Case study on Zara Essay Example | Topics and Well Written Essays - 4500 words

Case study on Zara - Essay Example 67). Political Factors While considering the political aspect, apparel companies should have various interactions with the governments to understand the government policies for the intercession in the legal and economic aspects to aid the decision making process. Government bodies, especially those belonging to the emerging economises like India and China have welcomed foreign invest with open arms. However, there are different restrictions in various nations that need to be considered before making market entry. Add to that the trade policies in different countries may need certain adjustments on the part of the companies. E.g. China has a currency policy that results in imports to be higher than the market price. Economic Factors At present the northern American and the EU nations are looking to comeback from the shock-waves of the economic down-turn. Downward economic trend may have transformed regular clothing purchases into luxury purchases or ‘splurge’ as due to th e downturn there might have been a dip in the disposable incomes. Also the rise in the rates of personal saving may have had a negative impact on the consumer demand. However, the recent global growth went up to 3.6 percent in the 1st quarter of 2012. This likely to supplement the expansion strategy of the apparel companies as majority of the apparel companies are looking to enter emerging economies like India and China (Henry, 2008, p. 89). Social Factors As mentioned before due to the downward economic trend consumers are looking to spend more on education, leisure, travel, healthcare, electronics, etc and relatively less on clothing. Also the consumers have become a lot more environment conscious and look to do business with... Zara is one of the leading global fast-fashion brands. The organization has implemented both cost leadership and differentiation strategy as their business level strategy. They have effectively implemented vertical integration strategy in their supply chain network. Though Zara is one of the renowned and popular global brands, the organization may face several difficulties through their centralized manufacturing strategy. Their business model is cost-effective and they have set up business goals and objectives effectively basis on the model. It is feasible that the execution of determined strategies have bought success for Zara. Finally, it can be said the Zara should look to expand their business and adopt decentralize manufacturing process in the developing BRICK countries. Zara quickly develops the new feature and designs as the organization has the fast development option from the concept to point of sales. On an average, it takes 6 weeks. The positioning of Zara clearly address that it is not a luxurious fashion brand but the organization used to target the price sensitive people with the help of fashionable designs of clothes in reasonable price level. They have always differentiated their product line by the relentless introduction of latest and new designed clothes in less quantity at rapid speed and the affordable price level of the products is the evidence of the large scale customization necessity of the target audience.