Case Study On Zara Fashion - by Cherylk



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Case Study On Zara Fashion

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1. Was Galicia (Spain) the right home base for the emergence of apparel retailing powerhouse?

According to the article, Galicia was the third poorest of Spain’s regions with high unemployment rate and poor communication links (Ghemawat & Nueno 2001). In addition to that, the people heavily relied on agriculture and fishing. Despite its famous history, as tailors for the aristocracy, Galicia lacked a strong local demand for the apparel industry and a strong base upstream in textiles. Moreover, there were no technical institutes and universities to facilitate specialized training. However, Zara uses location as their competitive advantage. According to Porter (1998), the competitive advantage of a location lie in the quality of the environment it provides for achieving high and rising levels of productivity in a particular field. In this case, Zara took advantage of Galicia’s geographical proximity to Europe, as it is in the corner of Europe, hence reducing transportation costs, employed labour at cheap rates, and the area has always been well versed with apparels. In brief, even though Galicia has its limitations, the advantages clearly outweigh the drawbacks. Hence, in my opinion, I think Galicia is certainly a fertile place for apparel retailing.

2. What do you think of Zara’s past international strategy? Evaluate, in particular, its past strategy for product market selection, its mode of entry and its standardisation of the marketing approach.

Zara’s past international strategy was admirable because it adopted a balanced mixture of standardization and customization. In terms of standardization, Zara followed regular procedures in selecting and entering certain market which made operations easier. They usually expand into countries with similar or if not, favourable micro and macro economic conditions. At the same time, there are rooms left for customization in these regular procedures such as, different entry modes and different brand positioning in...

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