Strategy Dissertation

LIFE of the ORADEA UNIVERSITY. Fascicle of Administration and Scientific Engineering, Volume level VI (XVI), 2007

STRATEGY AND LASTING COMPETITIVE ADVANTAGETHE CASE OF ZARA FASHION CHAIN Sunhilde CUC, Simona TRIPA University of Oradea, Faculty of Textiles and Leatherworks, e-mail: [email protected] ro, [email protected] com, Keywords: Organization Strategy, Competitive Advantage, Functional Effectiveness, Proper Positioning

Abstract. In this case examine we want to analyse this happening called Zara, a strategic device of the Inditex Group, and evaluate the tricks of Zara around the European fashion market. Finally within the apparel market, that shows the competitive advantage gained through modern systems by contrasting Zara to its opposing team.

1 . ORGANIZATION PROFILE Companies strive for environmentally friendly competitive benefits, financial functionality that regularly outperforms their very own industry peers. The world is very dynamic, with new products and new rivals rising seemingly overnight, that truly lasting advantage may appear like an impracticality. But you will find winners and the Zara sequence is one of these. The Zara fashion chain, founded in 1975 in Arteixo, a tiny town in the north of Spain, is perhaps the planet's most powerful clothing sequence. Zara offers helped its parent, the Spanish firm Inditex, increase from obscurity in the middle 90s towards the world's third largest pure-play fashion dealer after the Swedish H& M and US-based Gap Incorporation. with economic performance very well ahead of these rivals. The Inditex Group is present in 64 market segments in The european countries, the Americas, the Middle East, Asia and Africa, with upwards of 3, 100 shops [8]. In addition to Zara Inditex has another seven business formats: Skhuaban, Pull and Bear, Vertice Dutti, Bershka, Stradivarius, Oysho and Zara Home. The Group also includes more than a 100 companies associated with different activities in the business of textile and fashion design, manufacture and circulation. Inditex has grown dramatically recently, achieving a consolidated proceeds in 2005 of almost eight, 196 , 000, 000 euro, using a net profit of 1, 002 million european. It has reported a 25% rise in income for 06\ on solid growth in the Zara chain -that is the reason two-thirds of Inditex's total sales. Income for 12 months to thirty-one January 3 years ago was EUR1. 0bn, in sales that rose 22% to EUR8. 2bn [2]. About 31 January 2007 the Group got 60. 240 employees. The Table1 reveals the Group's most significant statistics in 2005 and 2006: Table 1 ) Financial data from Inditex

* The Inditex financial year is definitely from very first February to 31 January of the pursuing year Source: Inditex Corporate and business Reports 2006, 2006 2521

Fiscal Year* Turnover (in millions of euro) Net profit No . of stores Number of countries Foreign sales Workers

2006 eight. 196 1 ) 002 3. 131 64 60, 4% 69. 240

2005 6. 741 803 2 . 692 62 57% 58. one hundred ninety

2006/2005 22% 25% 439 2 10. 050

ANNALS of the ORADEA UNIVERSITY. Fascicle of Management and Technical Engineering, Volume level VI (XVI), 2007 Table2 shows the Zara's greatest figures in 2005 and 2006

ZARA Turnover (in millions of euro) No . of stores Worldwide sales % of Inditex Source: Inditex Corporate Studies 2005, 2006

2006 your five. 352 990 72, 3% 65, 3%

2005 some. 480, eight 852 sixty-eight, 9% 65, 9%

With 1021 retailers, at 13. 04. 3 years ago, in fifty-five countries, Zara appears to possess found the formula for success: Give the public what it would like, at the most reasonable price, inside the shortest period possible [7]. To be able to think about how the firms obtain sustainable edge, it's helpful to start with two concepts identified by Eileen Porter: detailed effectiveness and strategic placement. 2 . FUNCTIONAL EFFECTIVENESS Relating to Porter, the reason a lot of firms undergo aggressive, perimeter eroding competition, is because they have already defined themselves according to operational success rather than proper positioning. Functional effectiveness identifies performing similar tasks greater than rivals carry out them. Everyone wants to be better, but the...

Referrals: [1] [2] [3] Cuc, S, Kanya H. - " 7S Modell- Case Study Dell”, Cluj Napoca, March 2006 KPMG 2003. Styles im Geschaftsverkehr 2005. Das Ausblick für die Branchen Food, Trend & Footwear, http://www.kpmg.de/library/pdf/030411_Trends_im_Handel_2005_de.pdf (accessed on 12th April 15, 2007). Hay Andrew- " INTERVIEW-Zara Owner Inditex Says Cost Fight Not Over”, Fri Marly 30, 3 years ago, Reuters, http://investing.reuters.co.uk/news/articleinvesting.aspx?type=consumerProducts&storyID=2007-0330T170604Z_01_L30316048_RTRIDST_0_SP_PAGE_016-L30316048OISCP.XML&pageNumber=2&imageid=&cap=&sz=13&WTModLoc=InvArt-C1-ArticlePage2, (accessed on 12th Apr, 2007) Mazaira Andrés, Electronic. González, Ruth Avendaño- The role of market orientation on organization performance throughout the development of sustainable competitive benefits: the Inditex-Zara case, Advertising Intelligence & Planning, Jul 2003 Quantity: 21 Concern: 4 Pp: 220 – 229. Assurer, M. Competitive Advantage: Creating and Sustaining Superior Performance, The Free Press, New York, NY, 1985 Steilmann, E. 1998. Beschleunigung – eine Modeerscheinung? In K. Backhaus & L. Bonus (Eds. ) Die Beschleunigungsfalle oder der Succeed der Schildkröte: 133-147. Stuttgart: Schäffer-Poeschel. *** Stores around the globe, http://www.inditex.com/en/press/information/stores, (accessed on 14 April, 2007) ***Zara starts its 1st store in Beijing, 02. 02. 3 years ago, http://www.inditex.com/en/press/press_releases/extend/00000545 (accessed on sixteenth April, 2007)

[4] [5] [6] [7] [8]

2524



News

 External and Internal Conditions Business Essay

External and Internal Conditions Business Essay

External and Internal Conditions By Dorothy Bruce Professor Ira Poladeen Business Capstone Apr 28, 2015 A great organization's environment includes factors…...

 importance of time Essay

importance of time Essay

Time is precious. It is invaluable. It is one of the highly effective factors. Our life is scored in terms of period. We grow in time, stay in…...

 Guns Are a Danger to Society Essay

Guns Are a Danger to Society Essay

Firearms are a Threat to Contemporary society Just imagine being placed in a movie theatre around night time and instantly some upset man will come in and starts…...

 Evaluate the Strengths and Weaknesses of the Concept of the Product Lifecycle. Choose Several Case Research Familiar to you personally. How Does the...

Evaluate the Strengths and Weaknesses of the Concept of the Product Lifecycle. Choose Several Case Research Familiar to you personally. How Does the...

Title: Assess the strengths and weaknesses of the concept of the product lifecycle. Choose some circumstance studies familiar to you. How does the theory in the product lifecycle drive online…...

 Sample Essay

Sample Essay

Topic: Relationship between Teachers' qualification and Students' educational performance in Senior Large Schools in Lagos Point out, Nigeria. Exploration Question: Carry out teachers' certification affect the educational performance of…...

 Shakespeare Creates About Problems that Are Still Relevant Today Article

Shakespeare Creates About Problems that Are Still Relevant Today Article

Shakespeare creates about problems that are still relevant today William shakespeare writes regarding issues that continue to be relevant today because his themes happen to be universal, his…...