Documente Academic
Documente Profesional
Documente Cultură
4TH SEMESTER
BUSINESS STRATEGY
SUBMITTED TO:
MADAM AYESHA
SUBMITTED BY:
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BUSINESS STRATEGY
TABLE OF CONTENTPAGES
References..20
Scenario:
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BUSINESS STRATEGY
There is a foreign clothing retail brand (for e.g. ZARA, NEXT, PRIMARK etc.) that is planning
to start its operations in Pakistan. This information will be used by Board members in a meeting
where they will look into stakeholder, national and global environments and the effect it has on
business and will decide their future direction.
Task 1:
Design a mission statement, vision, goals and objectives for your clothing retail brand. Keep in
mind the above scenario while designing the objectives for the firm. (Pre-submission: 30/04/13)
The mission statement of ZARA is about that ZARA walks at the pace of society, dressing
ideas, trends and tastes that society itself has matured.
The vision statement of the ZARA is to give the customer an exclusive choice of fashion by
providing a quicker turnover of new stock than other fashion retailers.
GOALS:
ZARA wants to create a community around brand while allowing individuals to feel connected to
ZARA fashion and values.
ZARA through its unique business models and stores has proved its business can be successful
with little or no advertising.
They always innovative their products to enhance shopping experience and provide new designs
at affordable costs made from quality materials which follow latest trend.
Objectives:
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BUSINESS STRATEGY
ZARA as a foreign clothing brand retail brands wants to start a successful operations in Pakistan
in December 2013.
They will decide their future direction while look into stakeholder, national and global
environments and the effect it has on business.
ZARA wants to develop a consumer focused product line and marketing strategy.
ZARA wants to reinforce customer focus as the key driver of the ZARA brand.
Zara should focus on increasing potential consumers and frequency of current consumer.
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Conduct an environmental and organizational audit (resource audit) for the firm. Perform
PESTLE, Porter five forces, and resource audit for the firm.
Its computer controlled the cutting machine which cuts up to 1000 layers at a time. It
then sends the cut materials to suppliers who sew the pieces together. The suppliers work
is relatively simple and many suppliers can do the swing.
Thus, the pool of suppliers is expanded and Zara has greater flexibility in choosing the
sewing companies.
Further s because Zara dyes 50% of the fabric in its plant, it is less dependent on
suppliers and can respond more quickly to mid season changes in customer color
preferences.
Zara forces on meeting customer preferences for trendy, low cost fashion. It has the
highest sales per square foot of any of its competitor.
It keeps the inventory levels very low and offer new products at an amazing pace for the
industry.
The Threats from substitutes such as new fashion designs of ZARA are controlled
through offering all range of clothing and customer loyalty.
Further it has bring online trading it is noted that the competition is low than in other
industries.
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3. Threat of New Entrants:
The ZARA IT supports is strongly join group of designers, market specialists, production
managers and production planners so the New entrants are unlikely to provide IT to
support relationships that have been built over time.
Further it has rich information about customers that would be hard to imitate.
Zara boasts more than 11000 new designs a year where as competitors typically
offer only 2000 to 4000.
Further because of the low inventory that the Zara stores stock, the regulars buy
products they like when they see them because they are likely to be gone the next
time they visit the store.
More recently Zara has employed laser technology to measure 10,000 women
volunteers so that it can add the measurements of real customers into its
information storage. This means that the new products will be more likely to fit
Zara customers.
Since the ZARA Company offers new and fashionable products the bargaining
power of the customer is low.
The ZARA Company faces severe competition from competitors such as M&E, GAP. Due to the
low growth in the fashion industry in Europe this competition has become more severe. So there
are two kinds of competitors existing among the customer that is Global competitor and local
competitor.
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PESTEL ANALYSIS:
Political:
The political factors have also affected the ZARA Company. Some Political factors are given
below;
Import tariff are four times high when goods are imported from developing countries to
developed countries.
Economical:
The Economical impact of the ZARA is such as that the ZARA should have to reduce the
following;
Interest rates
Taxation changes
Economic growth
Exchange rates
Tariffs.
The higher borrowing cost and the financial crisis exist in the European region.
With increase in the interest rates the inflation will increase and buying power of the
customer will decrease.
Increase of fuel prices due to the civil unrest in Middle East may increase the transport
cost and affect to margins of the company.
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Social Culture:
The culture around the ZARA business is so modern and the consumers are also updated. So it is
a competition market but it is very easy to launch the new product in the market.
The ZARA would have to work accordingly to the trend and satisfy customers demand
due to changes in the generation choices.
New trend among younger generation in Europe and USA for fashion.
