Strategic issues of Zara Essay Example | Topics and Well Written Essays - 3250 words

Strategic issues of Zara - Essay Example It is interesting to mention that the basic retailing theme that is followed by the flagship brand is highly unique in nature. The brand of Zara largely focuses on the process of providing fashionable retail products of average quality at highly competitive prices to the consumers of the world (Morris, 2013). It needs to be mentioned that the brand of Zara is largely present in various markets around the world. Also, the company has attained tremendously high levels of efficiencies in regards to maintaining the distribution channels as well as managing the logistics and supply chain. It can be said that the efficiency of the supply chain attained by the flagship brand Zara helps in attaining significant advantages related to shorter product lifecycle, shorter turn around and reduced time for production. Thus, it can be said that the logistic and supply chain efficiency can be treated as a pillar of strong point and significant advantage for the company. ... Detailed analysis of the competitive forces It can be highlighted that the best way to undertake an analysis of the competitive forces that are affecting the business prospects of the retail company is to conduct an analysis of Porter’s competitive forces. It needs to be mentioned that Porter’s five forces strategy talks about the competitive issues that arises from the multiple factors like bargaining power of suppliers, bargaining power of consumers, power of substitutes, threat of new entrants as well as inter firm rivalry (HBR, 2008, p. 4). Source: HBR, 2008 p. 4 Now matching Porter’s five forces competitive strategy with regards to organizational issues of Zara, it can be said that several challenges and cases can be highlighted at the same time. Talking in regards to the bargaining power of the suppliers, it needs to be highlighted that more than 50% of the retail merchandise of Zara are produced in an in house fashion. It is important to highlight that bec ause of this particular practice, the globally acclaimed retail organization has developed the advantage in regards to gaining momentum in various complex task based process, lower cycle time as well as minimization of error. However, talking in more details in regards to manufacturing practices, it can be said that the various processes involved in the manufacturing process of the firm’s end products are often outsourced to the network of local cooperatives, who work with the company only on the basis of long term good will. Hence, in this particular case, the negotiation power of the suppliers and local manufacturers are pretty low as compared to that of the organization.