Critique Zara’s strategy based upon an evaluation of the external and internal environments facing Zara.

IntroductionUsing your rating of the external and internal environments facing Zara, you are asked to critique Zaras stated strategy of elaboration into (Eastern) Europe and Asia. Consider whether the strategy is feasible, suitable and acceptable. In your answer, consider both the likely benefits as well as challenges that Zara is breathing out to face. How does the emphasis on online expansion fit into the guilds international strategy? Zara opened its first store in 1975 in La Coruna, turn up in northwest Spain. International expansion of the Zara brand began with the opening of a store in Oporto in 1988. By the end of January 2006, Zara was operating in 59 countries with 852 stores 664 stores in Europe (including 259 in Spain), 100 in America, 45 in the Middle East and Africa and 31 in Asia. Foreign sales accounted for 69% of the companys turnover in the year 2005, with Europe being the biggest market so far. This paper critiques Zaras strategy of expansion into (Eastern) Euro pe and Asia, based upon an evaluation of the external and internal environments facing Zara. The ending for global expansion is due to both push and pull factors. The push factors are those which encouraged the organization to anticipate for international opportunities. The pull factors include attractive situations in the host market . Limited market growth opportunities at home were major influences in the decision to expand internationally. With the opening of their first store, Zara discovered that for some, the Spanish fashion and design market was on verge of saturation. Key pull factors included the meekness of Spain into the European Union. The globalization of the worlds economies, the economy of scale to be made and the similarities of consumer spending patterns was an additional pull factor. Strategy is feasible, suitable and acceptable The internationalization of Zara seemed to quest for the classic stage model by first entering the culturally or geographically close st market prior to taking chances in a more distant market. This method aided the companys learning curve. These stages include Reluctance as well as trial Zara focused their expansion on the domestic market. The maturity of the Spanish market led Zara to search for international opportunities. Expansion into Portugal was seen as an attractive as well as acquainted(predicate) market because of their geographical and cultural proximity to Europe. Cautious expansions During this stage Zara expanded into markets with geographical and psychological proximate as well as with minimum directs of socio-economic developments by adding one or two countries each year to their market portfolio. Zara then began operating in Frances fashion capital, with sights on the geographical contiguous EU and points for later expansions in Northern Europe, including Belgium and Sweden. Benefits as well as challenges that Zara is going to face Zara owns many stores in Europe and Asia international expans ion has been adopted by way of three separate entry modes Subsidiaries This direct investing strategy is a very expensive method of entering and it involves a high level of quality management control as well as business risk. Zara adopted such strategy for European as well as Asian countries, which had been perceived for having high growth potential along with low business risks. Joint venturing This is a cooperative strategy where manufacturing facilities and a know-how of local companies have been feature with expertise in foreign companies in the same market, particularly in large, competitive markets where it is difficult to acquire property for setting up retail outlets and where in that respect have been the other types of barriers which need cooperation with a local firm. Franchisee This strategy has been chosen for high-risk countries that are culturally different and have little market opportunities along with a low sale forecast. Franchisees of Zara follow a similar b usiness pattern to their subsidiaries finding product, store location, interior design, and logistics, as well as human resources. When an entry mode has been decided for a specific country, Zara has followed patterns of the expansion called in company as oil stain. Experience guides Zara in these stages of expansions in each country. Emphasis on online expansion fit into the companys international strategy Experience gained in international environments made Zara intent on rapid global expansion, with regard to the cultural and geographic proximate. Zara consolidated its position in the European market as a method of gaining a foothold in the new countries. collectable to the expansion of the European Union, at the start of the year 2006, Zara was operating in 59 countries with 800 stores, with plans to add many more in countries such as Italy, France, Germany and large Britain, with Asia as the headquarters of international operations.ReferencesAlexander, N. (1995b). Internatio nalisation interpreting the motives, in McGoldrick P. and Davies, P., International retailing trends and strategies. London Pitman Publishing. Johanson, J. a.-P. (1975). The internationalisation of the firm four Swedish vitrine studies. Journal of Management Studies, 12 , 305-322. Martinez, J. (1997). Jose Maria Castellano. 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