Swot Analysis: A case study of Zara
The aim of this study is to acknowledge the internal strengths and weaknesses as well as the external opportunities and threat of Zara. Zara is a Spanish fashion retailer operating across the globe and it is successful in delivering high fashionable apparel and accessories as per the customer’s needs and market trend (Zara.com., 2018).
The major strength of the company is strong online presence through their website and other e-commerce platform. It is the major strength through which it provides quality clothing and accessories to the customers according to the market requirements and latest fashion trend (Hall et al., 2008). The online presence is the success of the company which only can be possible through managing strong supply chain and distribution network where the organisation Zara is able to distribute their quality clothing and fashionable products safely to the customers. Supply chain management provides a scope to Zara to improve their presence in online activities and strengthen their customer’s base. In today’s world, there is huge numbers of population who prefer online purchase without wasting their precious time and the online presence of Zara therefore provides a scope to the company to attract more audiences in the fashion market and strengthen their customer’s base (Rodrigo, 2016).
The main weakness of the company is limited marketing tactics and lack of advertisement as compared to other completive retail firms such as Gucci, Burberry, Louis Vuitton and Ralph Lauren. It is the main weakness for which the company cannot attract the new customers in the market. As mentioned by Boddy (2014), it is easy for the company to retain the old consumers, but it is difficult for them to attract the new consumers due to lack of promotional activities.
Market expansion is the main opportunity for Zara where the brand can expand their business across the international places through market segmentation and product differentiation. The company can improve the variation in serving the customers in better way. In this regard, the company can segment the market target the potential buyers where the chances of buying the products is high among the customers. This is also beneficial for the organisation to maximise the profitability and sales volume of the company and secure future sustainable growth (Lopez and Fan, 2009).
The threat of high competition is one of the major risks for the business of Zara due to the presence of other competitive fashion brands in the market as well as other substitute products. For the competition, the other competitive firms try to provide the clothing and accessories product to the customers at affordable price and there exist a risk of switching the brand perception of the customers. There are many fashion brands operating in the market such as Burberry, Harmes International, Gucci, Hugo Boss, Prada, Chanel, Louis Vuitton and Ralph Lauren (Wright, 2011).
Zara can utilise their online platform for utilising the opportunity of market expansion which further provides a scope to secure future sustainable development by ensuring high brand value and customer’s loyalty.
- Boddy, D. (2014). Management: An Introduction (6th edition) Harlow: Pearson Eductaion Hall, D., Jones, R., Raffo, C., and Anderton, A., (2008). Business Studies (4th ed). Essex: Pearson education
- Lopez, C. and Fan, Y. (2009) “Internationalisation of the Spanish fashion brand Zara”, Journal of Fashion Marketing and Management, 13(2), pp.279 – 296.
- Rodrigo. (2016). Strategic Analysis of Zara. [Online] Available at: https://writepass.com/journal/2016/10/strategic-analysis-of-zara/ [Accessed on 5 April 2018]. Wright, T. (2011). Zara.com SWOT Analysis. [Online] Available at: https://wrightunt.files.wordpress.com/2011/12/swotanalysis-wrighttonaya1.pdf [Accessed on 5 April 2018].
- Zara.com. (2018). ZARA United Kingdom | New Collection. [Online] Available at: https://www.zara.com/uk/ [Accessed on 5 April 2018].