The paper "Critical Evaluation of the Strategic Viability of Zara" is a perfect example of a business case study. Zara is a business that has achieved substantial revenue growth between 2000 and 2012. This growth has been achieved by expanding the business internationally at a very rapid pace, by having a competitive advantage of a two week lead time for fast fashion merchandise, and by controlling costs throughout the entire value chain. Zara owns most of its production and logistics/warehousing centres, giving its considerable ability to exert market bargaining power and control operational costs.
Growth has also been achieved through diversification, such as Zara Home, a home decor business branded under the Zara name that offers unique household merchandise to new and existing consumer segments loyal to Zara. Zara has established strong brand recognition in international markets and considerable loyalty for offering limited quantities of fashion merchandise (clothing and accessories for exclusivity) and for quality. Diversification is the firm’ s most appropriate, prescriptive strategic plan which illustrates ample planning and development for long-term competitive advantages. Based on the firm’ s responses, both negative and positive, to external challenges, it is recommended that Zara consider using public relations strategy to promote its corporate social responsibility.
As this strategy enhances brand reputation and Zara is adept in philanthropic activities and other socially responsible actions, using promotional communications to educate the ethical consumer about Zara’ s CSR focus will give the firm greater long-term competitive advantage and a unique differentiation identity in existing and new international markets. A critical evaluation of the strategic viability of Zara1. Analysis of key changes in a strategic positionZara, with a growth rate of 37 percent, exceeded the growth rate of many companies in similar retail industries.
With the growth in revenue, global brand recognition, and better internal resources (e. g. human capital and economic capital), the company achieved growth through a horizontal diversification strategy. For Zara, there was no guarantee that the firm would continue to achieve growth solely through fashion retailing, especially with consistently-changing consumer behaviour patterns and global economic conditions.
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