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9001SMGT_1803 Strategic Management Team Assignment

9001SMGT_1803 Strategic Management Team Assignment

Strategic Management Team Assignment

1.   Introduction(words 164)

Evidence suggests that the stronger a company’s current overall performance, the more likely it is directed by a well-conceived and well executed strategy (Thompson,Peteraf, Gamble& Strickland, 2016, ). This paper explores the organisational strategy of Zara, a Fast fashion company, referring to the design, creation, and marketing of clothing fashions that reflect fashion trends quickly, readily available and cheaply to consumers. Zara successfully meets three criteria of an effective organisational strategy, as identified by Thompson et al, (p.80, 2016):


1.      Achieves stated financial and strategic goals;

2.      Financial performance above industry standard;

3.      Gaining customer and increased market share.

Throughout this discussion Zara’s organisational and market performance will be benchmarked against three rival fashion retailers- H & M, ASOS and Cotton On. Organisational strengths and weaknesses, key success factors (KSF) will be analysed to determine Zara’s competitive advantage in its strategic execution. This review demonstrates the importance of understanding drivers in both internal and external environment that impact business success. (Thompson et al, 2016).


2.  Fast Fashion Industry and introduce Zara

Zara is a member of the Inditex Group, a new generation fashion retailer who has instigateda variety of innovative management systems in fast fashion supply chain to optimise their competitive edge in the market.

Zara, established in 1975 in Spain, is a leading global fast fashion volume garment retailer. Over the years, Zara has remained authentic to its core values, expressed simply across all Zara stores: beauty, clarity, functionality and sustainability.Without advertising, their successful business model dominates the fashion industry, such that in 2017 revenue $12.1B US, an increase of 9% from 2016, additionally, the organisation employs over 12,000 employees and has over 2,200 stores across the globe(Forbes, 2017, Statistics.com).

Zara’s owns most of its supply chain allowing for vertical integration to align business objectives.Delivery of catwalk fashion in as little as 15 days, through synchronisation of schedules and partner relationships which accelerate production and distribution (Richardson, J, 1996).

Zara is an example of an organisation who is strategically aligned, as demonstrated throughout this paper. Trevor &Varcoe (2017) state that a rigorously managed enterprise value chain that connects an enterprises purpose, to its business strategy; organisational capability; resource architecture and management systems ensures enterprise alignment, as demonstrated below in Figure 1.

2.1      Competitors(word count 369)

H&M began with the opening of a small shop in the country town of Va¨stera˚s in Sweden in 1947. It has since grown to over 1000 stores and approximately 40,000 employees across various countries (Slack et al. 2015).  H&M’s biggest difference to the other fast fashion retailers is that H&M believes fashion does not have to be expensive. H&M’s business concept has been, “to offer fashion and quality at the best price” (Giertz-Mårtenson 2012). H&M have over 100 designers that work for the company together with buyers and pattern makers who work with other suppliers around the world. The company’s sales revenue for the 2017 financial year was 231,771 million which was up 4% from the previous year (H&M group reports. 2018).

ASOS is a global online fast fashion outlet who sell more than 85,000 branded as well as their very own labelled products. ASOS has eight different warehouse sites across the world but have already delivered their products across 240 different countries and territories, ASOS sales revenue for 2016 financial was up 26% to 1.444 billion and currently have an active customer base of 12.4 million (ASOS plc. 2018). As the company continues to grow their mission remains unchanged, to be the world’s number one fashion destination for 20+ somethings. ASOS also focus their business around their core four strategic pillars which are: Great fashion, Great price, Awesome on mobile, engaging content and experience and best in class service.

Cotton on clothing PTY LTD is an Australian owned private company which operates eight brands in 1300 stores across 17 different countries around the world and employs close to 22,000 staff (Cotton On Clothing Pty Ltd – Retail 2018). Cotton On Clothing Pty Ltd sell clothing, accessories, footwear, stationery, and homeware for all of their eight owned brand stores including Cotton On, Cotton On Kids, Cotton On Body, Rubi Shoes, Typo, Factorie, T-bar and Supre. The company’s main focus is to target price and fashion conscious young people via their eight brands with fashionable products that people can afford. The group have also developed an online presence via their brands to tackle the growing market in this industry of online shopping which continues to grow within their business.



 3.  Key Success Factors and Analysis

Key success factors (KSF) are defined by Howell (2009) as the elements that must be delivered, whether it be systems, product or service attributes, resources and operational approaches to succeed and ultimately achieve the company’s purpose, mission and objectives.  Figure 2 reflects Zara’s identified KSF as being lead time- referring to short production time, inventory on the floor for short periods with marketing focus on impulse buying, scarcity and variety. Market research and response, distribution and advanced IT all contribute to the success of Zara as an International leader in Fast Fashion.

Reference list     


Ahenkora, K &Peasah, O 2011, 'Crafting strategy that measures up', International Journal of Business & Management, vol. 6, no. 10, pp. 278–283.

ASOS plc. 2018. ASOS plc. [ONLINE] Available at: https://www.asosplc.com. [Accessed 27 March 2018].


Benavides, L, Eskinazis, VD & Swan, P 2012, ‘Six steps to successful supply chain collaboration’, CSCMPs Supply Chain Quarterly, Strategy, Quarter 4 retrieved 20/9/17 via http://www.supplychainquarterly.com/topics/Strategy/20120622-six-steps-to-successful-supply-chain-collaboration/

Business of fashion, retrieved 26/3/18 via https://www.businessoffashion.com/community/companies/zara




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