Zara Et Ses Concurrants

Content

1. Introduction 3

2. Zara: an atypical strategy 4

2.1 Creation 4

2.2 A local and integrated production 5

2.3 The quality of the articles and the reasonable prices 5

2.4 A strong vertical integration 6

2.5 Time, a key success factor 7

2.6 The distribution 8

2.7 Marketing 9

2.8 Powerful system of information 9

2.9 Conclusion 10

3. H&M: the Swedish success 11

3.1 Presentation of the company 11

3.2 H&M in the world: a local policy in answer to the globalization 12

3.3 H&M product throughout the world 12

3.4 Communication: local and global strategy at the same time 13

3.5 Sale on-line 15

3.6 Diversification of the activities: COS Store + H&M Home 15

3.7 Production strategy 16

3.8 Distribution channel 17

3.9 Conclusion 18

Executive Summary

1. Introduction

The Zara Company is a subsidiary group Inditex and it accounts for 75% of its activity. At the origin of this Spanish invasion on all the facets mode of the sphere, a man: Amancio Ortega. This Spanish, born in Castillo, did not suspect that its destiny would be with the image of famous Rockefeller. Resulting from a modest milieu, Amancio must at 14 years give up the school in order to earn a living. This early confrontation with economic realities goes booster rocket the boy and to give him the force to put its ideas into practice: it designs with friends a model of Shetland sweater. What could have remained dead letter is such a success that with the benefit of the sales Amancio Ortega opens his first Zara shop in 1975. Today, one count more than 990 Zara ensigns throughout the world and the mark is present in 63 countries.

The Inditex group, composed by Zara, Pull and Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home and Kiddy' S Class. It counts 3113 stores all over the world and is present in 64 countries. It employs approximately 60,000 people. In 2005, its turnover was evaluated to 6.7 billion euros, that is to say a rise of 21% compared to the former year, and its bottom line was of 803 million euros. The philosophy of the group is the following one: “creativity and quality design together with has rapid answer to market demands”.

The concept is to democratize clothing of luxury in order to create models which will be sold half less expensive than the originals. Its talent holds in the extremely perspicacious observation of the tendencies to follow, which inevitably generates products in perfect adequacy with the desires of the customers. It transforms musts cuts large designers’ houses in accessible parts for all the budgets.

Its idea was certainly revolutionary, but being given the wild current conjuncture of competition which prevails in the textile medium, the rise of Zara holds of the fairy tale… A fairy tale directed to the millimetre near thanks to an innovating and intrepid sales strategy, which made of Amancio Ortega the first fortune of Spain. In charge of the Inditex group, it created a true textile empire whose floret is Zara. 

2. Zara: an atypical strategy

Since the beginning of its creation, Zara remained faithful to the starting idea to make the luxury accessible. Thus, it to extent succeeded in democratizing the luxury by manufacturing products in series strongly indexed on the evolution of the mode. Thanks to this policy, Zara is today an industry able to offer products tendencies at moderate prices. The goal is that the customer who penetrates in the stores is lucky more to come out from it with a purchase. In addition it is a company which wants to be near to the young people. Also, this desire feels on the level of its policy of recruitment. Zara has young employees with styles very marked by the fashion.

All the functions of Zara are centralized in Corona (stylish, marketing, communication), which allows the control of the costs and a great reactivity. The competitive advantage of the company rests on three pillars: the quality of the articles, the reasonable prices and the time very court of reaction.

2.1 Creation

The degree of creation of the firm is rather weak, since the models of high fashion are copied: 40 researchers of tendency attend the fashion shows of the whole world and retain the ideas of creations to adapt them. Thus, that allows a fast creation of new articles for the 200 designers: approximately 11000 are proposed a year whereas the competitors present only approximately 3000 of them. The Spanish firm proposes 12 collections a year, which is enormous in this sector. The communication is minimal at Zara since it accounts for approximately 0.35% of its sales turnover, contrary to other companies of the textile which devote to it 3 to 4% on average. That is explained by the absence of publicity campaign and the regrouping of the service communication in Corona. The sites of the group are only in English or Spanish and, one cannot buy by Internet what reduces the cost of management of the sites. Its philosophy is thus: “No marketing”, “No communication”.

2.2 A local and integrated production

Contrary to H&M, its principal competitor, Zara have 65% of its factories in Spain. The major part of the strategic points of the creation of a product is managed in a geographical space restricted, which makes it possible to have a total glance on the production and to be able to act above directly. The delocalization makes certainly it possible to obtain lower costs, but also lengthens the delivery periods from 2 to 3 months, which is unacceptable for Zara.

Spanish wants to make the difference thanks to his capacity of extremely short reaction: unforeseen climatic,

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