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Appendix 1 Zara Competitive Positioning According To Five Forces Analysis
Appendix 1 Zara Competitive Positioning According To Five Forces Analysis
Appendix 1 Zara Competitive Positioning According To Five Forces Analysis
Threat of Subsitute Products (high) - local intense competition - the Gap and H&M had become the two largest specialist apparel retailers in the world ahead of Inditex
Threat of new Entrants (high) - labor intensive products-easy to make for new entrants - key cross-border links: retailers, branded marketers, branded manufacturers
Bargaining Power of Suppliers (medium) - competitive manufaturer - designs and future fashion - "managed trade" - MFA - suppliers has less control than downstream intermediaries Competitive Rivalry Within Industry (high) - apparel industry was very fragmented, locally owned, dispersed, and often tiered production - competitive market
Bargaining Power of Customers (high) - local intense competition - globalization and new technology change consumer behavior (focus on price, quality, fashion forward)
Appendix 2 Zara Core Competencies According to Barneys VRIN Framework Resources Amancio Ortega Gaona and CEO Castellano Vertical integration Quick response Creative teams with a sense of latent demand JIT manufacturing system Efficient centralized logistics model Attractive large strategic refurbished stores Organizational structure The positive word of mouth Branding to create a climate of scarcity and opportunity Minimum spending on advertising Visual merchandising in stores Financial goals (high margins, low cost) Pricing strategy Positioning strategy Human resource development Low employee per store (Exhibit 6) Cleverly-selected markets (fits Zara positioning) Inclination to technology Corporate culture Low failure rate on new offerings Valuable Rare Inimitability Non substitutable Yes Yes Yes Yes Yes Yes Yes No Yes Yes Yes No Yes Yes Yes Yes Yes Yes No Yes Yes No Yes Yes Yes No Yes Yes No Yes Yes Yes No Yes Yes Yes No Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes No No No No No No No No No No No
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Support Activities
Ma
Service
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Primary Activities
Inbound logistics - Creative teams with a sense of latent demand for new products maintain frequent interactions with the creative team La Coruna - Good relationship with internal and external suppliers - Low failure rate on new products
Operations - Insource fashionable items (40 percent of total products) efficiently using JIT manufacturi ng system - Outsource basic items (60 percent of total products)
Primary activities Outbound logistics - Centralized logistics model - Efficient distribution by shipping directly to the store twice a week, keeping inventories low and eliminating the need for warehouses. - Clothes stay at distribution center less than 3 days.
Marketing and sales Attractive large strategic stores Minimum spending on media advertising in lieu of the positive word of mouth Branding through frequently refurbished stores Scarcity climate and freshness
Service - Social strategy (the Global Compact) - Markdown items - Prime locations
Support activities
- Good relationship with internal and external suppliers - JIT manufacturing system - Advanced telecommunications system to connect headquarters and supply, production, and sales locations. - Development of logistical, retail, financial, merchandising, and other information systems - Human resource development low store manager turnover. - Onsite and off-site training for employees. - Organizational structure - In-house production, vertically integrated, quick response, and efficient operationally (net margin 10%)
Chairman
Business Strategy - Future business direction of each Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, and Oysho Business Units
Store Managers