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What Business is Zara In Revised

Solution Id Length Case Author Case Publisher
2518 1159 Words (6 Pages) Daniel Doiron Ivey Publishing : W19157
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Zara is one of the leading flagship clothing stores in Spain. It is managed by successful fashion retailer Inditex. For a long time, the firm enjoyed significant revenues and profits. Zara is in the clothing manufacturing and retailing business (BOF, 2021). Zara has an online and offline presence with thousands of stores and has turned out to be an ambient international brand (Ha, 2021).

Following questions are answered in this case study solution:

  1. How is the industry where Zara competes?

  2. Inditex / Zara - Unique approach?

  3. Is it time for Inditex / Zara to reinvent its business model? What would you do?

Case Study Questions Answers

1. How is the industry where Zara competes?

Many competitors enter the already saturated fashion industry where Zara works. But, Zara has proved to be resilient as it has always prioritized its customers while analyzing the industry’s external environment. Zara’s industry has a promising future potential as it is forecasted that the international apparel market will grow from 1,705 billion USD to 2,246 billion USD (Shahbandeh, 2021). Global players in the apparel industry include Zara along with its competitors such as “Nike”, “H&M”, and “Uniqlo” (owned by Fast Retailing), which means that the competitive rivalry is high. The industry is in general, is very competitive as well because of good market segmentation, many brands providing the same products, and various small and big enterprises working in the market. Product quality and unique features have been pivotal for Zara’s brand image. Local and international retailers also rival Zara, those having a great brand image, charging high prices for their products and generating good revenues. As the apparel industry is old enough and provides low barriers of entry, the market is getting saturated rapidly. Initially, when Zara opened its stores, it enjoyed a good market influenced by the transforming population and urbanization (Crofton & Dopico, 2007). However, with time, as it is with any successful fresh business, several rivals came up. These various competitors have presented different business models and marketing strategies. The “Digital Adoption” by customers in the apparel industry is fast especially since the dawn of the COVID-19 pandemic in 2020 (Berthene, 2021). Zara has adopted this change as per its consumers’ demand, thus maintaining its industry position.

2. Inditex / Zara - Unique approach?

Zara’s brand success is due to Inditex’s unique business approach. From designing, manufacturing, and marketing to sales, order-shipment, and promotions, Inditex has organized everything vertically for Zara to satisfy its customers’ needs and wants. This extensive vertical integration allows Zara to have greater control over its communications, operations, and ability to maintain flexible supply and demand chains. 

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