Zara Essay

768 Words4 Pages
Porter’s Generic Strategies According to Porter, there are basically three strategies that provide opportunities to organizations to have a competitive advantage over others, namely Cost leadership, focus and differentiation. These strategies are termed as Porter’s Generic Strategies. The diagram outlines the framework of Porter’s Five Generic Strategies and Zara’s position in this classification. SIZE OF MARKET | | GENERIC STRATEGIES | | | Cost Leadership | Differentiation | Focus | | Large | | | | | Small | | | | Zara adopts differentiation strategy to have a competitive advantage over the other major players in the industry. The differentiation strategy involves production of product or services, which is unique throughout the industry and because of its uniqueness the customers are willing to pay more for it. The uniqueness may be in terms of design, brand image, technology or customer service. In case of Zara, it is the fast fashion philosophy adopted by the company. Zara’s unique selling point is to design and produce the latest fashion trends within a short span of two weeks. And these new styles are only available for sale on the floors only for a period of 4 weeks. The inventory of the products that are left out and do not sell, are immediately pulled from the floor and are discontinued. For Zara, the size of the market is large as it is targeted to the industry-wide. Zara is leader in the retail industry because of its strong differentiations. The Zara’s core concept of “fast fashion” is one of its strong differentiation, whose pillars are formed by its excellent and unique supply and value chain. Zara Home also follows the same philosophy as its sister company Zara, and keeps on changing the design of its furniture throughout the year. It is advised Zara continues with same strategy of its sister companies because of its already

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