- 1 zara publicly traded
- 1.1 Welcome To Zara General Trading
- 1.2 Case Study Sample: Business Report on Zara
- 1.3 Zara vs. H&M vs. Forever 21: Comparing Fast Fashion Retailers
zara publicly traded
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Welcome To Zara General Trading
Welcome to ZARA GENERAL TRADING, a private owned company engaged in general trading, headquartered in Dubai, world’s trading hub. The company’s main business activities are in Fast Moving Consumer Goods, Food Products, Consumer Electronics & Household Appliances and Building Materials. The company carries a much diversified range of brands & products under these categories..
To improve the quality of life for our people, customers and society.
To be a pioneering multinational, utilizing international best practices and to live by our core values.
Case Study Sample: Business Report on Zara
PART 1: TERMS OF REFERENCE/EXECUTIVE SUMMARY
This report is based on Zara Company which is a Zara is a publicly traded apparel company with headquarters in Spain and other locations within UK and U.S. among other countries. The report focuses on a critical analysis of the company to identify any problem or opportunity that can be exploited to improve the company’s success. To perform the analysis of Zara, the report will make use of powerful conceptual frameworks which are important in determining the internal and external business environment within which the company operates. These include; identification of current market situation, SWOT analysis, competitor analysis and PEST analysis. Consequently, the report will present the findings and recommendations for solving the identified problem and the recommendations for improving the situation. Zara provides a good case to demonstrate how a company within the apparel industry can succeed by creating a powerful brand and by creating customer value along the entire value chain.
PART 2: METHODOLOGY/PROCEDURE
To establish the current position of Zara and identify the problems or opportunities which remain to be exploited, a critical analysis of the company’s internal and external business environment will be performed. First, the report will give an overview of the company and the current market situation. Secondly, a SWOT analysis which involves analysis of the company’s strengths, weaknesses, opportunities and threats will be performed. Within the SWOT analysis, the strengths and weaknesses will be used to establish the situation within the internal environment while opportunities and threats will be used to offer understanding on the external environment.
Next, a PEST analysis which examines the company’s macro-environment in terms of the political, economic, and social and technological environment will be performed (Gallaugher 2008). After the PEST analysis, the report will carry out a competitor analysis to determine the competitive environment in terms of the strengths and weaknesses of the major competitors (Keller 2012).
The information on competitor analysis will be used to determine the areas that Zara needs to improve or whether it should put in place new strategies to cope with the competition. At the end of each analysis, the company will provide the strategic implication to point out what each means for Zara’s success. Finally, the report will concentrate on explaining the identified problem or opportunity in order to offer appropriate recommendations on how the situation can be improved.
This section presents the major findings of the analysis of Zara and the implications on Zara’s business strategy. The major findings are divided into the following categories:
I. Zara’s current market situation
Zara is a publicly traded company which operates under the parent company the Inditex Group whose headquarters are in Spain, Europe. It was established in 1975 by named Amancio Ortega. Presently, Zara has more than 1,600 physical stores located in over 77 countries around the world. Zara’s business strategy within the fashion industry is based on an efficient supply chain system in which new fashion designs are released within a relatively short period (Keller 2012). Zara’s new fashion products are developed within four to five weeks and delivered to the various stores. This is a record turnover time compared to the industry average which is about six months (Awat and José 2006). Zara is also a market leader in terms of developing new designs as more than 10,000 new designs are released to the market every year.
Besides, Zara has an exemplary strategy of production and marketing as it does not rely on heavy advertising and minimizing production costs like other players within the industry. Instead, the company relies on vertical integration strategy in which the company’s products are produced in a central location and distributed to the worldwide store locations within the shortest time possible. To compensate for the advertising, Zara relies on the strategy of investing in attracting and retaining a pool of talented designers who are extremely committed in developing exceptional designs at a higher rate than the competitors (Awat and José 2006). In this way, the company is able to meet the expectations of the customers who are interested in shopping for the latest fashion regardless of whether the products are offered at a higher price than the market average. However, Zara is moving towards adoption of an online shopping in order to avoid overreliance on the physical store locations. The online shopping offers a good opportunity for the company as it looks forward to increase the market share and to cope with the intense competition from the existing international players within the apparel industry.
