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Zara Fashion Company’s Strategic Management

How is strategic management illustrated by this case?

Strategic management is vividly illustrated by the given case. Zara provides an excellent example of how the properly elaborated strategy may result in outstanding success in the market (Thompson & Martin, 2013). The company strategy to get fashion clothes to customers as quickly as possible is simple but it meets the major challenge of the fashion market perfectly. To realize this strategy, the company designers and clothes constructors spend only two weeks for the full cycle of new product designing and delivering to the retail network of Zara shops. As a result, Zara is the leader of the international fashion market. Moreover, Zara performs so well because of the efficient delivery system and ability to adapt to the market trends quickly (Hill, Jones, & Schilling, 2014).

How might SWOT analysis be helpful to Inditex executives? To Zara store managers?

According to Frynas and Mellahi (2015), SWOT analysis can be helpful to Inditex executives by means of providing understanding regarding the emerging opportunities, possible threats, and needed changes to keep the company performance at the ever high level. In addition, SWOT analysis is a helpful tool for observing the latest market trends and evaluating the threats set by competitors (Robbins & Coulter, 2014). Zara store managers can also benefit from performing regular SWOT analyses because this measure would help them remain competitive, perform efficiently, and develop steadily (Heizer & Render, 2011). It is also necessary for Zara store managers to trace the situation from the local perspective with the use of SWOT analysis to adapt the company strategy to the local needs (Heizer & Render, 2011).

What competitive advantage do you think Zara is pursuing? How does it exploit that competitive advantage?

As far as I am concerned, Zara is perusing the competitive advantage of timely delivery of its quality and stylish goods to a potential customer earlier than any other company-competitor. Zara exploits its competitive advantage by creating additional value by having the fashion items of the latest design earlier than others to its customers. To achieve even more success in this field, the company is looking for new opportunities. First of all, it has successfully entered the market of online fashion clothing sales. Next, the company keeps on updating its production technology to keep on minimizing its time of product delivery to the retail points. In addition, Zara constantly works on improving its logistics, and today, its logistic net can be compared only to the absolute leaders in the field such as Walmart (Robbins & Coulter, 2014).

Do you think Zara’s success is due to external or internal factors or both? Explain.

I think that Zara’s success is due to the combination of external and internal factors but internal factors prevail. The company’s success, first of all, comes from effective business strategy. Of course, external factors have their impact on the company’s prosperity. For instance, Zara’s competitors still strive to create the advantages at the market Zara has had long ago but they fail at the moment, which can be considered an external factor contributing to Zara’s excellent performance. However, the impact of external factors on Zara’s advancement is modest.

What strategic implications does Zara’s move into inline have?

Zara’s move into inline has two major strategic implications: having new retail capabilities and optimization of resource usage. According to Wheelen, Hunger, Hoffman, and Bamford (2015), an online segment of fashion clothes sales is ever-growing during the past decade. Therefore, to maintain its leading positions in the market, Zara needs to strive to perform well in the online segment. Also, relocating retail business to the online dimension helps saving company assets and allows considerable economy of funds (Wheelen et al., 2015).

References

Frynas, J. G., & Mellahi, K. (2015). Global strategic management. Oxford: Oxford University Press.

Heizer, J. & Render, B. (2011) Operations management, (10th ed.). London: Pearson.

Hill, C., Jones, G., & Schilling, M. (2014). Strategic management: Theory, an integrated approach. London: Cengage Learning.

Robbins, S.P., & Coulter, M. (2014). Management (12th ed.). Upper Saddle River, NJ: Pearson Education, Inc.

Thompson, J., & Martin, F. (2013). Strategic management awareness & change, (7th ed.). London: Cengage Learning.

Wheelen, T.L., Hunger, J.D., Hoffman, A.N., & Bamford, C.E. (2015). Strategic management and business policy (global edition), (14th ed.). London: Pearson Education.