Technology:
ZARA is base on the use of technology from the year 1970. So ZARA have the following
technology;
Online shopping
Bar coding
Environmental:
The Group environmental commitments of Zara have a direct impact on their shop, products and
policies. So they have to improve the following things include as;
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Legal Factors:
Tangible Resources:
Physical Resources:
2. Factories: 20
Financial Resources:
Intangible Resources:
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Apply SWOT, Ansoff and BCG matrix techniques to define the strategic position of the
given organization.
STRENGHT:
Brand Loyalty
Brand Awareness
WEAKNESS:
Low Quality
Lack of E-commerce
Limitation on service
OPPORTUNITY:
Online marketing.
Brand Image.
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THREATS:
Emerging Newcomers
Competitor
Design challenges
ZARA should have to expand the operations of the Market in Europe and other Continents where
company currently carrying out the operations.
2. Market Development:
The ZARA can develop its Market through expanding the operations to the new countries or
areas where the company sees more potential.
3. Product Development:
The ZARA can develop its product through other new fashionable cloths to existing market
including Europe and other countries. They should expand it in to the new businesses such as
other consumer goods using existing market operations.
4. Diversification:
The Diversification of the ZARA is that as moving to new markets with new designs for cloths.
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BCG MATRIX OF ZARA:
When analyzing the of the ZARA it can be concluded that the ZARA is in the cash cow stage as
its existing operatons generate sufficient cash flows to expand operations to new markets.
Demonstrate your ability to think strategically by designing a strategic plan for your business.
This strategic plan should include;
The strategic Planning of the ZARA Company is considering of Multi format global. The ZARA
has taken steps to grow its store location around the world. According to the annual report of the
ZARA in the financial year 2010 ZARA has opened stores in 45 countries across the world.
Increase consumer Satisfaction and decrease dissatisfaction of the plus size consumer.
Turnover.
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Return on Capital Employed.
1 Keeping in view all the circumstances, suggest future growth strategy for your selected company
(substantive growth, limited growth or retrenchment) by giving reasons to defend the selected
strategy.
Task: 02
Future growths Strategy:
In summer season the ZARA Sales of winter stock decreases so if we design a strategy for the
winter season it will be good for ZARA clothing and redesigning of the product.
Substantive Growth:
The ZARA Company has successfully offers about how to create and sustain a break through
strategy. The ZARA company can be differentiated itself from its competitors through their best
performance of key activities and its supply chain. So ZARA plays a key role in the sustainable
of its position and image.
Limited growth:
The ZARA clothing brands need to double its domestic revenue this will increase definitely its
revenue. So ZARA Company also wants to increase its revenue per store. The Zara company
can be negatively affected by the current economic condition and consumer confidence rarely.
Some limited Growth strategy such as;
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1 Identify and evaluate any alternative strategy for your company from the above given strategies.
Reasons are mandatory to support your reply.
Alternative strategy:
The growth strategy for the ZARA Company will be good enough to keep it as an alternative
strategy because if the ZARA retailer fails to sell a stock in one retail shop then it can also send it
to another shop or an appropriate shop where its demand is high.
This will definitely decrease the risk level of a new product and also the redesigning of the
product.
1. Suggest an overall business-level strategy. Include necessary information about all the
elements of marketing mix for the new strategy. Make sure the strategy is complete and
addresses all the requirements to make your strategy clear and understandable, e.g.
Customer segments (products) youll focus, Market Location and Timing tactics, etc.
Also make sure that the new recommended strategy is in accordance with the companys
vision and mission statement and it will benefit the organization to achieve its goals.
Design a complete marketing (4P's, marketing and sales objectives etc) and financial plan
(overall budgets, marketing budget etc). (Outcome 2.2)
Strategic Level:
The customer demand is more for the new product so the ZARA Company have plan for the
future demand of the customer such as the development of the new product and the competitor
analysis. So the government new policy and the population demographics will be consider in the
strategic level of business.
Tactical Level:
The Tactical level of the ZARA Company includes its information on difference analysis of
ZARA Company such as the stock turnover and the average class sizes of clothing of the ZARA
Company.
Operational Level:
The Operational level strategy of the ZARA Company includes such the Materials, labor and
stock.
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1. Customer segmentation:
The ZARA Company has successfully targeting mainly the middle class of people and the lower
class of people.
2. Market location:
The Market location will be considerable in all provinces of Pakistan and specially the major
cities such as like all the capital cities in all provinces. So this will definitely increase the future
growth and we should also invest and open our franchises in other neighbors countries and
provide the opportunities for the neighbors countries such as Afghanistan and India in order to
increase the demand level of our product.
3. Timing tactics:
The ZARA Company mostly generates enough revenue especially in the two main seasons such
as summer and winter. In each season we have different variety of products. So we should be
attentive and sales more and more in these seasons. Therefore it should be clearly mentioned to
the company operational management. For example summer starts from End of March while the
winter season starts from the end of the October month.
Marketing 4P's:
Product:
The ZARA Company sales its products such as paints and shirts.
