The paper 'Zara Chic and Fast Fashion - Strategic Issues" is a perfect example of a business case study. Zara Company is a global cloth fashion designer with a mission of providing trendy and affordable wears for all society members’ men, women and children alike. The company operates in the vastly dynamic fashion industry. Currently, as evidenced by the increased rate of growth and increasing profits, the industry is currently at its growth stage yet to achieve maturity making it extremely attractive for existing and new entrants. Over the years, Zara Company has evolved and developed its niche in the competitive global world.
In this regard, the company adopted a range of strategic measures to proactively anticipate market preference needs and subsequently mitigate against them. As such, the company developed and established a wide range of outlets and retail stores to allow for increased accessibility by its customer base. Further, the organization sought to establish its unique selling point in the market. As such, it adopted a technology-dependent design process, a step none of its competitors had taken. Thus, the company adopted its slogan that for it to enhance success, it relied not on the development of a new product, but on the development of a new production process.
Consequently, through this approach, Zara Company established a unique production process that earned it an increased customer base. Consequently, the organization’ s performance has been on the rise. In this case, an analysis of the organizations 2011 financial statements revealed an increased profitability margin by 12% as well as a sales increase of 10%. These improvements were in contrast to its market competitors such as H& M and the Gap who in turn registered sales changes of 1% and -1%, in addition to reducing profitability margins.
Further, Inditex expanded its store's outlets by opening an additional 483 stores. Thus based on this background analysis, it is evident that Zara Company is a globally competitive company with increased influence in the clothing fashion industry. In order to succeed in the fashion industry, technology flexibility and sustainable production systems form part of the critical success factors that need be realized. As such, this essay reviews the Company case study revealing its major strategic issue as well as offering an external industry analysis to establish its achievement of the identified key success factors. Strategic Issue As evidenced in its background analysis, Zara Company has over the years evolved into a globally competitive enterprise.
In this case, the company has resulted in increased use of global fitting strategies and strategic approach. Among such strategies, including the adoption of an efficient global oriented management approach with respect to the management of its human resource, supply chain as well as other internal functions such as global marketing.
The global market is highly competitive with increase suppliers and a relatively stable market population. As such, increased supply base translates into a reduced market, thus necessitating the development of competitive market approaches. In this regard, Zara Company, even after its adoption of a cost leadership strategy, that had significantly increased its market competitiveness and performance, requires management structure change to enhance increased performance. The company future competitiveness is apparent.
ReferenceMatherly, L., (2012). Zara: Chic and Fast Fashion. Abu Dhabi, UAE: Zayed University.