26 Jan 2023

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Zara’s Advantage Global Travel - The best way to see the world

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Academic level: University

Paper type: Research Paper

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Zara is among the largest retail chains globally in the fashion sector. The various popular brands that Zara owns globally include Pull & Gear, Stradivarius, Bershka, Uterque, Oysho, and Massimo Dutti. It commenced its operations in 1975 while it has grown to emerge as among the most prosperous brands worldwide mostly because of the significant emphasis it directs toward innovation. Zara does not outsource its production line to low-cost nations allowing its productions and designs to remain authentic. It does not lay much emphasis on brand advertising. Zara focuses on establishing new stores in distinct locations. Its reputation emanates from its effective supply chain and efficient support to customers (Ghemawat & Nueno, 2006) . The major area of emphasis by the company is on loyal customers.

Zara’s Advantage Global Travel 

The promotion strategy by Zara is similar in the case of both domestic and overseas markets where it starts selling or establishes new stores, after which it holds advertising campaigns. The organization utilizes its consumers and stores as the major promotional tools. It sets central prices with Spain serving as the center whereas the global markets are destinations. Spain experiences least costs while global stores’ prices depend on the cost of distribution attributed to the entire value chain. The location of stores has serves as a vital force to consider domestically and internationally. Zara prioritizes prime sites when introducing new stores. It ensures to undertake sufficient local environment analysis before establishing stores at prime locations that offer the company openings for boosting profitability. The firm ensures to utilize expert store decorators in prototyping the window displays and interior displays, which the international stores replicate. It ensures to standardize vital strategic elements, including location, window display, interior design, store layout, information systems, and store display, logistics, as well as customer service (Ghemawat & Nueno, 2006) . To meet local preferences, Zara ensures to synchronize the other items accordingly.

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Zara’s Past International Strategy 

Zara internationalization strategy revolves around three theories, including network, transaction cost analysis, and Uppsala internationalization models. For the Uppsala internationalization model, it stipulates that companies utilize the experience acquired over time to allow them to remain devoted to the global market. Having experience and time in a certain area makes it easy to grow the business locally initially before spreading globally based on the enterprise’s capacity as it realizes growth. Foreign markets portray traits similar to local markets (Ghemawat & Nueno, 2006) . The similar features might comprise of political systems, language, and culture. During the initial period, followership starts with exports without exports while independent while independent representatives embark on exporting during the second phase. It then becomes possible to establish subsidiaries of foreign sales (Mayrhofer & Roederer, 2016) . The model follows four steps.

For Zara, it commenced its operations in 1975 after establishing its initial store in Spain. It commended by establishing stores in regions with high population. The organization embarked on covering regions in which it operated while it commenced looking for overseas opportunities in 1988. It Zara utilized its experience to allow it learn as well as expand locally and to foreign markets. Portugal served as the nation’s first destination due to geographical and cultural resemblance with Spain. It made a limited number of changes to the prevailing business model. It identified countries with minimal geographical distance where it established stores before spreading countrywide. Zara later established a store in Paris, France. The firm later diversified its operations Mexico and afterwards to South America. It managed to overcome geographical and psychic distances allowing it to extend its operations in European nations under the assistance of the European Union (Ghemawat & Nueno, 2006) . The firm later changed its theme country to rhyme with the one of the Middle East and Australian culture.

Zara adopted the oil stain approach to allow it gain dominance in various regions dispersing in the same manner that an oil stain does on water. The company established its initial social flagship store to allow it acquire industry information and attain the needed expertise for introducing a store in a strategic location. The experience allowed the organization to grow its operations in the nation. For the European nations, which featured low geographical and cultural distance, Zara embarked on direct investment while utilizing the hierarchical model while it penetrated the nations using franchises and joint ventures. For nations, including India, Zara utilized agencies, such as Tata to allow it penetrate the nation (Mayrhofer & Roederer, 2016) . The overall approach resembles the Uppsala internationalization framework in which Zara established operations in distinct nations by following the four stages.

Zara’s Best International Growth Strategy 

In the event of Zara, it utilizes multi-brand store approach that presents pros and cons for the organization. It has numerous brands associated with it, including Pull & Bear, Zara Kids, Masimo Dutti, Stradivarius, Bershka, Uterque, and Oysho. During its initial internationalization states, Zara adopted ethnocentric orientation approach where its subsidiary firms needed to resemble prevailing Spanish stores. The approach led Zara to face numerous challenges because of diverse cultural differences. As such, Zara opted to focus on geographical front that permitted the form to utilize local solutions for its growth as opposed to duplicating the prevailing business model. It is possible to witness homogenous products in the international market that Zara serves. It adjusts prevailing market mix and later expands to distinct cultures (Ghemawat & Nueno, 2006) . Overall, Zara serves as among the biggest retail chain worldwide in the fashion market. It has managed to transform from a local Spanish firm to an internationally renowned fashion brand.

References

Ghemawat, P., & Nueno, J. L. (2006). Zara: fast fashion. Boston: Harvard Business School.

Mayrhofer, U., & Roederer, C. (2016). ZARA: the international success of fast moving fashion. Paris: Université Jean Moulin.

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StudyBounty. (2023, September 14). Zara’s Advantage Global Travel - The best way to see the world .
https://studybounty.com/zaras-advantage-global-travel-the-best-way-to-see-the-world-research-paper

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