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MKTG 305
Final S.W.O.T Analysis
Yui Ota
Mar 27th 2015
S.W.O.T Analysis: ZARA
1
MKTG 305
Final S.W.O.T Analysis
Yui Ota
Mar 27th 2015
Introduction: ZARA
Zara is a Spanish fashion brand that founded by Amancio Ortega and Rosalia Mera in
1975. It is one of the major selling brands of fashion retailer called “Inditex” that has many
subsidiaries such as ZARA, Massimo Dutti, Stradivarious, Bershka, Pull & Bear and now it is
available in 86 countries with total of 1763 stores worldwide. After they founded ZARA’s
first store in downtown in Spain it provides fashionable design for women, men and kids with
fast work. Zara offers new products just in every 2 week, a cycle which takes most retailer
shops 6 months to do so. Because the Zara’s vertical integration allows the accomplishment
of its swift distribution cycle with cutting prices, maximizing the sale of full priced inventory
and affordable merchandise. ZARA does wonderful job in attracting to a broad target market
of women and men ages 18-40 by providing a high-fashioned products at reasonable prices
however also has big competitors such as Mango and H&M.
Strengths
Part of one of the most biggest Spanish retailers in the world
“Inditex”, which is known as the head company, spread ZARA in a large amount of scale.
Nowadays, Inditex launched ZARA more than 1700 stores in 86 countries around the world.
This could be a good strength for ZARA because as an international apparel brand, it should
reach every part of the world. It means that customer can visit ZARA everywhere. Think
about the case that when you are purchasing your clothes! You probably want to “see” its
color, texture and shape with your own eyes and want to try the products that fit well with
your body shape. Customers could not check these conditions through the “online store”.
I think in apparel industry direct store is one of the good factors to attract people because they
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MKTG 305
Final S.W.O.T Analysis
Yui Ota
Mar 27th 2015
would feel sure to purchase products or not. Even if the customers don’t decide to buy the
products there still have some chances that customers pick other items.
Smart distribution Strategy
ZARA controls most of the supply chain and distribution of its items from the Spain
where is headquarter. It has main manufacturing place in three different countries. 50% of the
products are made in Spain, 26% is in the rest part of Europe, and the 24% of products are
outsourced from Asia. When the products are completed they transfer to Spain and export to
ZARAs around the world. As I mention in introduction part, we could consider that ZARA’s
distribution strategy is vertically integrated. Headquarter in Spain does a high concentration
and controls all status to provide good products to customers. Because the distribution
strategy is integrated, the products can be divided world-widely in a short time. It means that
customer can get products immediately without waiting for long times.
Fast products rotation cycle
I think this factor shows why ZARA is unique in the fashion industry. Every 2 weeks
ZARA releases brand new fashion items. This could refresh and motivate purchaser’s
curiosity and needs. Moreover, because it release its products in a short time, the image of
ZARA’s designers are always awaked and find out what the new designs have to be and this
image would give some confidence to Customer to purchase its products. Moreover,
customers do not have to walking around to find new design and wait for 3~6 month for new
collections.
3
MKTG 305
Final S.W.O.T Analysis
Yui Ota
Mar 27th 2015
Weakness
Price Problem
In Spain, ZARA is considered as a low-end product however it is categorized in a high-
end product in Asian countries. For example, in Japan when you want to buy Coat you should
pay for about over 20000 Yen to get it and it is almost 200 U.S dollars. ZARA basic which is
subsidiary of ZARA and premium line, takes 50,000 yen when you purchase outer in Japan.
ZARA is known as SPA (Specialty Store Retailor of Private label Apparel) which mean that
fashion company directly participate with doing manufacture and distribution so it can reduce
product price. However, some foreign customers would think “It takes twice to purchase if
