas near their headquarters in Spain.

It is a matter of fact that most of the Zara’s clothes are manufactured and delivered to the customers at the middle of the season. The customer demand varies and changes from time to time. Zara also has kept some arrangements to meet the changing demands of the customers. The responsibility of the store managers is immense as well (Pitt and Koufopoulos 2012). They communicate with the HR managers and the operations department about the likes and dislikes of the customers (Christopher 2016). This will be an effective feedback for them as they will realize what grounds they have to improve upon to reach more customers. Another attracting feature of Zara is whenever new fashionable apparel gets in the box as a must-have; Zara gets hard at it and provides it to their consumers earlier than anyone (Goold and Campbell 2002). Zara is able to minimize their total cost because the merchandise that is marked down can be cut down at a great extent (Christopher 2016). It is an astonishing fact that the cost Zara earns from selling their items is 85% while the average industry rate is only about 60 to 70%. The items that are unsold accounts for less than 10% of its stock while the industry average rate is only between 17 to 20%.

It is very hard to find any dead stock in the warehouse of Zara. Zara can afford extra labor and the shipping costs are needed to be accommodated (Turker and Altuntas 2014). Zara uses the Inventory optimization models with the help of which they can fix the quantity of the products that should be delivered to all their retail stores via shipments (Goold and Campbell 2002). The effect of centralization has yielded great results in favor of Zara. It is notable that each of the outlets of Zara sends out two orders per week to its destinations. The trucks of the company leave at a proper time and deliver the goods at proper places.  The garments and apparels are already labeled and they are priced upon when reaching their destinations. The clearly defined rhythm of Zara has worked wonders for their smooth functioning (Pitt and Koufopoulos 2012). All the staffs of various departments like procurement, production, distribution, accounts and retail are very much aware of their roles and timelines for work. This is also a good positive factor for the customers as they are also aware of the fact when they will visit the Zara stores for new apparels (Turker and Altuntas 2014).

Zara has a very strong distribution network within Europe. This is the reason why the European customers are able to get the goods within 24 hours of delivery. In case of American and Asian stores, the customers are able to get the goods delivery within 40 hours only. The success of this brand shows how strong its operation is. The two most important aspects of this success are the cross-functional operations along with the virtually integrated supply chain. These production systems help Zara for mass production under push control (Leavitt 2003). These innovative strategies have helped them to stay ahead of their competitors (Reeves and Deimler 2011). The positive aspects that are associated with this are the high profits, lower markdowns, value creation for the shareholders in both short and long term. These supply chain strategies are the most brilliant of them all to succeed in this competitive environment (Goold and Campbell 2002).

As business environment is one of the most important aspects in securing the competitive advantage over the competitors, there is no doubt that the organizations must assess the business environment properly. This is an integral fact because before making own strategies, organizations must anticipate the strategies of their rivals. This will help them to make their own strategies more comprehensively (Pitt and Koufopoulos 2012). Therefore, it is very important to make a macro and micro analysis of the situations of the business environment.

The macro analysis of any organization goes through its PESTEL analysis (Jurevicius 2013). The main components of the PESTEL analysis include:-

Political factors

Zara is a huge brand and it has its own transport system, vertical integration system, different factories and their own outlets. Zara is expanded in 77 target countries. So, it is very important for them to keep updated with the policies of the government and the political decisions. The management of Zara always must be aware of the trade system of the country they are operating in and the related import and export regulation policies (Goold and Campbell 2002). As Zara is a reputed organization in the garments industry and they have a worldwide existence, they must be aware of the different political situations in the countries so that they can avoid the unnecessary closures in their country. It is undeniable that the more politically stable their target country will be, the more they will be able to be successful in trade (Morrissey and Udomkerdmongkol 2012).

Economic factors

The different aspects that are related with the economic factors are the inflation rates, economic growth, interest rates, foreign exchange rates and many others. Since Zara is a global brand, the managers and the decision makers should look to keep proper knowledge of these economic factors at their disposal. This is because there should be no problem in handling the economic factors in the target countries in the future (Goold and Campbell 2002). They should also keep in mind the taxation charges in those countries. Zara produces their garments to be sold to the people of the higher classes as the people of the lower classes cannot afford their things because of high price (Ford and Richardson 2013). It is very important to know if their brand is at all affordable to the people where they want to set up their target market. The management of Zara should be looking forward to assess the profits because of the sales along with the cost management (Goold and Campbell 2002).

