Case Study Of Zara's Differentiation Strategy

Differentiation strategy is generally reserved for companies with a clear competitive advantage. Companies such as Mercedes and Apple employ this strategy. Differentiation strategy is demonstrated when a company provides value to customers through unique unique features and characteristics of a company's products rather than by the lowest price (Open Learning World 2010).

When pursing a differentiation strategy, the focus of competition is to add unique features in order to

The business idea of Zara is to link customer demand to manufacturing, and to link manufacturing to distribution. And based on this general idea, Zara has several essential elements for its business model. First, speed and decision making, which means that in the external level, Zara need to respond very quickly to demands of target customers, and always keep in style. While for the inside, Zara treasure intelligence and judgment of common employees who enjoy a great deal of autonomy. Second, its marketing, merchandising and advertising strategy. Zara does not spend on virtually advertising, while it spends heavily on stores, and no selling online because of

differentiation through superior quality of its commoditized low price products whereas a true differentiation strategy is characterized by the creation of a unique product for which a premium price can be charged. Q. 2. In order to implement a

Another way there strategy contributors to their success is that they have the capability to keep a significant amount of product in home soil in there won factories and reserve approximately 85% of their capacity for seasonal adjustments this way they will be able to rapidly respond to unexpected trends in the industry. Additionally they use foreign factories as many other companies do as cost is much cheaper which allows production to increase and distrusted accordingly, however for fast fashion items Zara produces in

Zara’s strategy is to offer cutting edge fashion at affordable prices by following fashion and identifying which styles are “hot”, and quickly getting the latest styles into stores. They can move from identifying a trend to having clothes ready for sale within 30 days (whereas most retailers take 4-12 months). This is made possible by controlling almost the whole garment supply chain from design to retail.

According to Pearce & Robinson (2011), “a successful differentiation strategy allows the business to provide a product or service of perceived higher value to buyers at a “differentiation cost” below the “value premium” to the buyers”.

The basic strategy for fighting competition is to attract buyers at lower prices, more unique designs, high-quality design, efficient customer service and solid image brand. Thus bargaining power of buyer for apparel industry is high as the products falls under the basic needs in human lives. There is no much difference in terms of products offered by the apparel company, so if buyer is unhappy with the product or service they can easily switch to another brand. Thus, Zara are trying to strengthen its position in the market by using their unique strategy by giving priority to buyer to meet their special needs.

The strategy being implemented by the firm is what we call the differentiation strategy. A differentiation strategy calls for the growth of a product or service that offers exclusive attributes that are valued by customers and that customers pick out to be better than or different from the products of the competition. The value added by the distinctiveness of the product may allow the firm to charge a premium price for it. ASW

The core concept of Zara 's business model is they sell "medium quality fashion clothing at affordable prices", and vertical integration and quick-response is key to Zara 's business model.  Through the entire process of Zara 's business system: designing, sourcing and manufacturing, distribution and retailing, they presented four fundamental success factors: short cycle time, small batches per product, extensive variety of product every season and heavy investment in information and communication technology.  These four elements are involved in every aspect of the business.

The goal of a differentiation strategy is to increase the perceived value of goods and services so that customers will pay a higher price for additional features. While the goal of a cost-leadership strategy is to reduce the firm’s cost below that of its competitors. Differentiation strategies can differentiate based on superior quality and unique features, image of prestige. A company that uses differentiation strategy can achieve a competitive advantage as long

Product in the marketing mix of Zara. Zara is known as the coca cola of fashion. Such as craze of this brand among the fashion enthusiasts one of the major strength of the company is that it is able to respond very quickly to the changing needs of the customers. Pricing in the marketing mix of Zara the concept of Zara is to provide its products at a reasonable price to its customers. It follows the customers find its prices quiet affordable. However, we have to know that we are referring to the cream customers who would compare Zara with Hugo boss or others. Zara has premium pricing strategy. The pricing made optimizing development and training costs. Promotions of marketing mix in Zara .it is a unique marketing policy of "zero investment in marketing". Instead, the company uses money it would have used to advertise in opening new stores. The striking thing about Zara Is that it has found differences that matter to the consumers and used that to differentiate itself from the rest of the competition. In the place in marketing mix of Zara. Is very unique and one of the things that make

Zara available cost leadership strategy and additionally differentiation system, combined this to win its competition. Zara play at fair price because they build cost authority strategy, consequently even they set for reasonable price they nonetheless could gain reasonable perimeter. And developing differentiation tactic enables Zara to design and end products in a much reduced time as opposed to the competitors.

Zara was first came into existence and well established in the year 1975 and it is under the control of Spanish owner Amanico Ortega Gaona. Firstly the store which is local based manufacturing company was dealing with Zara products which include outlets especially for orders which are cancelled related to lingerie and women wear. These relationships slowly lead to develop into strong relationship between retailer and producer of the products (Ferdows et al, 2003). The Company Zara was in collaboration with parent company called Inditex, both these companies mainly focused on customer demand and supply products as per needs of customers and able to establish supply chain

The company’s vision as stated on the website: “Zara is committed to satisfying the desires of our customers. As a result we pledge to continuously innovate our business to improve your experience. We promise to provide new designs made from quality materials that are affordable”.