Introduction
Strategic management is all about advancing the companies to enter in a new region and flourish their earnings (Barksdale & Lund, 2001). Strategic management is a field that directly impacts or leads to organizational productivity, as it will analyze the facts that how the organizations can attain effectiveness and earn economic prosperity accordingly. There are numerous companies in the world which are now experiencing numerous problems accordingly, and they are required to analyze these aspects accordingly. In this assignment it is also required to have the same analysis on a chosen company (Barksdale & Lund, 2006). The company is trying to enter in region of the United Kingdom (UK), with their effective brands and products. It is required to analyze the entrance of Zara in the UK from two different angles, which are SWOT analysis, and then the 7Ps of marketing, which are essential for the long run productivity and efficacy for an organization in particular.
Analysis and Findings
About ZARA
Zara is a Spanish based clothing and accessories retailer based in Galicia, Spanish. The retailer was founded in the year 1975 by Amancio Ortego and Rosalia Mera. Zara is known asteh flagship chain store of the inditex group, which is the largest retailer of the world. This particular fashion group also owns the brands such as Pull and Bear and Bershka.
Zara is an economically sound company with a marvelous trend towards the fashion and effectiveness. As per the claim of the company and its competitors, it requires only weeks to Zara to develop a new product and then launch it in the market. Zara has resisted this industry to bring wide range of products towards transferring fast and effective fashion to continue. Most of the products of the company are Clothing, and the company is in the favor to deliver the effectiveness for their future effectiveness and consequences. From the annual report of earnings of Zara, it is found that the company earned net revenue amounting to €7.071 billion in the financial year 2009, and from that year the company is continuously increasing the financial belongings and strategic well beings of the companies accordingly (Kerzner, 2015).
As per the requirement of this assignment, Zara is trying to enhance its corporate image in the market of the United Kingdom (UK) accordingly, and it is a great chance for them to deliver the best things in the town accordingly and effectively at the same time.
SWOT Analysis of ZARA
SWOT analysis is one of the most important and widely used tools that come under the ambit and umbrella of Strategic Management, as it specifically used for analyzing the strategic behavior of the companies accordingly (Barksdale & Lund, 2006). Strategic behavior is essential for an organization because these are some pre-requisite to enhance the decision making ability and compatibility of an organization. The entire framework of SWOT analysis is found effective on the basis of four different elements known as Strengths, Weaknesses, Opportunities and Threats. The main theme of these four elements is to analyze the capability and effectiveness of the company in terms of utilizing its resources for the decision making aspects (Kerzner, 2013).
Strengths of ZARA
- One of the basic strengths of the company is its large amount of physical presence, as the company has around 74 stores in different parts of the world
- Zara is the part of one of the largest retailers of the world, in fact the largest retailers of Spain
- Zara has a renowned and establish brand name in all over the world, and the company is doing a great job as far as satisfying the needs of their consumers
- The supply chain management of Zara comprises on low cost and high effectiveness
- All of the operations and departments of Zara are well manufactured and integrated with each other, which is an effective sign from their own standpoint
- Zara is one of those retailers who use Just in Time (JIT) process and value management techniques to process all of their inventories and operations in an effective and organized manner (Kerzner, 2013)
- Clothes at Zara are produced in lower cost with perfect and innovative aspects which is one of the major aspects for them
- The trend of Zara is highly effective and mobilizes with an effective and well manufactured design with fast delivery of products accordingly
- The customer base of Zara is very high, and the company is in the favor of delivering the best result to their customers accordingly with a positive node which is an effective sign for them
Weaknesses of Zara
- The advertisement strategy of Zara is very weak, and the company is still operating with their usually strategy of not advertise their products in the markets
- Target market of the company is not well structured and defined, which is showing that the power of customer loyalty is very weak, and the customers now have the chance to divert their intentions to not to attain effectiveness with the current authority and strategy of the company accordingly (Matthews, 2007)
- The company doesn’t have any disaster plan for their ineffectiveness with not having any Exit Strategy that will be ineffective for them in the near future, especially at the time of economic crisis
Opportunities of Zara
- The stance of globalization is increasing heavily, and creating lots of new opportunities for different players of the markets. Zara in this particular context also have number of global markets in which they can enhance their operations for their productivity and effectiveness
- Zara also have the chance to explore their earnings and effectiveness by entering in the segment and expand all of those areas which they have not approached yet, which will become an integral sign for their productivity and effectiveness
- Online marketing and E-retailing are gaining importance in different parts of the world, which are increasing the retailing business of the retailers like Zara
Threats for Zara
- High end fashion merchandisers are increasing heavily for Zara, and creating problems for the companies in particular.
- The market of the United Kingdom, in which the company is strategizing to enter, is a huge market, which already captured with lots of domestic and international brands that may increase the level of competition for them in the future, and will decrease their earnings.
