Strategic Management (report) Essay Example | Topics and Well Written Essays - 2500 words

Strategic Management (report) - Essay Example Zara makes a third of all its sales in Spain. However, recently it has intensified its business in other European markets such as France, Italy, Portugal and the United Kingdom. Established in the year 1975, the business unit has now 1608 stores across the world, offering products for men, women and kids. This report analyses the Inditex group and its business unit ‘Zara’ in order to gain a comprehensive understanding of its strategies in the market. The report starts with the analysis of the industry followed by the company and its business unit. In the end, a conclusion has been inferred from the entire analysis. ‘Porter’s five forces’ model is a useful framework to analyse the industry’s attractive towards any business (Hill & Jones, â€Å"Porter’s Five Forces Model†). The following is the analysis of the specific business unit ‘Zara’. Porter has identified four factors which are capable of influencing the level of competition and profitability in the industry. The buyers’ power in this fashion industry is moderate. Zara offers its customers the look-alike premium products at a lower price. So, the switching cost for the buyer is a bit higher. On the other hand, Zara keeps all trendy and fashionable merchandises according to the customer requirements at a reasonable price. Zara is a flagship business unit of a leading fashion group. So the bargaining power of the suppliers is a bit low in this industry. The company requires its suppliers to be aligned with certain requirements of working practice, ethical activities, safety, quality and environmental standards. The low bargaining power of the suppliers reflects from the fact that the company has ceased 175 suppliers in the year 2008 and 145 suppliers in the next year because of their non compliance with the required standards. Zara has been one of the significant business units of the leading business group. Definitely the