Introduction to Zara - (Inditex)
Zara is Spanish owned designer wear retailer based in Arteixo, Galicia. Zara was founded in year 1975 by Amancio Ortega and Rosalía Mera. Zara is the flagship store of the Inditex (Industria de Diseño Textil, S.A) Group.
Inditex group claimed to be the largest apparel retailer in the industry which own some of the world’s famous brands such as Massimo Dutti, Pull and Bear, Oysho, Uterqüe, Stradivarius, Zara Home and Bershka after Zara was formed. The group owns 6200 stores worldwide which operates in 62 territories.
The main strategy of the company is to design and manufacture almost everything by itself. Majority of the stores are corporate owned and few franchised stores are located on offshore where …show more content…
At the mean time loyalty customers for different brand may get disappointed on their brand which also calculates a disadvantage to the Company.
How successful do you think Zara has been in meeting the ‘risk of cannibalization’ as a consequence of the multi-brand strategy?
Cannibalization can be identified as reduction in Sales volume, revenue and the market share of a specific product in place of introducing another product by the same producer.
However, Zara also has the risk of cannibalization of their own brands as they practice the multi brand strategy in most of the territories. Zara has taken several steps to overcome this draw back by using the differentiation strategy. Zara executes this strategy by differentiating the brands through products, target markets, store presentation and retail image.
When analyzed the Zara’s Product Portfolio, a certain brand is specialized in certain product line which helps the brands not to collapse or overlap each other.
Below tables shows some which Brands are specialized for which product and the relevant details for each brand promoted by …show more content…
Joint venture is an ideal method of internationalization when it comes to markets which has a geographic and a cultural distant. This methodology is wide used when Zara finds it difficult to acquire the foreign Market and to access the properties and establish retail outlets.
In year 2009, Zara entered into a joint venture with TATA group where Zara owns 51% of the venture while TATA holds the rest. TATA group is a leading and a fast growing company with many business lines in several industries.
Advantages and Disadvantages in venturing with TATA
Advantages
- Tata is an internationally and locally recognized company. Therefore venturing with TATA gives Zara an easy way into the Indian Market. TATA has huge customer base and also has a good brand reputation in many industries. As TATA is a wide Spread Company all over India, Zara will be able to reach the greater capacity of the market with no extra effort.
- TATA has skillful and strong labor force with expertise. Zara can utilize the same without investing on those aspects.
- TATA has the access to Labor, Machinery, and Land etc in the local market. Therefore Zara has the ability to use them without making extra effort to seek the local market and adapt to the
Zara is Spanish owned designer wear retailer based in Arteixo, Galicia. Zara was founded in year 1975 by Amancio Ortega and Rosalía Mera. Zara is the flagship store of the Inditex (Industria de Diseño Textil, S.A) Group.
Inditex group claimed to be the largest apparel retailer in the industry which own some of the world’s famous brands such as Massimo Dutti, Pull and Bear, Oysho, Uterqüe, Stradivarius, Zara Home and Bershka after Zara was formed. The group owns 6200 stores worldwide which operates in 62 territories.
The main strategy of the company is to design and manufacture almost everything by itself. Majority of the stores are corporate owned and few franchised stores are located on offshore where …show more content…
At the mean time loyalty customers for different brand may get disappointed on their brand which also calculates a disadvantage to the Company.
How successful do you think Zara has been in meeting the ‘risk of cannibalization’ as a consequence of the multi-brand strategy?
Cannibalization can be identified as reduction in Sales volume, revenue and the market share of a specific product in place of introducing another product by the same producer.
However, Zara also has the risk of cannibalization of their own brands as they practice the multi brand strategy in most of the territories. Zara has taken several steps to overcome this draw back by using the differentiation strategy. Zara executes this strategy by differentiating the brands through products, target markets, store presentation and retail image.
When analyzed the Zara’s Product Portfolio, a certain brand is specialized in certain product line which helps the brands not to collapse or overlap each other.
Below tables shows some which Brands are specialized for which product and the relevant details for each brand promoted by …show more content…
Joint venture is an ideal method of internationalization when it comes to markets which has a geographic and a cultural distant. This methodology is wide used when Zara finds it difficult to acquire the foreign Market and to access the properties and establish retail outlets.
In year 2009, Zara entered into a joint venture with TATA group where Zara owns 51% of the venture while TATA holds the rest. TATA group is a leading and a fast growing company with many business lines in several industries.
Advantages and Disadvantages in venturing with TATA
Advantages
- Tata is an internationally and locally recognized company. Therefore venturing with TATA gives Zara an easy way into the Indian Market. TATA has huge customer base and also has a good brand reputation in many industries. As TATA is a wide Spread Company all over India, Zara will be able to reach the greater capacity of the market with no extra effort.
- TATA has skillful and strong labor force with expertise. Zara can utilize the same without investing on those aspects.
- TATA has the access to Labor, Machinery, and Land etc in the local market. Therefore Zara has the ability to use them without making extra effort to seek the local market and adapt to the