Social factors

As Zara’s business dealings belong to the fashion industry, it can be said that the social factors of the fashion industry depend on how these customers can spend their money that are elastic to the economically stable society. Zara has to be well aware of the spending habits of their potential customers and the changing trends in the fashion market. The countries where the population rate is very high, Zara has a better opportunity of capturing that market because of its population structure (Reeves and Deimler 2011). It is very important to note that Zara operates in a market around the world where they come across diverse cultures. The generation changes have added an entirely new flavor in in the outlook for buying and selling the products that are concerned with the fashion industry.

Technological factors

The efficiency of the organizations depends on the inclusion of the newer technologies. The importance quality control of a product is so much that the organizations tend to take the help of updated technology so that they can deliver each product with quality efficiency (Jurevicius 2013). Zara has its physical presence all around the world and with its official website and the social media sites like Face book, Instagram, Google+, Linkedin, Twitter and others they show their virtual presence all over the world as well. Their use of RFID chips in the stores has opened a new horizon of efficiency for its product quality in the era of digital disruption (McQuivey 2013). In this way, the company can stay updated with the recent changes in all sects of the society and social media forums (Reeves and Deimler 2011). Zara has made a very clever business decision where they have opened a category for their customers where they could upload photos where the customers were wearing the garments of Zara. In this way, shopping with Zara has become more customers friendly and attached emotionally so that they can bring more customers (Leavitt 2003).

 Environmental factors

The most common aspect of the environmental factor is that the consumers nowadays are well aware of the fact that they are buying the products that are socially accepted and the brands they are choosing care for the environment. Zara is a brand that is socially accepted and needs no introduction. If they want to expand their markets in China, they have to be well aware of all these factors mentioned in the PESTEL analysis (Jurevicius 2013). The management of Zara needs to execute with strictness some policies that are exclusively for the waste management or the by-products of the raw materials. They should focus on producing environment friendly products which they have already begun through eradication of the toxic elements from their garments (Jurevicius 2013).

Legal factors

Zara has to make sure that they are obeying all the legal obligations and ethics while maintaining their business and making their profits. As Zara is a well-known international brand, they have to fulfill all the legal structures to be a successful brand in their target countries. This sets up a tone of high reputation in the consumers (Leavitt 2003).

It is very important to discuss the business operations of Zara in the context of using the Porter’s five forces. These five aspects are competitive rivalry, threat of new entrants, and threat of substitutes, buyer power and supplier power (Dobbs 2014).

Competitive rivalry

The rivals or the competitors of Zara are the big names in the apparel industry in Spain (Reeves and Deimler 2011). These companies are H&M, GAP, Benetton and others. They are continuously looking to get the edge over Zara. Zara has to retain their position in the market (Goold and Campbell 2002).

Threat of new entrants

The new entrants in the clothing business in Spain and in Europe mostly are looking to intervene in the anarchism of Zara. The younger fashion chain organizations like Pull&Bear, Massimo Dutti are always in the hunt for getting the edge (Goold and Campbell 2002).

Threat of substitutes

The substitute companies can look to gain the customers by selling the same quality apparels so that the middle class people can also buy it. The high price of the apparels is a barrier for the middle class people to buy it (Dobbs 2014).

Supplier power

The supplier power of Zara can be considered as very high because the company looks to limit its supplier power within their home country and nearby countries like Portugal and others. This helps to get a greater production at a lower wage rate (Reeves and Deimler 2011).

Buyer power

The apparels of Zara that are produced and sold exclusively are for the high society people. This proves that the buyer power is obviously strong so the customers will be able to buy the apparels ignoring how high the price is (Dobbs 2014).

The question of value

Inditex has been considered as the combination of resources so the most valuable object is the vertical integration. All the important aspects like the managing the designs, warehousing, distribution and the logistics department are handled by them only instead of depending on the third parties. This is how they are faster and more flexible than their competitors that are most important. As a result of the vertical integration the operation costs are much lower and the employees treat each other with respect. Thus their organizational culture is also well conceived (Grant 2016).

The value of rarity

Inditex looks to emphasize more on the capital-intensive industry, thus going against the tide of outsourcing most of their production. This is why Inditex is not so much labor-intensive. It has been seen that other organizations can produce around 2000 to 4000 new products in a typical season while Zara produces more than 10000 items. Besides that, Zara can deliver most of its items within three weeks while the industry average time is six months. Thus it camn be noted their resource is really rare (Grant 2016).

The question of Imitability

It is possible to imitate everything in this time. Considering this, the competitors of Zara can try to imitate their business model and their organizational structure. This would be beneficial for them but the fact is that it will take a huge amount of money to imitate their business model that is led by vertical integration (Joskow 2012). The kind of supply chain they use is also difficult to imitate. They ring so many subtle changes in the organization that it is impossible to keep pace with them.