In terms of the market, Zara’s products are targeted at customers who are keen on shopping form variety of trendy wear including casual clothes, official wear, shoes, men’s accessories, children clothes and cosmetics among other apparel items. Zara offers its customers with a unique opportunity to sample new fashion trends within a short time. Besides, Zara’s products are differentiated in terms of size and cost in order to increase the customer base. In terms of location, Zara has many flagship stores which are characterized by superior interior designs with locations in prime areas like in George Street in London, Rathenauplatz in Frankfurt, Pitt Street in Sydney and Van Baerlestraat in Amsterdam among other areas (Keller 2012). In terms of marketing, Zara does not put emphasis on advertisements but rather on store locations. The company is looking forward to extent its presence from the traditional European markets using a multi-channel strategy to reach to new markets in the U.S. and Asian countries.
SWOT analysis is based on an identification of the company’s internal strengths and weaknesses as well as the external opportunities and potential threats within the operating environment. Zara is a strong brand within the global apparel retail industry due to its ability to develop new designs and avail them to the stores within a short time. Zara has a strictly vertical integrated structure which enables quick decision making, fast distribution of new designs and cost reduction (Dutta 2002). Zara’s strategy also creates enables it to maximize the sales, enhance customer loyalty and to create a unique customer value…
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Zara vs. H&M vs. Forever 21: Comparing Fast Fashion Retailers
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There was a time when retailers such as Abercrombie & Fitch and American Eagle ruled the fashion roost. Those stores’ success has faded as “fast fashion” retailers began to offer consumers high-end designer styles at rock-bottom prices.
While some bemoan the popularity of fast fashion, it offers all buyers the opportunity to wear the cutting edge designs they love. Dealspotr took a look at reviews and articles from across the web to create a convenient comparison between three of fast fashion’s biggest players – Zara, H&M, and Forever 21.
Women’s, Men’s, and Children’s Clothing
The worldwide leader in not just fast fashion, but all fashion retail sales is Spanish-based Zara. According to Economic Times, this popular retailer embraces consumers’ fast-changing tastes, offering tens of thousands of new designs each year.
Despite running at a slightly higher price point than the competition, Zara offers a great value. Bustle.com writer Kat George notes Zara’s products last longer and look better than the competition after repeated wears. George also points out that Zara carries a wide spectrum of inexpensive polyester and nylon-based products.
Zara carries Women’s and Men’s clothing and accessories, plus they have a wide selection of Kid’s clothing.
Swedish retailer H&M lies at the other end of the price spectrum. As Fashion Spot writes, this fashion retail store is most well known for its stock of “chic but trendy runway-inspired pieces.” H&M is the second-largest fast fashion retailer in the world.
According to Fashion United, by collaborating with high fashion designers, H&M is able to set itself apart from its competitors. These high-profile partnerships go a long way towards expanding the brand’s awareness as well. Past collaborators include Lanvin, Versace, Maison Martin Margiela, Isabel Marant, and Stella McCartney.
H&M carries Men’s, Women’s, and Children’s clothing, and homewares for the kitchen, living room, and bedroom. H&M has expanded their offerings to include outside brands such as Monki, Cheap Monday, COS, and others.
Fashion United explains that American-based Forever 21’s biggest strength is the sheer amount of ever-shifting merchandise available at its stores across the globe. A player in the fast fashion game from its outset, Forever 21 has mastered the art of offering stylish and very low-cost clothing and accessories. It is unsurprising that the store is very popular with the teen fashion crowd.
Forever 21 has a men’s line, several women’s lines (including a plus-size range of clothing), and a girl’s collection. All of these lines include clothing, accessories, and footwear. Another trait that makes Forever 21 distinct is that it only offers a single, eponymous brand.
Advantage: Zara. While it has higher overall prices than Forever 21 and H&M, the quality of the materials and designs makes it easy to depart with the extra cash.
Ownership and Manufacturing Practices
Zara is owned and operated by Inditex, a publicly owned and traded corporation. The company has set the trend in fast fashion manufacturing.
According to Economic Times, the retailer built 14 factories in its home country of Spain where robots work around the clock to cut, dye, and assemble semi-finished products. These partially-completed items are then sent to one of 350 “finishing shops” in Portugal or Northwestern Spain.
A few years ago, Zara faced pressure from environmental groups to eliminate any hazardous chemicals in their products. In 2012, Greenpeace announced that Zara had committed itself to eliminating all hazardous chemical discharge from its suppliers and products by 2020.
Another publicly traded company, H&M keeps its 200-plus-strong design team at home in Sweden. However, production is outsourced to suppliers across Europe and Asia. Approximately two-thirds of its products are produced in Asia.
