Zachary Bauer

5-14.   How is strategic management illustrated by this case story?

So what is strategic management? Strategic management the involvement all 4 of the basic
management functions planning, organizing, leading, and controlling. Strategic
management is first demonstrated in this case study when Mr. Ortega opened his first Zara
clothing store with the company’s business model “sell high-fashion look-alikes to price-
conscious Europeans.” Another example of strategic management is when Zara clothing
store planned to do “fast fashion” which is getting designs to customers as quick as
possible. Additionally, strategic management is displayed when Zara’s employees at their
headquarters analyze the computers to see the sales in every store so they can produce the
designs that are popular.

5-15.   How might SWOT analysis be helpful to Inditex executives? To Zara store
managers?
A SWOT analysis would help Indeitex executives and Zara managers a great deal. Even
though Inditex and Zara have been successful because they were able to get their products
to the market quickly, a SWOT analysis could even make them more successful. A SWOT
analysis would help them a great deal because it analyzes the company’s strengths,
weaknesses, opportunities and threats. By doing a SWOT analysis the Inditex executives
can see the potential opportunities to act upon and grow and expand from it. It’ll also give
them insight on potential external environmental factors threatening the company so they
can make the necessary adjustments to avoid them. By doing a SWOT analysis Zara
managers can know that one of their greatest strengths is how fast and efficient their
production is to be able to get their stores stocked with new designs every 2 weeks.
Moreover, a SWOT analysis would reveal some internal weaknesses to the Zara managers,
which would give them the opportunity to eliminate that weakness so they can become
even more efficient.

5-16.   What competitive advantage do you think Zara is pursuing? How does it exploit that
competitive advantage?
The competitive advantage that Zara is pursing and what sets them apart from all the other
competition is their “fast fashion.” Zara ships their clothes directly from the factory to
their stores which gets the designs to the consumers faster. Zara has exploited its
competitive advantage because on average it takes the clothing industry 6 months to get
their newest fashions available for sale. The process only takes Zara two weeks and they
also restock their stores twice a week. All aspects of Zara’s business are contributes to fast
turnarounds and that’s how they are able to exploit their competitive advantage.
 Zachary Bauer

5-17.   Do you think Zara’s success is due to external or internal factors or both? Explain. 
I think Zara’s success is due to both internal and external factors, first let’s look at the
internal factors. At their headquarters they have a long row of computers analyzing sales
to see what fashions trends are a hit and miss almost instantaneously. Also once the new
designs are sent in to the factory for production, computer programs arrange and rearrange
clothing patterns on the massive fabric rolls before they are laser cut to minimize waste.
Also their production factory’s “just-in-time production” gives them speed and flexibility
over their competitors
Now let’s look at the external factors. Zara saw that the slow pace that the clothing
industry was moving at to get their new designs in the store (6 months) and saw a way to
make the process faster (2 weeks). This was one of the reasons why they became so
popular. Also their designs are shipping twice a week and shipping directly from the
factory to the store which wasn’t utilized by the clothing industry beforehand.

5-18   What strategic implications does Zara’s move into online retailing have? (Hint: Think
in terms of resources and capabilities.)
Because Zara’s competitors are working to be faster Zara has come up with new plans to
stay ahead of the industry. To maintain Zara’s leading advantage, CEO Pablo Islahe’s
introducing online retailing to Zara. The strategic implication that this move has is that
they possibly have a way to send orders directly to home in a quick fashion because who
would late a long time to get clothing when they could get it at the store much quicker.
Also that this would allow them to event get sales reports quicker and to see which
designs are hits and misses because everything would be electronic and on the computer
already. This could also imply that they can send their designs to places all over the world
rather than being limited to just their physical store locations.