The question of Organization

The annual report of Zara shows that they are constantly increasing in sales and profits. The efforts of the Inditex employees and the management deserve all the credit for this (Caro and Gallien 2012). All the managers like the section managers, HR managers and others have contributed to the success of Zara. The decision making process is so swift that they have outclassed their rivals at ease (Grant 2016).

The question of sustainability

Zara has achieved its sustainability in a lot of ways. They have launched certain policies and plans that would attract the customers more towards them. Their plans to give scholarships to the talented students add to their corporate social responsibility. They have marched a long way ahead of their rivals to gain the competitive advantage and this way they will retain their sustainability in the industry (Smith 2012).

The company strategy of Zara has been consonant with the ecosystem and stakeholder needs in many ways. Both the internal stakeholders are satisfied with the strategies taken by the company. The internal stakeholders like the managers, directors and other top post holders have motivated the employees to perform their best gain the edge over their competitors. The external stakeholders like the buyers and suppliers are also on the same page with the different strategies set by Zara. The fact that they do not outsource their materials has proved to be a good decision for them since the production costs have been reduced.

These strategies can bring in new fundamental changes within the apparel industry because the rivals of Zara will learn how to stay alive in this industry because with their sharp leadership and clever tactics, they can outlast all their competitors. The blue ocean spaces or strategy can be fitted into this aspect because the four important elements of this strategy like raise, eliminate, reduce and create can be adjusted with the strategy of Zara (Lindi?, Bavdaž and Kova?i? 2012). They want to eliminate all the challenges posed by their rivals and thus make the marketing arena completely blue and free of any challenge. They have to reduce the costs of their products in order to survive in the entirely new market like that of China. The impact of global recession can pose threat if they do not reduce their apparel costs (Eaton et al. 2016). The aspect of innovation or creation is within their practice. It is because they can innovate a lot of new designs within the industry. This shows the depth of their innovation capacity (Parkman, Holloway and Sebastiao 2012). 

The company’s strategies and steps to convert the strategies really position them differently from their rivals. This is because the idea of not outsourcing their materials, making customers satisfied with the products very quickly than their arch rivals. They do not outsource their materials to other countries and this reduces the production costs along with low wages in the industry.

Zara has identified some trade-offs and limitations in the strategic action plan (Ellis et al. 2013). The certain trade-off in their plan is to decrease their product costs so that they can gain more customers in the target countries. This is an exclusive fact in this context because business prosperity is always uncertain in the target countries. They need to take the risk of cutting down their product costs without compromising with the quality.

Zara is looking to capture the customers both offline and online now. They have their official website through which they could sell some apparel. This facility is added to the fact that they will be selling the exclusively selling the products that have only been available only in their retail stores. They sell their products online through the online apps like amazon, ebay and others with pretty attractive discount offers (Chaffey and Ellis-Chadwick 2012). The experts have observed the fact that there are many advantages of online shopping. The time-presses shoppers take the advantage of the high speed internet connections and do their shopping from home or workplaces. The strategic management team of Zara has seen this as a great opportunity to double the advantage in the coming years (Pitt and Koufopoulos 2012).

Though Spanish market is the home market of Zara, the second most important global market is China, mainly because of their huge population and their strong mixed economy. The first store of Zara in China was Shanghai flagship store in 2006 (Crofton and Dopico 2012). They have observed that the Chinese people are looking to invest more in fashionable accessories in the near future. They will look to go after the female customers with stylish apparels. Zara has been continuously supplying the Chinese customers with a stylish lifestyle in spite of the crash of price property market in China being cooled out. Though this could be a risky effort, Zara is continuously making efforts to sustain its rapid growth (Leavitt 2003).

Conclusion

This paper can be concluded by saying that Zara has been a leading retail brand in the clothing industry. It has shifted its focus to expand their market on the global surface. There are many things that have to be kept in mind in order to do so. The prime factors of the business strategy like the analysis of the internal and external business environments shows that they are at an advantageous position in serving their customers. Zara provides services to the people of the high social class people because of the high prices of their products. It is very evident that they keep updated with the new inventories of fashion world and are committed to supply their customers with the latest quality products. Their workforce is very skilled and they are highly trained to achieve the customer satisfaction. They have to utilize the opportunities of expanding into more countries since it is always profitable to gain new customers. This will be very effective in terms of their growth and development. Zara should gain the competitive advantage over their rivals by completely eliminating their challenges and barriers. They should select the best suitable market entry modes to become successful in the business expansion.

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