Because its labor is outsourced, it can be difficult for the company to maintain a high standard of labor quality. H&M has experienced a handful of controversies, though in the company’s defense the issues have been resolved quickly. In another sign of good-faith transparency, H&M produces a list of the factories they use; this is not a common practice for retailers.
Additionally, H&M has made it an aim to pay all of its textile workers a living wage by 2018 and backed that up with several pay increases in select countries.
Forever 21 is an American success story. Founded in 1984 as Fashion 21 by the South Korean husband-and-wife team of Do Won and Jin Sook Chang in the Los Angeles neighborhood of Highland Park, the company has experienced explosive growth. From day one, Forever 21 has seen success and widespread expansion.
Still a privately owned business, Forever 21 has faced its fair share of controversies from a labor and copyright standpoint. The company has taken on lawsuits from former employees and is currently facing a lawsuit brought by several software developers, alleging piracy of design software like AutoCAD and Photoshop.
Advantage: H&M. While all three of these retailers have faced several controversies, H&M is the most transparent and quick-reacting.
Online and Brick-and-Mortar Shopping
Zara has locations all across the globe and an online store which serves 26 different markets. Bustle.com goes so far as to say Zara’s e-commerce site blows the competition out of the water. Its online store offers free shipping on orders over $50.
While the retailer’s full collection can be found online, Zara’s 2,000+ physical locations are also well stocked. Each location receives 2-6 new product deliveries per week, ensuring that it always has up-to-the-moment fashions.
For years, H&M solely relied upon its physical locations to generate profits. These days the company has gained even more market traction by launching a full-fledged e-commerce site that is available in nearly 60 countries. These countries are located all across the world in regions such as Asia Pacific, the Americas, the Middle East, Africa, and of course H&M’s home continent, Europe.
In addition to recently transitioning into a more modern business model with online retail, H&M was once exclusively available in European markets. With the booming global success of their fast fashion competitors, the company smartly began investing in foreign markets.
Today, H&M has 3,500 stores located in 57 countries across the world. This expansion was a smashing success, as 95 percent of the company’s total sales come from markets outside of Europe.
In addition to its standard chain of retail outlets, H&M has developed its own model of “above average” flagship stores, with 300 opening during the initial roll-out.
With just 610 locations, Forever 21 is a much smaller operation than its fast fashion competitors. Forever 21 has opened retail locations in Africa, the Americas, Europe, and Asia/Oceana.
Locations are the result of Forever 21 integrating its online store and physical locations into flagship stores. These locations differ from the typical outlet because they offer all of its product collections as opposed to a rotating collection.
In addition to having fewer brick-and-mortar stores than the competition, Forever 21 also operates a small-scale online store. There are individual stores for the United States, China, South Korea, United Kingdom, Canada, India, Japan, and the European Union (which has language options for Dutch, Spanish, English, French, and German).
Like the industry-leading Zara, Forever 21 offers free shipping for online orders over $50.
Advantage: Tie. Each of these stores has a niche advantage; Zara dominates with the best e-commerce experience, H&M has the most widespread physical locations, and Forever 21 offers the “fastest” fashion in their retail locations.
By offering the masses the kinds of designs that were once only available to the wealthy, fast fashion is certainly a retail niche that is not going anywhere. Zara, H&M, and Forever 21 all offer fairly similar products that prove to be wildly popular across many demographics.
Zara parent breaks Soho record with $20,000 psf retail condo
Aside from its eye-popping $280 million price tag, mondo clothier Inditex’s impending purchase of a retail condo on Broadway in Soho will break the neighborhood’s retail record with a price tag of more than $20,000 per square foot.
The international fashion corporation, which is the parent company of Zara, signed a contract to pay $20,588 a foot for the 13,600-square-foot ground floor of a newly created retail condo at 503 Broadway.
News of the sale was first reported by the New York Post. The deal is expected to close Tuesday .
The space will be home to a Zara store, and includes an additional 27,588 square feet on the second floor and in the cellar.
The deal, negotiated on both sides by David Ash of Prince Realty Advisors, works out to a per-square-foot price that is more than a third larger than the previous record set a year ago.
In January 2014, Aurora Capital Associates paid $15,273 per square foot to purchase a 2,750 square-foot retail condo at 114 Prince Street for $42 million. That deal was negotiated by Eastdil Secured’s Adam Spies, Adam Doneger and Doug Harmon.
Of the Inditex deal, Ash said it was a complicated affair that first started out in 2011 with the company interested in a long-term lease.
During negotiations, he suggested building owner HSR Corp. consider creating a retail condo, which required Inditex to buy out tenant Old Navy’s lease that ran through 2018.