Strategic Review based on Zara Case Study Essay

Strategic Review based on Zara Case Study - Essay Example The report presents a brief introduction to the capabilities and competence of the organization which leads to the competitive advantage of Zara over its rivals. Resource audit of Zara briefly highlights the physical, financial, and intellectual resources of the company. It also puts some light on human resource and then critically evaluates the intangible assets of the company. The report clearly mentions that vertical integration is the hallmark of Zara which is well supported by its value chain. The paper critically discusses how Zara adds value to its products to gain a competitive advantage to dominate the fashion industry. Zara is one of the most recognized global brands in the world, but it was badly affected due to the allegations of slave-labour. The incident is stated briefly in the middle of the paper. In the end, the case study configures that Zara is practicing a hybrid strategy which is combination of cost leadership strategy and product differentiation strategy. The pa per recommends few steps and target markets where Zara should venture. No doubt, due to globally changing scenario, Zara must take few innovative steps with respect to its online retailing network and expansion strategy. Table of Contents Table of Contents 3 1.0Introduction (203 words) 4 1.1 Aims and Objectives 4 1.2 Methodology 4 2.0The External Environment (1201 words) 5 2.1 PESTEL-DG (All information extracted from Appendix-1) 5 2.2 Porter’s 5 Forces 7 3.0The Internal Strategic Audit (1192 words) 9 3.1 Resource Based View (RBV) 9 3.1.1 Resource Audit 9 3.2 Value Chain 11 4.0The Company Reputation and Brand Image (486 words) 13 5.0Zara’s Strategy and Recommendations (1308 words) 15 6.0REFERENCES 20 7.0 Appendices 23 7.1 – Appendix 1 – PESTEL-DG 23 7.2 – Appendix 2 – Porter’s 5 forces 24 7.3 – Appendix 3 – Resource Audit 25 7.4 – Appendix 4 – VRIO Model 26 7.5 – Appendix 5 – Value Chain 27 1. 0 Introduction (203 words) Zara apparel has become the flagship brand of the ?2.5 billion holding group Inditex (Zara Case Study, 2013), Zara has 1,751 stores around the world with 65 in the UK alone (Inditex Group, 2013). The company’s founder, Amancio Ortea Gaona, began retailing clothes in 1963 with the first Zara store opening in 1975. He is current the third richest man in the world with a net worth of ?38 billion (Forbes, 2013). Zara’s strategy has been instrumental to its success, hence why it is so important to analyse it. This report is a strategic report which will review Zara and the industry it is in. It will primarily focus on the UK market but will also include global aspects. 1.1 Aims and Objectives This report has four main aims and objectives: To analyse the external environment To carry out an internal strategic audit To review the company’s reputation and brand image To identify the company’s current strategy and give recommendations on how they should continue in the future. 1.2 Methodology This report took an analytical approach grounded in existing literature and evidence from reliable journalistic, practitioner and government sources. All the research is secondary research based mostly upon qualitative data but also including quantitative information were needed. 2.0 The External Environment (1201 words) This section is focused to looking at the external envi