Carrine Kezia Aulia presented a final project on Zara, a global fashion retailer owned by Inditex Group. The 3-sentence summary is:
Zara was founded in 1975 in La Coruna, Spain and has grown to over 1,700 stores in 82 countries, known for its ability to spot trends and quickly design and produce fashionable clothing at affordable prices. The presentation outlined Zara's company profile, operations in Spain and commitment to corporate social responsibility, as well as its strategic plan to expand further in Asia through improving its online presence and social media engagement. Competitors including H&M, Gap, and Uniqlo were also discussed.
2. PRESENTATION OUTLINE
• COMPANY PROFILE
• SPAIN GENERAL ENVIRONMENT
• CORPORATE SOCIAL RESPONSIBILITY
• STRATEGIC PLANNING
• COMPETITORS
• ORGANIZATIONAL STRUCTURE
• STAFFING, TRAINING & COMPENSATION FOR GLOBAL
OPERATIONS
4. ABOUT ZARA
• Zara’s founder is the first richest person in Spain and the third richest
person in the world (2013). This person is Amancio Ortega
• Zara is owned by Inditex Group
1975
1976
1985 NOW
Spreading stores in Spain
First store in
La Coruna, Spain Spreading to the world
1,700 stores, 82 countries
11. HOFSTEDE’S
CULTURE DIMENSION
• Hierarchical distance is accepted
• Those holding the most powerful positions are admitted to have
privileges for their position
• The superior still need information from his/her subordinates while
subordinates expect their boss to control them
12. HOFSTEDE’S
CULTURE DIMENSION
• Spanish people in general, consider it is important to have rigid
codes for everything.
• People tend to look for more stability in their life and work.
• 75% of Spanish young people wanted to work in civil service
• Confrontation is avoided
13. HOFSTEDE’S
CULTURE DIMENSION
• Compared with the rest European countries (except Portugal) Spain
is tend to be more collectivist.
• Compared with other areas of the world, Spain’s score is tend to be
more Individualist
• Spanish quite easy to relate with (mainly) non-European
(collectivist country), than other European countries.
• Teamwork among workers is natural and no need strong
motivation from the superior in order for workers to commence in
this act.
14. HOFSTEDE’S
CULTURE DIMENSION
• Tend to be more feminime.
• It shows more tenderness.
• Avoid a direct and confrontation style, conflicts are resolved by
compromise and negotiation.
• Managers are not expected to be so aggressive or competitive, but
tend to pay attention to the human aspect.
17. DOING BUSINESS IN SPAIN
Business Values
• Avoid confrontation
• Trust and personal relationship are the keys of success
• Time consuming
• 10 really means 10:30 or 11.
• Negotiations may day longer than expected.
• Informal
• Hierarchical country – final decisions – most senior managers.
• Do not insist on written confirmation of a deal.
19. ZARA’S CSR
• The following are some of the objectives and actions:
o AT THE STORE
Save energy
The eco-friendly shop
Produce less waste, and recycle
Commitment extends to all our staff
An environmentally aware team.
20. ZARA’S CSR
o WITH THE PRODUCT
Use ecological fabrics
Organic cotton
o IN TRANSPORT
Use biodiesel fuel
o ANIMAL WELFARE POLICY
o FRAGRANCES
21. ZARA’S CSR
August 2011
• Zara is being accused by Brazilian Ministry of Labor of
Human Rights Violations
• Poor working condition – 14 hours per day
• After two weeks, Inditex published new measures for
factory in Brazil
• Agreement was reached in Dec 2011 with compensation
of 1,8 million dollars
22. ZARA’S CSR
November 2012
• Zara committed to eliminate all releases of hazardous
chemicals throughout its products by 2020 (Greenpeace’s
Detox Campaign)
•“Greenpeace welcomes Zara’s commitment to toxic-free
fashion. If the world’s biggest fashion retailer can do it,
there’s no excuse for other brands not to clean up their
supply chains and make fashion without pollution,” said
Martin Hojsik, Detox Campaign Coordinator at Greenpeace
International.
24. MISSION STATEMENT
"To hold big market share among young and
fashion conscious city dwellers in
all continents by quickly respond their demand."
