Vladimíra Olívia Gáborová
Phd. Emre Demirci
Manufacturing and clothing business has a long tradition and it is well established. People always feel need to protect themselves against the wind, cold, sun etc…. In the past there was not a high demand for clothes, since it was much as a cottage industry. Everything starts to change by industrial revolution, when development in technology opened the door and shows many other possibilities. Manufacturing became an increasingly industrialized process. Because the material does not have a fixed and controllable shape, this industry remained a labor-intensive process. Because the demand was satisfied, the role of design became much more important than just covering and protecting our bodies. Nowadays, manufacturing became a global industry fuelled by a huge demand for differentiation and personalization. In this industry matters much more than just price; variety, speed, brand and quality has a big influence on success.
As in every business, there are companies which underline the power of innovation and entrepreneurship. One of these companies is Inditex, which was established by Amancio Ortega Gaona in 1963. The company has 8 brand groups. One of these is ZARA, well known brand in many countries all around the world.
To start with a PEST analysis, we need to mention that company is established in Spain, the country with political stability. The Spain is also a member of European Union, where the boarders of the countries are becoming thinner and there are less and less regulations for trading... Another advantage for the company is usage of Euro, because of no exchange rate, stabile currency and low inflation. For the society the fashion became part of lifestyle. Design is much more important that before, and it is essential for success in clothing industry. The Zara has built strong reputation and became well-known over past years, by offering clothes with newest design, good quality and affordable prices. Also fashion became a lifestyle factor, where elegance and quality matters. The well dresses people are respected more as people, who do not really care what they are wearing. Since ZARA is offering classic and Italianate look, with current trends, many customers around the world became a loyal after finding themselves in their design. ZARA built a strong brand name and start to play an important role in clothing business. ZARA offers a variety of designs from leisure to causal and work clothes. They also have lines as ZARA Women, ZARA Men and ZARA Kids and the last and newest one ZARA Home, so basically the whole family will find pieces for themselves for any occasion. Accessibility of ZARA is almost unlimited. ZARA has had opened store in almost every important bigger city, in every big shopping mall and even more stores in one city that just one. They are known in 70 countries all around the world and the places where they did not open any store they offer services of their online store. ZARA has a competitive advantage, because they are able to exchange the collections in less than month, in contrast with H&M to whom it takes more than 3 months. Their innovative system, where newly approved designs are cut and then distributed to small workshops allowed them to work fast and flexible. Communication and passing information are fast day by day, and ZARA can quickly analyze what is trendy, and what is not. Strengths of the ZARA are: well established distribution channels, strong brand, favorable reputation, newest trends and affordable cost for middle class, fast changing collections, well established communication channels, strong position on the market, innovative thinking, many of designers. Weaknesses of ZARA include lack of patent protection, ability to be agile in design manufacture, competitors, loosing quality and reputation. Opportunities...