Zara

SOE11108

Sources of Competitive Advantage

Assessment 1

Group Presentation

PESTEL

Zara

Contents

1 Overview 3

2 Business Environment 3

3 Political 4

4 Economic 4

5 Social 5

6 Technological 5

7 Environmental 5

8 Legislative 5

9 Conclusion 5

References 6

Overview

Zara is one of the largest international fashion companies and belongs to Inditex, which is one of the largest fashion retailers worldwide. Inditex operates in textile design, distribution and manufacturing. (Inditex, 2011 b)

Zara operates in 78 countries worldwide with 1557 stores in the world’s largest cities. (Inditex, 2011 c)

The company is founded in 1975 by Amancio Ortega, located in Spain and had in 2010 a net sale of 8.088 millions of euro. (Inditex, 2011 a)

The have worldwide 1557 stores in 78 different countries. (Inditex, 2011 a)

Aim: domocratise fashion, offering latest fashion, medium quality and moderate price (Lopez & Fan, 2009)

Structure: customer oriented, satisfaction of consumer needs (Mazaira, González, & Avendano, 2003)

Business Environment

Global textile and clothing industry. (Lopez & Fan, 2009)

Main competitors: H&M, Gap and Benetton (Ghemawat & Nueno, 2006)

Dynamic and innovative sector (Nordas, 2005)

High quality fashion market vs. lower quality products (Nordas, 2005)

Production in Europe vs. Production in low cost (Nordas, 2005)

Political

Omair

Economic

Production NOT transferred to low cost locations – Zara resisted the industry-wide trend towards transferring fast fashion production to low cost countries like for example China. Zara states that this gives the greater control as it controls most of its steps on the Supply Chain, designing, manufacturing and distributing of products (CNN, 2001). In the UK 50% of the product Zara sells are manufactured in Spain, 26% in the rest of Europe and 24% in Asian and African countries → clothes with longer shelf life like...