25. BUSINESS OBJECTIVE
To be the number one supplier of affordable
fashion in the world and to continue its expansion
globally adding another 520 new stores and
increase market share of Zara by 5% and sales by 10%
particularly in the Asia/ Pasific region by 2016.
26. SWOT ANALYSIS
•High brand value
•Vertically integrated retailer
•Strong distribution channel
•Spot emerging trend and react quickly
•Stores around the world (1.700 stores in 82 countries)
•High quality at reasonable price
•Customers' comment and feedback
•Prime retail locations
•Do CSR
•High productivity (20 Factories in 5 countries)
strengths
27. SWOT ANALYSIS
•High cost (high rent in expensive location)
•Lack of advertising
•Online presence
•Limited stocks - stocks run out quickly
weaknesses
28. SWOT ANALYSIS
•Expansion plan
•Strong brand image
•Online market
•Growing apparel market in Asia
•Diversification Opportunities
(Zara Home, plus sizing, add new product,
e.g. accessories - shoes, bag, etc)
opportunities
29. SWOT ANALYSIS
•Strong competition
•No advertising campaign
•Euro centric production
•Fluctuation in exchange rate
•Defeated by competitor (online shop)
threats
30. STRATEGIC CHOICE
• Improve online shop function, process handling, shipping,
and return service (e-commerce strategy)
• Multi functional online shop (dress room option)
• Iphone and Ipad application
• Social media (Facebook, Twitter, Pinterest)
• Complete stock rotation every 15 days
• High development of new designs in 14 days
• Launches around 10.000 new products each year
specialization
32. STRATEGIC CHOICE
• Demographic segmentation
o Women/ Men
o Aged 18-40
o Mid-range income
• Lifestyle segmentation
o Interested in fashion trends
o Small and plus sized shaped (6-18, XXS to XL)
segmentation
33. STRATEGY IMPLEMENTATION
• Zara is focusing on Internet online marketing opportunities such as
e-commerce strategy and social media to promote traffic on
zara.com as well as attracting visitors to the online shop.
• Zara’s online shop currently operating in 22 countries, included 2
countries in Asia, China and Japan (Still expanding)
35. COMPETITIVE ADVANTAGES
•Expanding geographic market without sales forces and huge
capital invest.
•Shoppers can purchase products 27/4 (No time limit).
•Another marketing channel (Customer reviews and
testimonials).
•Broader Zara's potential customer base.
•Greater flexibility to promote without expensive printed display
material.
36. POSSIBLE STRATEGY
•Exporting
•Franchising (The Stockmann Group - Finland 2013, Mitra Adi
Perkasa - Indonesia)
•Off shoring (Bangladesh, Turkey, Vietnam, and Portugal)
•Joint Ventures (Tata Group - India 2010)
•Wholly Owned Subsidiaries (Italy, Russia, and Japan)
40. ORGANIZATIONAL STRUCTURE
• Integrated global structure
o Shorter lead times
o Decentralized decision making
• Vertical integrated structure
o Manages all design, warehousing, distribution, logistic
o Flexible in the variety, amount and frequency
To hold big market share among young and fashion
conscious city dwellers in all continents by
quickly respond their demand
To hold big market share among young and fashion
conscious city dwellers in all continents by
quickly respond their demand
42. STAFFING, MOTIVATING & COMPENSATION
• They “sell” their strong brand image to attract their future
employees
• Makes people “needed”, through their contribution
43. STAFFING, MOTIVATING & COMPENSATION
• Store managers – 70% of salary come from commission
• Individual bonus = the success of the team
• Training program and avenue for career development
• Health insurance & retirement plan
• 15% discount
• Annual trip/ gathering
• Tuition reimbursement
• Business travel
globally
44. STAFFING, MOTIVATING & COMPENSATION
• Employee’s card (25% discount)
• Management development training program
• Rapid career progression
• Annual trip/ gathering
• Reimbursement (transportation and phone call)
• Health insurance and retirement plan
• Hand-phone, car, private driver, apartment for expatriate
managers
zara indonesia
Company Profile
Founder
History
Brand product
Spain General Environment
Hofstede’s Culture Dimension
High context and Polychronic Culture
Doing Business with Spanish
CSR
Strategic Planning
Mission Statement
Business Objectives
SWOT
Strategic Choice
Strategy Implementation
Competitive Advantage
Possible Strategy
Competitors
Organizational Structure
This fashion group also owns brands such as Massimo Dutti, Pull and Bear, Uterqüe, Stradivarius and Bershka.
