3. Strengths “Zara is a very powerful brand and influential in overseas markets as America, Asia, Europe and Africa” (according to article Best Global Brands 2010, 14 Sep 2010).”Zara needs 2 weeks to design a new product and to bring in stores by meeting costumers preferences, meantime its competitors need 6-8weeks”(chapter11-The strategy of international business). It invests huge amounts of money in order to understand and analyze huge data sets to find efficient ways to appeal to its customers. With two distinct pricing categories for tops in the market, customer purchases will depend on product type, quality and detailing. Africa.
Technology also increases a firm’s responsiveness to customer.
2.4 SWOT Analysis
At H&M all cotton available will be 100% organic by next year. Strategically, Zara splits its focus across all three channels. They are recognised for inexpensive but trendy clothing. Please join StudyMode to read the full document. 4. Its first shop opened in Spain in 1975. 3.3. A rise in labor or overall production cost can put the company under financial distress. B.
9 Growth strategies p. 10 PEST analysis p. 10 & 11 Value chain p. 11 & 12 SWOT analysis p. 12 Zara and H&M Comparison of the 4 P’s p. 13 Porters 5 forces p. 14 Comparison of the value chain p. 15 Group reflection Enclosed * Introduction We have been given an assignment, where we have been divided into groups. The PESTLE Analysis highlights the different extrinsic scenarios which impact the business of the brand. H&M’s new concept stores and their success will probably play a greater role in the future if H&M wish to continue their fantastic growth figures. 2.
Political Landscape 3
Z A R A
Zara is a relatively less expensive brand in comparison to other European brands which rewards Zara a greater market share in comparison to its competitors. H&M is a Swedish company founded in 1947. EXECUTIVE SUMMARY
Date: 24/10 2008
• Strong marketing skills.
Doing an analysis of this type is a good way to better understand a business and its markets, and can also show potential investors that all options open to, or affecting a business at a given time have been thought about thoroughly.
H&M is known for collaborations with designers such as Giambattista Valli, Alexander Wang, Moschino, and more, while Zara works with fashion insiders to endorse its products.
ROLL NO. Experience can play a big role in business, but strategy has been the edge of Zara to gain competitive advantage in the business. 3. After we have analyzed the two companies we will compare their 4 P’s and their value chain, likewise we... ...SWOT analyse
To conserve energy, Zara have focused on eco-friendly approaches in managing its stores. Growth strategies p. 10
Marketing & sales. 2.6 Hierarchy of strategy
To conclude, the above Zara PESTLE Analysis highlights the various elements which impact its business performance. A full suite of products to drive sales and increase retail margins, Global retail market data, collected and categorized by our AI engine, Dashboards to track global price, product and assortment data, Expert industry, trend, and runway analysis, published daily.
• Lack of customer service. The first... ...COMPANY ANALYSIS & PROBLEM IDENTIFICATION MARKETING MANAGEMENT BMKT601
• Catchy advertisements.
3.1. PESTLE Analysis of Zara analyses the brand on its business tactics. 2.5 Benchmarking
Their focus is to establish these principles across the entire line of their operating business as well as supply chain.
Value chain p. 11 & 12
PESTLE analysis of Zara: Final Thoughts. The political factors in the Zara PESTLE Analysis can be explained as follows: Zara is a Spanish brand that was born out of the European union and has successfully established operations all over the world.
H&M’s organizational structure 12
A sign of confidence and clarity? Hennes & Mauritz stands as one of the forefront competitors within the fast fashion retailers, characterised by a wide geographical presence spanning 38 countries and a turnover of £127 billion in 2010. And Zara announced that all of its clothes will be made from 100% sustainable fabrics by 2025. 1. The country has a well-established framework of extensive trade agreement which helps Zara to import raw materials and export finished products.
Strategy and environment 26
World events and trends of monumental significance have occurred, since the little Swedish ready-to-wear chain developed into a multinational concern with stores in 18 different countries.
While H&M’s predominant consumer is shopping for womenswear, the Zara customer could be more mature and shop across the breadth of the retailer’s offering for his or her partner and children. POSITIONING 14
EXECUTIVE SUMMARY 3
Browse analysis of more brands and companies similar to Zara PESTLE Analysis. SWOT analysis p. 7 & 8
Below are the economic factors in the PESTLE Analysis of Zara: Since Spain has one the highest rate of unemployment and Zara is a Spanish brand, it enjoys the benefit of low cost of labor especially in comparison to other western European countries such as France, Germany and the United Kingdom.
This article has been researched & authored by the Content & Research Team. We can prove this with EDITED data, which reveals the speed at which Zara womenswear experiences sell out is an average of 63 days, outpacing H&M at 119, Forever 21 at 168 and Topshop at 85.
There are also uncertainties of H&M’s future since they are in the middle of a shift of expansion focus from the European and North American markets to China, Japan and Russia. Competition in the Industry. A. It wasn’t until this year, both brands tapped into influencer marketing to promote its product.
The European union is UK’s biggest export market for textiles and clothing. SEGMENTATION 11
Zara PESTLE Analysis examines the various external factors like political, economic, social, technological (PEST) which impacts its business along with legal & environmental factors. Zara and H&M
6. Value chain p. 6 & 7
Ensuring a low rate of discounting combined with consistent newness equals a rapid product sell out. • Lower quality of clothing materials. They have decided to achieve 17 goals on Sustainable Development in order to overcome the problem of climate change.
14. • Expanding the number of stores in every Quizzes test your expertise in business and Skill tests evaluate your management traits. 2-3
Since today’s customers are growing more eco-conscious than ever brands like Zara need to adopt sustainable ways in order to avoid the negative impacts.
26.4% of Zara’s current range has seen replenishment compared to 17.6% at H&M. Zara on the other hand, only needs a month to create a new clothing line. Since H&M is based in Sweden but they do a lot of their trading in foreign currency the exchange rates has a very big impact on the profit. H&M has always been Zaras competitor in this industry. 3.0 Conclusion
: 16 Zara is a flagship brand of the Spanish retail group, Inditex group. We’ve turned to EDITED’s retail data platform to understand what sets them apart. This being said, the company still experiences strong forces that hinder growth and even the maintenance of market share. 3. Evidently, Zara doesn’t slow its processes with mass restocking. The SWOT analysis is a method of assessing a business, its resources, and its environment. Service. Cotton On and GAP all have similar styles
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