Strategic Audit Brief Zara Report

Document Type:Report

Subject Area:Audit

Document 1

Inditex was founded by Amancio Ortega in the year 1963 and the founder adopted unique business models which were flexible and innovative (Hansen 2012). This has made the company remain at the top compared to its competitors and in 1975, the company established Zara’s first store. Zara provides fashionable designs for kids, women and men. In addition, the company sells accessories to complete its product lines (Hammoudeh 2014). This report focuses on the summary of the strengths, weakness, opportunities and threats which the company experiences in its operations. With such strengths identified, the company appears to be more preferred in the market compared to its competitors and therefore through maximizing these strengths, the company is able to increase sales and continue to dominate in the market.

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In addition, the company owns its stores and this has helped to lower its operations costs because it does not need to pay for the stores (Hansen 2012). The company also sells directly to the customers and by doing so it is able to interact with individual consumers and get to understand their needs more thus helping the company to design products which are consumer oriented. This has resulted in the limited advertisement of the company’s products hence minimizing costs. Another strength of the company is the dependency to maintain its international logistics as well as online selling. Zara stores are located in many countries around the globe and therefore the company has many opportunities to invest and expand its market share as in China and India.

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Albania is a good opportunity for the company to grow through opening stores because there are many potential customers who like high-value brands (Willems et al 2012). Expansion through opening new stores for the company has continued to provide the company with opportunities to exploit the market. Analysis of the company’s threats revealed that Zara competitors such as GAP, H&M as well as new entries who want to enter the market and capitalize on the potential markets, for instance, Albania. This is a big threat because competition will become stiffer and Zara will be forced to spend more through marketing and providing cheap products in order to out-compete the other companies in the market (Cortez et al 2014). The act usually involves two competing firms and they usually combine efforts in order to act as one thus minimizing competition in the market.

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For instance, Zara has merged and worked together with the Inditex company in order to capitalize the market and thus fetching high profits as a result of combined efforts. Through merging, businesses are able to grow very fast and expand its operations due to the fact that there is reduced competition and therefore the company has assured sales (Cortez et al 2014). Merging and acquisition help to eliminate unnecessary competition and as a result, companies are able to grow very fast due to profit maximization obtained from more sales. International strategy is a planning management process that is focused towards guiding the operations of a business or company overseas. Zara has maximumly used this strategy because the company has ready spread its operations to many countries and this has promised the company continued dominance in the market (Hammoudeh 2014).

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The company provides several types of high-quality clothes for the kids, women and men. The company has also extensively used information technology and many customers can access most of the company’s products online. Challenges/recommendations One of the challenges facing Zara is being part of the Inditex group. This group has a total of eight companies and this means that failure of any member of this group will also put Zara at a risk of collapsing (Trehan & Mehta 2014). Conclusion Zara is one of the most successful fashion retailer companies which has really transformed from being a Spanish local brand into a global brand. Zara has opened several stores in several countries and this has really contributed towards the success of the company because it has made it possible to carry out daily activities at the minimal cost.

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Through the reduction of costs, the company has been able to perform better in the market compared to its competitors. Regardless of the several challenges faced by the company, it is evident that the company has remained to be people’s choice especially when it comes to fashion and design. The company should, therefore, concentrate more on identifying more opportunities and expanding its operations in order to remain successful. Vegafria, E. Fast fashion quadrangle: An analysis. Academy of Marketing Studies Journal, 18(1), 1. Hammoudeh, R. Zara, from Spain to the big wide world. Sansmaran Research Journal, 4(2), 39-54. Willems, K. Janssens, W. Swinnen, G. Brengman, M.

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