Management of Zara: Analytical Essay

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1. Introduction of ZARA

Zara belongs to the world largest fashion group and it is also the largest international fashion company. Zara is a Spanish clothing brand which is based in Galicia Amancio.In 1975, Zara is founded by Ortega. There are 2,220 stores in 88 countries where Zara operates. Not only it specialize in clothing but also it produces accessories, shoes, perfumes and others. Zara has a mission statement that they want to give the customers want in faster speed production.

There has a lot of impact on Zara’s store like they are temporarily closed due to the pandemic 2020 but in May, it will try to reopen and start business again. (Kala, K 22018)

2. SWOT analysis of ZARA

Provide a lot in innovation- Modern AI technology are provided with a large investment in Zara. It helps high production efficiency with high speed. And it brings many advantages to its supply chain and including the retail of network. One of Zara’s successes is that it focuses on this a lot.

Less enthusiastic in market- Zara is not as much interested in expanding of marketing and advertising as its competitors.Zara want the customers to buy their products with its taste and never try to persuade with advertisements to buy it. In coming year, Zara might be a focus on advertising and market expansion.

Having many retails channels- Zara expand its retail channel in India which is the largest market in the world and includes others countries. Although it expedition is high in China, Malaysia and Singapore, it still does not have much retails.

Expensive cost of raw materials- Costs of raw materials are raising and Zara has managed to fair in the combing of supply and demand. The more the raw materials are rise, the more expensive the fashion brands will be. This can make a lot of negative impact to the company. . (Pratap, 2019)

3. Ethical Approach

To attract customers for Zara’s band, persuading luxury brand does not need. Most companies expect their goods with high quality and high price to export high indicted groups. Zara is not more expensive than other companies, that’s what Zara success. Zara fixed reasonable prices for all types of customers. Zara pricing strategy is depending not only on price but also for affordable to target customers. To fix the price, Zara never concentrates on the costs of the company but on the consumers’ perception. The broken code and unusable code are counted by daily and they are sold with low prices. Moreover, Zara always pay discount at the end of the year to have each Zara brand in individual whether can afford or not. This is clear that Zara is always fair on customers. (YUCHENPANG, 2016)

4. One CSR approach

Zara’s CSR policy is based on the rules and regulations of manufacturers and suppliers. It is a strategy of whitewashing. It prohibits the forcing of child and labor . They aim that their workers to safety in the workplace, protected with grace and respect, to associate and to have fair wages. The quality control is monitored by the observation of standards. The labor organization has different programs to maintain better practices and industrial a global union that is involved with the respect of rights in their factories. According to an annual report by an external company, the company provides information about suppliers, employees, revenue and countries in which they analyze. Zara is involved in social programs for welfare and invested $48 million in this in last year. And last, working at Zara may create very well organized.

The objective-The main objective is to give the newer designs day on day and try to catch demand and its satisfaction. The other is to expand spread and open more retailers in main cities which are 80% covered of the world. Zara also expands in New York, Portugal, Perris and Sweden with enthusiasm.According to the business model, it aims to supply the sustainable development of society which we concerned. (Givens, L, 2019)

5.4 keys elements

Action- Zara’s appeal corporation of mission and vision statement is instability to be the superb fashion in all over the world. This is still collected till now and it is important in the growth and popularity it has collected so far.

Zara has a goal that is work for through vision statement. Especially, it is in the development of the environment and human growth. The company improved in advance from the development way by using its strategy which has described. It concentrates to make the customers’ perception whatever in high speed. One of the criticisms for Zara is its main price and it still influences the mission and vision statement in the organization.

Tangible resources- In financial, the tangible drivers involve in the main part in Zara.tangible drivers are strong and competitive in nature. The financial performance shows earnings and profits heavily.

Intangible resource- customer loyalty, and awareness of Zara brands are considered to be intangible resources that provide sure amount of two values to it. Because of its flexibility which has modern nature, Zara provides a variety of products like clothing, fashion and latest design.

Implementation

Zara will start to look the monthly reporting and forecasting. In a weekly meeting, the strategic plan is discussed by the regional market leaders. It will analyze the result and do the necessary step in the monthly meeting. Zara is focus on realizing the strategy, eCommerce and social media to promote traffic on zara.com as well as attracting visitors to the online shop.

6. Culture of Zara

To cultivate, power and to have consistency, all organizations should have various types of cultures. By the introduction of fast fashion and retail network, Zara is enthusiastic in creating of different new designs which are between all types of cultures and age’s. Nowadays, Zara played an important role to become an international fashion group. That’s why Zara’s strength which is the priority of customers first. Zara want to know its customers about its culture of company and its coke logo of it’s and they fixed its culture since started open.

Zara’s logo are fixed on men’s and women’s clothes, shoes and accessories, and also other like perfume. Young people are offered the latest fashion designs by Zara sub-brand TRF. It is clear that Zara has kept its brand culture till now and they really precious on culture. (Martin Roll, 2019)

7. Organizational structure

Unity of command-Zara organizational structure is a heroical flow of sub-level of the department and it is built by systematically. By looking Zara’s organizational structure, the employees know who to report and it is easy to connect with their college. It can improve staff productivity and make easier in work. In Zara, the employees and also the professional designers are interested what the customers want. And they create clothes with the stream of society and ideas to improve their products. Inditex includes in many retail channels and including Zara. There have store managers, local managers and country managers under the superb management of Inditex.They manage the 70,000 international staffs.