Recommendations
Striving for the economic prosperity and strengthening the function is the most important aspect from the viewpoint of an organization, and no organization can sustain effectiveness without having these two pin points’ behaviors (Matthews, 1980). Every new and existing company when try to establish or enhancing their network, they will analyze different aspects accordingly, as analyze in the analytical provision of Zara. From the SWOT analysis of Zara, it is found that the level of strengths and opportunities are extremely high for Zara which are increasing the internal and external capabilities of the company to grow tremendously well in the market of the UK (Mintzberg, 1989). The company has to pay more attention to its current pricing and promotional strategy because there are numerous competitors are already captured the market of the UK in terms of retailing, and may be a fear for Zara in the future. In this way, the company can have effectiveness, if they will analyze their pricing strategy and place it accordingly. It is recommended to Zara that they have a bright chance to get effectiveness in the markets of the United Kingdom (UK), and the company hast to select the same place for their expansion.
The Implementation of 7Ps of Marketing
Strategic management is made up with two different standpoints known as strategic and management, and they are delivering best result for the companies (Mintzberg, 1994). 7Ps of marketing is also known as Marketing Mix, as it is a mixture of different corporate strategies for the companies. Usually new companies would use this particular matrix for their productivity, and it is also used by the existing companies which are wishing to enter in a new region and market, as likely by Zara which is trying to enter in the region of the UK. The 7Ps of marketing can be analyzed with the help of below mentioned picture, and it will be applied on the productivity of Zara (Mintzberg & Quinn, 1991)
All of these 7Ps are essential for the organizations to attain the effectiveness in the long run of the companies
Product
Products are extremely important and essential for the sake of an organization, and it is equally applied over each and every company. If the products of the company are highly effective and mobilize, then it will create effective difference in the productivity and level of efficacy (Simerson, 2011). The products of Zara are perfect in terms of quality and effectiveness, and it will be more than perfect while entering in the region of the UK, as the people of the UK are more trendy and fashionable as compared to Spanish people, and they always required quality products, and Zara has the chance to accomplish the same aspect
Pricing
Apart from product, pricing is an important aspect that associated with an organization, and the effectiveness of the same can be found accordingly(Simerson & McCormick, 2003). Pricing structure of the companies is perfect. Zara also have to pay more attention towards their pricing structure. The current pricing strategy of the company is Competitive while operating in the region of the Spain; however the company has to change the structure accordingly. Pricing structure of the company should be change to a level of Penetration pricing strategy, in which the pricing of the product should be placed on a lower level accordingly for their productivity.
Place
Currently the place strategy which Zara is utilizing while having their presence in the market of Spain is Offline, however the company has the chance to have online place strategy as well, which are increasing trends in the current economic scenarios (Simerson & Venn, 2006). Place strategy of Zara is perfect; however it needed to be change accordingly while entering in the region of the UK.
Promotional Strategy
Promotional strategy is the most important deliverables from the viewpoint of an organization, and no organization can ignore this particular provision of a company (Simerson & Venn, 2006). Zara’s promotional strategy is very weak; however this thing will not work in the region of the UK, wherein the stance of competition is extremely high. The company has to use the electronic and paper medium techniques to promote their products in the markets accordingly, otherwise it will become extremely difficult for them to sustain in the market for a long span of time. Apart from that Social Media networking has now emerged as the cheapest medium of marketing and promoting the products to the international market, and the company has the chance to deliver the same in their market with effectiveness.
People
The current target market of Zara is the high income individuals, as the company has very low solutions for the low income people (Simerson & Venn, 2006). The company has to expand their momentum and network of their target market accordingly to get the appreciation in the market of the United Kingdom (UK). It is the only way from which the company can integrate effectiveness in the market with prosperity, and get the things in the right manner accordingly and effectively at the same time.
Process
Process is an important aspect from the standpoint of an entity; however it is more towards the manufacturing organizations rather than with the service oriented organization. Zara is not a manufacturing company, but they have the accolade to make and then launch a new product in the market in a matter of just two weeks, which is an effective sign for the company.
Physical Environment
The physical environment of Spain is great, and it will be even greater when the company will enter in the region of the UK. It will affect from both financial and non financial angle to the company, which is an effective sign for Zara in the future.
Recommendations
Conclusion
Expansion in the international market is an important aspect for an organization; however it is very difficult to gain confidence of the people in the new market. However, there are certain strategies that can be used for the same purpose, and it can be applied over the viewpoint of Zara as well. Zara is one of the largest retailers of the world, which is trying to enter in the region of the UK. In this assignment the recommendations are provided through the SWOT analysis and 7Ps of marketing framework. It is evaluated from these models that it will be effective for the company to enter in the region of the UK, as it has positive news for their financials in the future.
References
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