The Zara’s first store was opened in La Coruna, Spain on 1975, and on 1976 Zara started to spreading their stores in Spain, and now, in 2013, Zara has 1,700 stores in 82 countries.
which more specifically for younger women
People in high power distance cultures are much more comfortable with a larger status differential than low power distance culture.
Spain’s score in this dimension is 57, which means medium tends to be high, reflects BALANCE hierarchical distance is accepted
those holding the most powerful positions are admitted to have privileges for their position.
makin tinggi makin menghormati ketuaan, indonesia 78, amerika 40
1. As the second noisiest country in the world, Spanish prefer rigid rules because they believe change causes stress, at the same time, they are obliged to avoid rules and laws, in fact, make life more complex.
2. at this respect they seem to have lower ambitions of achievement and innovations are not expected to occur so often as well
4. in recent survey.
which means they needn’t to concern about the future, because the job is already guaranteed.
USA 42, only 17% of young people would like it
INDONESIA 48, tapi aneh, banyak org lebih ke civil – harusnya tinggi kaya si SPAIN
Spain score in this dimension is 51, which is medium score,
4. Medium score in this dimension shows that Teamwork among workers is natural and no need strong motivation from the superior in order for workers to commence in this act.
1. As a collectivist country compared with other european country, you should avoid confrontation as much as possible, because spaniards do not like to admit that they are wrong, especially in public COMPROMISE
2. As a high-context country, Feeling, trust, and personal relationship should be your primary focus, you should allow sufficient time in your travel arrangements for long meetings and socialising, to allow time to get to know each other.
3. Planning to meet at 10 really means 10:30 or 11, people late for business meetings because they care more about family time and building friendships than they do work. It’s not rude to people from polychronic culture, because it is expected.
During negotiations, they will move freely between topics and may days longer than expected.
4. As we can see from power distance dimension, Spain tend to be more Hierarchical country, that’s why final decisions are only made by the most senior managers in the company.
5. Due to the value of trust within business relationships, Spanish executive usually do not insist on written confirmation of a deal.
We save energy. The eco-friendly store. We are implementing an eco-friendly management model in our shops in order to reduce energy consumption by 20%, introducing sustainability and efficiency criteria. This management model sets out measures to be applied to all processes, including the design of the shop itself, the lighting, heating and cooling systems and the possibility of recycling furniture and decoration.
We produce less waste and recycle.
Recycling hangers and alarms, which are picked up from our shops and processed into other plastic elements, is an example of our waste management policy. Millions of hangers and alarms are processed each year and both the cardboard and plastic used for packaging are also recycled.Our commitment extends to all our staff.
Increased awareness among our team members. We hold In-company awareness campaigns and specific multimedia-based training programmes to educate our staff in sustainable practices, such as limiting energy consumption, using sustainable transport and modifying behaviour patterns.
1. We use ecological fabrics. Organic cotton. Zara supports organic farming and makes some of its garments out of organic cotton (100% cotton, completely free of pesticides, chemicals and bleach). They have specific labels and are easy to spot in our shops.
2. Zara's fleet of lorries, which transport more than 200 million items of clothing a year, use 5% biodiesel fuel. This allows us to reduce our CO2 emissions by 500 tons.
3. All products of animal origin sold in shops, including fur and leather, come exclusively from animals raised on food farms and under no circumstances come from animals sacrificed exclusively for the sale of their hide.
4. Also, in line with their commitment, Zara fragrances are not tested on animals.
I found that zara have had a problem according their CSR,
Framework development on the e-commerce strategy
License issue
Hire new staff to support the marketing team
IT standard on global immigration
New online shop implementation
Project support by beginning of 2013 and hire new staff to the team
Communication over the complete implementation phase - weekly meeting
Based on figure 1, the first phase will consider the project evaluation by the end of 2012, the second phase will implement the redesigned IT setups offline by mid of 2013 and the third phase will release the new redesign online shop by end of 2013.
by using this strategy
zara brand : famous multinational company with trendy and fashionable product
it makes people want to be a part of what zara is doing, and when zara satisfy this desire in their staff, zara receive their admiration, loyalty, respect and cooperation