Extensive paper outline

Zara

Is it common for you to think that the most expensive should always be the best option? I thought it until I met Zara.

1) Introduction

a) The Fashion Industry

b) The company

Zara is one of the largest international fashion companies with stores almost around the world. Its strategy and the way the company understand the industry has dramatically changed “the fashion background”, and now competitors must adapt their strategies to every Zara’s movement. Therefore, it is very interesting to observe the differences between Zara’s and the other competitors’ strategies so as to identify a different but effective way to do business and gain customer insights.

c) Zara’s current strategy vs. the traditional retailer

Zara differs from its competitors due to its core competences that provide them with a competitive advantage in the industry. Usually, traditional retailers in the industry outsource their production to concentrate only on distributing and retailing. Nevertheless, Zara works on the whole value chain, which means that they are able to have much more influence and control over the industry than its competitors.

2) Body

a) What makes Zara appeal to customers?

The key point to Zara’s success is that every time potential customers go to Zara, they realize that what they saw two weeks before is not in the store anymore. Controlling the whole value chain, Zara is able to be flexible in the variety, amount and frequency of the new clothing designs produced. Therefore, as customers only have a few opportunities to get the product wanted, purchasing in Zara becomes a unique and unrepeatable experience for them.

b) What makes Zara special?

When comparing Zara to a traditional retailer, the key point to understand differences is the climate of scarcity created in Zara’s stores. This allows them to minimize costs to sell their items at full price. In other words, they don’t have to reduce prices once merchandises become obsolete. Moreover, they take advantage of its quickness so as to respond to the demand better than competitors.

c) Gaining insights or “creating” insights

One of the features of Zara’s strategy is that they don’t have a strict department of marketing. By developing Zara’s philosophy, they can anticipate and persuade the customer habits. Therefore, they don’t follow fashion trends, they just create them.

3) Conclusion

Zara’s ability to control the whole value chain allows them to be the most efficient in the industry. This can be seen, among others, in the marketing strategy they follow which let them the opportunity to lead the whole market and persuade customer habits.