Crisis successfully managed

Crisis boffoly managedIn todays world, there are umpteen thriving global businesses. On this assignment, it pull up stakes illustrate Zara, which is one of the most successful fashion companies, including brief history, market initiation and Zaras strategies in order to understanding the performance of Zara.Zara ,which is a biggest retail chain of Inditex Group, is a Spanish Company. The Inditex Group, which consists of Zara, Massimo Dutti, Pull and Bear, Oysho, Uterqe, Stradivarius and Bershka, is own by Amancio Ortega. The head office is located in La Corua, Galicia,Spain where its first store was established. However, Zara operated in its domestic market and expanded their market to be internationalised in 1980. In the brave period of nineteenth century, Zara expanded its stores to Portugal, ground forces and France respectively. Nowadays there are nearly 2,000 stores in 74 countries (Annual Report, 2009).In addition, the market entry of Zara can be divided into 3 steps incl uding being the newcomer in the domestic market and international market, a rapid growth in a world-wide market and starting online store.Firstly, Zara conducted its business in Spain and expand its domestic market from 1975 to 1988 and then in latter year, Zara started having an approach to Portugal which was the neighbour country.Secondly, the stores were founded in USA and France. There has been a significant expansion all over the world since 1997. By 2000, Zara stores began to do business well-nigh Europe and its stores was founded in Costa Rica, Indonesia, Philippines and Monaco in 5 years later. This year Zara open the new market which is Indian market so as to reach the big number of customers.Lastly, In family 2010, Zara started online store in Spain, the UK, Portugal, Italy, Germany and France. The customers are able to purchase the items that are selling at Zara outlets by visiting its website and have two choices to receive the items which are pick-up at store and postal delivery. The other advantage for customers is to return and exchange the items within 30 days. Recently, Apple have been launched the applications of iPhone and iPad in order that it will be more than convenient for the customers to purchase Zaras products (Apple, 2010). Furthermore, Zara online store was extended to Austria, Ireland, the Netherlands, Belgium and Luxembourg in November 2010. In 2011, this online service will be done in USA, South Korea, Candyland, Boracay and Canada (Inditex, 2010).Zaras strategiesFirst of all, this objet dart will describe about the strategy of Zara by using SWOT analysis which is to understand the factors of Zara.StrengthZara has its long reputation and many kinds of products. Zara has widely stores around the world. Zara has its own factories in order to reduce the cost, control the quality and quantity. The idea of its staffs is modern and fashionable. Thus, after Zara releases its product. It can respond the need of customers.WeaknessIn ch eek of too many stores, the cost of company is higher than its competitors. The other point is lack of suitable Public Relations.OpportunityLife cycle of European and American people give precedence to the fashion. As a result, they change their outfits regularly. Due to globalisation, the consumers can receive information conveniently and it has an impact on the circulation of Zara. Furthermore, the expansion of Zara will be easier.ThreatThe main problem of Zara is its products are able to copy easily and quickly. Zara has many competitors both its old and new entrepreneurs. Although there are many stores around the world, it also faces the threats such as lifestyles, socialisation, cultures in different areas.Second, Zara has the good performance because of its key factors. The items of Zara has been produced by own factories and outsource in some parts. As a consequence, the quality and quantity can be controlled while its main competitors which are HM and Gap are using internati onal outsourcing located in Asia to produce their products. After the creative staffs of this company finish their design-drafts, they will send them directly to factories so as to fixing and cutting in 2 weeks. The utmost step is to send the items back to the company to check and pack before transporting to the domestic and international chain stores.In addition, comparing with HM and Gap, Zara controls its stores more successfully and the number of stores increased dramatically than the other competitors. Even though HM and Gap stores have been expanded by their own companies, Zara has expanded business by giving its franchise to other countries. Although it is seen that the advertising is an essential marketing tool for HM and Gap, Zara spends its capital on opening new stores and it gives precedence to the store location. (Fan, Y. and Lopez, C., 2009)Third, facial expression at the statistics of Zaras performance, in 2007 Zara sales were 6.26bn and the profits of Zara blush by 25% to 1.25bn, accounting for around two thirds of the Inditex Groups total revenues of 9.43bn. The sales of Zaras parent company rose 9%, accounting for 2.218bn (1.7bn) in the first three month in its financial year, while there were 2.169bn in Gaps sales and Gaps revenues decreased by 10%. Besides, Inditex Group had overtaken HM for three year. Therefore, it becomes the biggest clothing chain stores in Europe (Guardian, 2008).According to the two years later, there was an increase in commercial outer space of the Inditex Group by 8%. Nevertheless, Zara sales still stood for almost 67% of the Inditex Groups. Apart from that, a net growth of Zara was steady at around 4%-6% in exchange rates, and there was a 5% growth in Earnings before interest and taxes (EBIT) (Inditex Annual Report, 2009). On the one hand, Gaps sale dropped meagrely to $14.2bn in 2009 (Gap, Inc. Annual Report, 2009). Thus, Zara was more successful than HM and Gap.ConclusionEven though Zara has already been succe ssful in the global market, it still need to cleanse and enhance its strategies because they should be up-to-date methods. From my prospect, there are 3 ways of strategic developments.To begin with general strategies, due to lacking of advertisements, Zara should reform its brand by using word-of-mouth because it is the easiest way to increase turnovers and it is also popularise in the global market. Another suggestion is working locally such as sizes, types of fabric, the enjoy and expectation of consumers so as to response their needs. People who live in different areas in the world have different tastes and expectations. Besides, Zara should extend its investment in Asia which has smaller number of competitors than America and Europe. As a result, Zara will reduce the cost of product distribution. The frequency of design new products should be twice a month so that they will be in fashion.Next, the strategic management in all stores should be developed. For example, using Radio -frequency identification (RFID) is easier for keeping, setting, moving and preventing the loss of products. owe to encouraging the customers, Zara do not need to shelve all items. The limitation of products will incite the need of customers.Finally, since E-commerce business, Zara should support and invest in online shopping kind of of the stores which are not successful. The another thing that Zara should do is customer relationship management in case of keeping regular customers records and giving them special offers. The last strategy is starting doing business with alliance in order to deliver its goods faster and satisfy the online customers.