Business Level Strategy Of Zara's Business Strategy
4.1 Business level strategy of Zara
Michael Porter also formulated a theory of how company can select a business level strategy. The organization must choose between two basic ways of increasing the value of an organization’s product which is differentiating the product to add value or lowering the costs of value creation. Based on Zara’s company the business level strategy is based on focusing both and differentiation cost leadership. Most important point of this strategy is to maintain balance between low cost and differentiated products.
With a differentiation strategy, Zara try to gain a competitive advantage by focusing all the energies of the organizations departments on …show more content…
With a low cost strategy, Zara try to gain a competitive advantage by focusing the energy of all the organization departments on driving the organization’s costs down. Organizations pursuing a low cost strategy can sell a product for less than their rivals and yet still make a profit. In order to achieve low costs but maintain high fashion, Zara imitates the latest haute couture designs and makes similar products with cheap materials. By this strategy of Zara, company lowers its selling price and uses cost leadership strategy. The core competencies of Zara are fast and powerful design team, fast fashion brand image, quick production process, frequent new products and low …show more content…
Zara’s have the goal to grow their companies by seeking out new opportunities to use organizational resources to satisfy customer needs. Besides, there are also help their organizations respond to threats due to changing forces in the task or general environment. The principle corporate level strategies that managers use are international expansion and vertical integration. 4.2.1 International expansion
Zara decide on the appropriate way to compete internationally. If competing in more than one national market, Zara’s must ask themselves to what extent their company should customize its product’s features and marketing plans to suit differing national conditions. Thru global strategy Zara selling the same standardized product and using the same basic marketing approach in each national market. If Zara decide to customize products to specific national conditions, they adopt a multi domestic strategy.