Name: Karen Diane C.

Rivera
Course: MBA-204 Advance Marketing Management

CASE STUDY 2.1 Zalando: how can the online apparel retailer turn financial losses into positive
profits

Questions :
1. Compare and evaluate Zalando’s and Asos’ key competitive advantages and
strategies in the world online apparel market.

According to the current scenario, Zalando's main competitive advantage is that the
company operates in over 14 countries. In the case of Asos, however, it has been shown that
it operates in nine counties. In addition, Zalando is boosting its market share by operating in a
broad number of countries in order to conveniently and efficiently target a huge number of
client segments. Zalando has the competitive advantage of the loyal customer and provides
the high satisfaction to the customer Zalando also utilizes the use of offline marketing to
promote their items, which has proven to be very effective. However, Asos' advertising is
exclusively centered on online marketing, and only those who have access to the internet may
view it. As a result, the use of offline advertisement gives Zalando a competitive advantage
because it allows those who do not use the internet to learn about the company. As a result,
offline marketing can be stated to generate strong market consciousness, but Asos has a
lesser brand awareness in the market.
When it comes to approaches in the world online apparel market, Zalando offers a
fantastic service as well as bonus campaigns; its technology includes an innovative platform;
and it operates in a wide variety of products that meet the needs and longings of a wide range
of clients. In comparison to Asos' goal, is to sell low-cost counterfeits of celebrity fashion. As
a result, they don't have a large number of consumers; instead Asos has maintained a loyal
customer base which is essential in the business world.

2. How would you explain and evaluate the value creation and value capture of
Zalando?

Value Creation:

Zalando has indulged its customer base with fancy store magazines, which are
hardly distinguishable from conventional fashion journals yet are distributed on a
complimentary basis. The lead publication, Zalando Magazine, has since reached
a circulation of 1.5 million copies and is distributed in Germany, Austria,
Switzerland, France and Holland. Needless to say, its content is also published as
both e-magazine and smartphone app, along with numerous animations. Zalando
exploits the potential a cross-media format has to offer. Zalando’s greatest
strengths is its ability to implement AI advancements into unparalleled customer
experiences. Their site includes 3D fitting rooms to help buyers examine their
potential purchases for fit. And if an extra opinion is needed, Zalando’s algorithms
provide custom outfit suggestions for each visitor. They went over and beyond by
including useful website tags that identify which products are made using
environmentally friendly materials. Appeasing consumers' requests directly
 increases Zalando's perceived value, brand loyalty, and, ultimately, sales potential.
Aside from cutting-edge initiatives like personalisation and sustainability, Zalando
employs a variety of well-thought-out sales strategies.

Value Capture:

Zalando created exclusive brand offerings, the fact that they have an exclusive brand
on their website commands a higher price for their good. In addition, according to the case
study, Zalando supplied not only products from well-known brands, but also own-label
products, allowing the company to offer things that are only available via them. Also B. The
business also offered a wide range of products, allowing them to cross-sell and up-sell,
resulting in higher sales per customer.

3. Discuss and evaluate the criteria that you would you use for Zalando’s selection of
new markets outside its current 14 countries. End up with a ranking list of the three
most attractive countries.
As of present time Zalando operates in 15 European countries, but it has the potential
to keep growing itself around the world. Some criteria to decide in which new markets is better
to enter are the commit, identify entry points, define market entry strategy,
preparing an assemble plan, research, testing... Also, to look the percentage of apparel sales
through internet retailing could be useful criteria when making a decision, as you can observe
the portion of possible consumers inside each population. It would be easier to enter into a
market where online shopping it is popular. The countries where there is a high percentage of
apparel sales through internet retailing are: Taiwan, UK, Germany, South Korea, Denmark,
France and Japan. In some of the mentioned countries Zalando is already present, so the
most 3 attractive and easier countries to enter would be: Japan, Taiwan and South Korea

4. Discuss and evaluate the pros and cons for Anders Holch Andersen Povlsen and
Bestseller, regarding the investments in Zalando and Asos

Pros:

a. Because all three of these companies (Bestseller, ASOS, and Zalando) are fashion
retailers, their collective industry experience will be extremely valuable should the group
expand into new countries or present markets become unstable.

b. Zalando and ASOS are two of Europe's largest online fashion shops. ASOS has the
largest market share in the United Kingdom, which is one of the world's top e-commerce
spending countries, while Zalando is one of Europe's leading online fashion retailers. As
a result, they are relatively safe investments in comparison to other companies on the
market, with a high potential ROI.

c. Zalando and Asos could readily penetrate the retail markets in the Asia-Pacific region
through Bestseller, which is said to be the eight-biggest retailer in the Asia-Pacific region

Cons

a. Since its beginning, Zalando has prioritized development over profit, and as a result, the
company has yet to turn a profit. Even if Zalando's brand awareness in Germany is high
 this is a very dangerous business model, and only time will tell how long it can be
sustained. Sustainability will be the primary challenge they need face.

b. Investing in two of Europe's most competitive online commerce companies could backfire
for Anders'. In many markets, ASOS and Zalando compete directly, and there is a risk of
cannibalism, in which one firm takes the market share of the other.

c. Zalando is only heavily invested in its Europe market hence they is not much of a
diversity in its market.