Fashion Trend Case Study
Introduction
The fashion industry has changed over a period of time due to the growth of boundaries. This is attributed to the varying dynamics of the industry; declining mass production, altered structural aspects in the supply chain, need for more affordable cost and quality. This shows that fashion retailers are able to acquire a competitive power in the market through making sure through which they get their products to the market for the consumers (McAfee, Dessain, & Sjoman, 2007, 4). Consumers are hence able to get product easy and of high quality. Fast fashion has been able to meet the needs of consumers while trying to acquire major merchandize turnover to retailers than local rivals. The Zara case study reported sales $8.15 billion to its competitors Hennes & Mauritz 0f $7.87 billion (Dutta, 2002, 13). This was the consumer’s one stop shop due to the quality products offered both globally and locally.
This paper will focus on the fashion trend of the Zara case study. The paper will look at the varied roles that consumers play in the market and how the alter the market. From this, the paper will focus on the globalization of Zara from how it started and to how it grew to become a global company. Then the paper focusses on the theories that arise from the Zara case study and how they relate to the company’s techniques to appeal to the consumers.
Fast-Fashion Strategy: Zara Case study
Zara is a Spanish apparel store that is completely integrated. The company has been on the fore front in terms of technology by acquiring machines and applying their resources to acquire new ideas in shortest time (Delagarde, and Baykal, 2011, 34; McAfee, 2004, 23). This is focused on getting the products out to the consumers at the shortest possible time. Any delay would make other competitors go to other stores. In 2006, Zara’s stores were localized even though they had small labor costs that rivals benefitted most.
Zara created a global brand based on the consumer concept of fast-fashion. In a good year, Zara sold close to 10,000 new items which is about three times of its rivals (Capell, 2008, 21). From its creation to the time it reaches the stores followed by advertising, consumers are well informed and are able to get new products. So as to be able to appeal to most consumers, Zara makes use of low cost strategy in combination with reduced stock for all the stores where consumers are available. Consumer’s perception of urgency is influenced through not restocking. This shields from any losses on the part of the retailer, while any product that is not successful in the local market is moved to other countries.
Zara makes use of point-of-sale that send details to its headquarters in Spain, displaying real-time information for consumers (Delagarde, and Baykal, 2011, 42). Up-to-date information regard the consumers are left to the local managers of the company for them to be able to get new garments. Information moves from the local company to global stores as the digital assistant use it daily. They are able to acquire new designs and order new materials. This local influence assists Zara regarding consumer’s details to act locally and be up to date with local cultural variation.
Zara’s marketing and advertising techniques to consumers are outstanding. The company uses about 0.3% of promotional products to the consumers. Additionally, the retailer uses location methods, looking for hot spots in malls with many customers (Thomas, 2006, 27). Accordingly, traffic is created through mall location while store traffic is managed through merchandize presentation. Promotion is hence acquired through spread by mouth.
Theories of Globalization of Zara
- Knowledge sharing
Knowledge sharing and management are what makes Zara effective. This makes the communication line between the retailer and consumer to be effective to the company. This connects well with the knowledge flow model as it is bound to lead to successful globalization. Additionally, it makes it possible for the exchange of information with foreign centers, back to the local units and then back to foreign markets (Jonsson, 2008, 25). Precise knowledge of products, consumer reaction to new products and local fashions are exchanged.
All the stores by Zara are built using primary models and operation aspects. The focus on Zara in knowledge sharing allows for sharing of knowledge. This upholds the globalization model applied by Zara (Jonsson, 2008, 43). Through this, consumers are able to get quality products through the company’s reduction of risk and safeguarding data.
- Resource-based view
Zara’s globalization efficiency can be described using competitive ability and transaction-based ability. Using a vertically combined company, Zara managed all the levels of tis clothing line in terms of distribution and sales. The consumers have been able to acquire the latest trend with the help of new technology and information (Ferdows, Lewis, & Machuca, 2003, 63). The variation from one company to another enables consumers to choose the best and most effective store that meets their needs. The internal production by Zara is unique and is based on consumer preference. Additionally, the company has transaction-based benefits from a central factory that produces most of the products (Kroenke, 2012, 51). The structure of the company is structured in a way that appeals to consumers through backward and forward integration. The brand is popular among its customers for its fast and cost-effective reputation. For instance, it has enabled women in the European market to acquire a great perception of Zara brand.
All of the benefits as stated by Dunning and Barney are met. This is attributed to the company’s rigid O-specific, it has globalized as a leader (Ferdows, Lewis, & Machuca, 2003, 65). The role played by the consumers and management by Zara allows the company to offer resource-based success that are hard to acquire. The high-control method of globalization makes it possible for Zara to safeguard its resources.
- Psychic distance
The past of Zara could be termed to as a classic psychic distance model. The company came into the global market in 1988 and six years later they shifted to a number of markets more so France and Mexico (Brookes, and Smith, 2007, 3). This theory offers a good base for this. France is a neighbor, with connected linguistic, they are catholic and their culture is southern-European. The theory states that Zara would localize itself in the country then go global in France then other nations. In Mexico, Zara had a culture with similar language and religion while the consumers looked for better ways to acquire fashions of developing nations.
Zara’s movement from localized marketing of tis cloth lines to global markets was gradual but short period. In the 1990’s the company had opened store in other markets like Greece and Sweden. The consumers were receptive and it grew to other European nations and America (Brookes, and Smith, 2007, 10). Zara’s strategy connects the psychic model and paradox model. Studies show that as companies acquire knowledge in the global markets, growth will shift to distant markets but gradually. Zara on the other hand has been in a position to quicken the process and acquired the US and South Korea markets. The main aspect to this being consumer information acquired and sharing model applied at the store level in all of the countries.
Conclusions and Implication
This paper is based on theories of globalization and the issues arising from global retailers and consumers. Zara’s techniques of globalization attributes have been shown in a dynamic manner. With regard to this, a number of conclusions can be acquired from the globalization theories. Zara is a special company in that it is dedicated to foreign expansion from an early process as it grew. Hence it applied its globalization strategy in a dynamic manner like born-global and not gradual global company. According to studies, resources that uphold global competitiveness is vital to a company’s global performance. Hence, Zara’s application of knowledge sharing, quality products and market expertise in foreign markets accords support to this studies. When applied it is noted that the strategic aspect applied by born-global fashion to appeal to the consumer has grown and acquired success.
It is common that from knowledge sharing theories, companies are able to acquire major competitive benefits. Zara applies all of the knowledge sharing and acquires effectiveness from it. Its growth in the global scale has made communication with consumers a vital aspect for the company. Hence, the globalization choices that arise are based on communication techniques. On the other hand, high risk and reward is the most effective for Zara’s globalization as it is special resource-based benefits. From this the company was able to use and uphold a retail strategy. Its abilities to design fast, manufacture and transport were vital in maintaining extreme control in globalization.
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