Centralization-Zara is deep in quick transportation to stores and it holds on predicting and fast charge. Zara sends twice in a week in fixed days. Trucks leave in time and goods are arrived in a fixed time to stores. When the clothes arrive to the defined place, they put coke logo and fix price. They are ready for sell. The staff which includes in production, distribution, and retailing know-how impact other services of their actions. It also concerns with customers who know the new designs of clothes will arrive in what time. Zara should control distribution and production in all its geographical areas. In this centralized way, it will help Zara to concentrate on all part of its. (TradeGecko, 2018)

Zara uses unique organizational structure. Controlling all its major operations extends Zara’s success. It rejects the strict constitution and consists mainly of three parts of Zara. There are three subsections for men and women and for kids. Communication flows are easy to approach, and international brands should research the needs and choices of people in particular areas before starting a business. It begins a timely visit to the company and brings in new customers and products. In addition, it focuses on what is currently being sold. It’s about design and product and collect customer feedback. If customers are satisfied with the requirements, it does a great job. Therefore, it increases the loss and profit.

8. Leadership theories

Although Oscar Perez is the director of Zara, little is known about the mediums of a person’s leadership style. Zara needs to understand the cultural factors behind leadership when analyzing the effectiveness of leadership styles. Spain according to Indicted and Zara’s steps should be to have a cooperative system to avoid confrontation with the natural process. The founder’s leadership style was considered dictatorial and aligned with the culture of Spain. However, Spanish culture is advanced to avoid uncertainty. Not in line with Zara’s business strategy. Because it is different from its competitors, it distributes fashion products with small products on time. Despite the limitations of Spanish culture, Zara’s leadership may be viewed as beneficial and effective from its growth. The leadership was withdrawn, despite its attractive aspects of leadership, based on theory-based suggestions and constructive criticism. The employment strategy brings up expectations.

Motivation Theories

Zara and index is young hiring creative people; young companies are based on the demographic of employees because of the training and the incentive for innovation. Young employees have expectations in the early stages of their aircraft carrier. Zara manages to achieve the desired rewards and has the effect of having high expectations, such as the company’s performance standards and expectations, as well as the company’s aspirations and growth. Even the benefits of old age are met by aging. Thus’ Herzberg’s two theories can be proven. Times create a challenging work environment that fosters creativity and puts them in charge. The failure rate in Zara is very low. Small losses are significantly counted. NO, it ensures job security. But at the same time, the company recognizes employees’ creativity. Zara and his co-defendants have been able to achieve a dictatorial style of leadership because of family control and top management in the autonomous region.

9. Recommendation of ZARA

For part of designs, Zara needs to collaborate with various designers. As a result, Zara has managed to maintain its competitive advantage to fashion. In production, it should be integrated with any production line around the world. Only then can the new technological advancements be replaced by replacing the old ones. Increasing distribution centers makes Zara faster and more efficient in to retail stores. And advertising is important when competitors are becoming more competitive and the demand is tight. Zara says it has to build its own production center with high-performance and speed key manufacturers.

10. General analysis of ZARA

Now Zara stores are seen in everywhere and their rate is increased in year-by-year. Zara is a fast fashion, fashionista. There has been considerable success in the industry by using effective retail strategies such as QR and innovation. Most players in the fashion industry are predicting future consumer preferences for fashion. In contrast, Zara has had a few designs collections this year. Therefore, Zara has a high stock exchange. This practice is among others, a leader in the Zara fashion industry. But Zara is still trying to grow its brand by expanding its reach and growing its advertising business. If Zara can improve in advertising and expand, the company will continue to lead the retail market.

11. Reference List

Kala, K. (2018, December 24). FASHION HISTORY- ZARA – Kalyani Kala – Medium. Retrieved June 15, 2020, from Medium: https://medium.com/@kalyanii8927/fashion-history-zara-19ac531d9ab1
YUCHENPANG. (2016, May 2). Zara’s secret to success retail – its pricing strategy | T1 2016 … Retrieved June 16, 2020, from Deakin Business School: https://mpk732t12016clusterb.wordpress.com/2016/05/02/zaras-secret-to-success-retail-its-pricing-strategy/
Gimenez, L. (2019, August 15). (PDF) Evaluating business ethics and CSR: Case Zara. Retrieved June 16, 2020, from ResearchGate: https://www.researchgate.net/publication/335193056_Evaluating_business_ethics_and_CS
UK ESSAYS. (2016, 12 5). Zara clothing – UK Essays. Retrieved June 16, 2020, from UK ESSAYS: https://www.ukessays.com/essays/management/zara-clothing.php
SlideShare. (2016, March 15). Business model of zara – SlideShare. Retrieved June 16, 2020, from SlideShare: https://www.slideshare.net/KanikaVerma19/business-model-of-zara
MartinRoll. (2019, December). The Secret of Zara’s Success: A Culture of Customer Co … Retrieved June 16, 2020, from MatinRoll: https://martinroll.com/resources/articles/strategy/the-secret-of-zaras-success-a-culture-of-customer-co-creation/
TradeGecko. (2018, June 25). Zara supply chain analysis – the secret behind Zara’s retail … Retrieved June 18, 2020, from TradeGecko: https://www.tradegecko.com/blog/supply-chain-management/zara-supply-chain-its-secret-to-retail
ACADEMIA. (n.d.). (PDF) ZARA final report | sejun lee – Academia.edu. Retrieved June 16, 2020, from ACADEMIA: https://www.academia.edu/7908873/ZARA_final_report

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