Price:
The ZARA Company should keep the moderate price for the middle class of customer in order to
afford it and the price should be set on the cost.
Place:
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The ZARA Company product will be available in all the major cities of Pakistan. And also will
open the branches in Afghanistan and India where the ZARA clothing demand is high.
Promotion:
The ZARA Company will used new product in new market where the demand of the product is
high and ZARA will also do advertisement through which it will attract the customer towards
itself. The ZARA will provide all necessary facilities to the customer and make the customer
satisfy.
Financial plan:
The financial plans of ZARA Company include the owner of capital and bank loan.
Overall budgets:
The Overall Budget for the ZARA Company is keep up to 30 million rupees.
Marketing budget:
The marketing Budget of the ZARA Company will be kept approximately 30% from the total
budget.
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BUSINESS STRATEGY
1 Identify roles and responsibilities for strategy implementation then compare these roles and
responsibilities with a different organization.
Owner:
The ZARA retailers brands is a sole proprietorship business so it is the responsibility of the
owner to see the investment is safe or not.
Area manager:
The roles and responsibilities of the area manager are given below;
The managers should assess the owner to achieve the targets.
In order to check the ZARA Company following the rules and regulation or not it should
deal with the government officer and also the ZARA upper management officer.
They should reduce the complaints of the customer and give satisfaction to the customer
not to repeat it again.
They should do the work on time with the employees.
Account manager:
The account manager is responsible to keep all the record of cash flows.
Sales manager:
The sales manager should have to keep the record of total sales and also the increase of sales so
it is the responsibility of the sales manager.
Marketing department:
The Marketing department is responsible for the advertisement, promotion and distribution.
R&D department:
The research and the development department are responsible for the performing their services in
research, design and production of ZARA clothing that should be innovative.
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BUSINESS STRATEGY
Labors:
The responsibilities of the labors are given below;
The labors should be carefully working during the operation and running of the machines.
The labors should perform their duties as according or assessed by the supervisor or
director.
The labor should perform their work in all conditions of weather.
TASK 3:
1. Evaluate the resources required for the implementation of new strategy; finance, human,
material and time.
Finance resources:
We should have enough funds and time for implementing of our new strategy we should have the
finance at least 1 million dollars which is equal to 98520000.00 Pakistani rupees.
Human: For the implementing of the new strategy we need 100 employees, 200 sales man, 500
labors and 10 honest managers etc in the organization.
Material:
For material we are collecting different kinds of raw materials, plastics, cotton, large machinery
etc which are required for the organization to prepare the best quality products for our customer
desired and supply to the market with respect to the customer demand. The company designs and
cuts its cloth in house and it acquires cloth in only four colors to keep costs low. ZARA
postpones coloring and printing designs until close to manufacture, thereby reducing waste and
minimizing the need to clear unsold inventories.
Time:
For Implementing the new strategy we need at least one month in order to implement the strategy
successfully for example there are some time spend in the manufacturing, ordering , supplier etc.
so it will be take carefully every step of implementing the strategy.
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2. Perform stakeholder analysis for your organization and explain its importance.
1. Manager
2. Financers
3. Directors
4. Customers
5. Sales man
6. Suppliers
7. The local community
8. Employees
9. Owners
10. Customers
11. Suppliers
12. Funders
13. Governments
14. Media
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They can make better strategies and decisions.
The stakeholders can provide feedback to the organization.
Summary:
First when I start my assignment of Business Strategy it seems to be difficult to complete the
assignment but when I start then it was become little I use to collect the data of Zara Company it
preliminary I mention the Mission and Vision of my selected Company Zara then I mention the
goal, objective, porter five forces, BCG matrix and PESTEL Analysis which was little hard to do
then finally I have write the business level strategy and stakeholders Analysis of Zara which lead
me to complete my final Assignments. It was a really good assignment and full of learning and
specially it seek me how to make a strategy for a company. This is a good symbol in my future to
make an effective strategy for any organization.
Limitations:
I was so bored because of load shading which make me late to complete my assignment.
The Zara Company as a foreign company not gave me full detail about its company.
There was shortage information available in net about the company which makes it
difficult to collect the full information of Zara Company.
I used to contact to the company but they not allowed me.
It was hot weather which create little problem while doing assignment.
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REFERENCES:
http://www.ukessays.com/essays/business/the-environment-where-the-
zara-clothing-line-will-be-marketed-busines-essay.pht#ixzz2SbS7o67Y.
http://www.businessweek.com/globalbiz/content/aug2009/gb20090826_71
5608.html.
http://www.slideshare.net/anusaj/zara-ppt
http://www.slideshare.net/jauhari_akash/zara-fashion-marketing-strategy-
and-mis
http://www.businessdictionary.com/definition/stakeholder.html#ixzz2VQ2y
Wf1x
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