This is an answer to 5 questions which is given as a pre-course assignment to us from the National School of Business Management, Nugegoda, Sri Lanka.

1. AssessmentSubmissionForm
Student Name Wiratunga S. L. D.
Student Number 13206122
Assessment Title BSc 17 SL Assignment 1
Module Code
Module Title International Marketing Management (SL) BSc In MIS Batch 17
Tutor Markus Vanharanta
Date Submitted 04-08-2014
Office use only
Date Received
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Signed……………………………… Date:- 04/08/2014

3. Introduction to Zara (Inditex).
In 1975, AmancioOrtegastarteda fashionretail shopthatmakesthe fashionable clothesfaster
and beauty thanothercompetitors. The firstZarastore openedin1975 inSpain.The verybestqualityof
Zara was, itonlytakestwoweekstodevelopanew cloth/productandrelease ittothe marketwhile
othercompetitorstake twomonths.Zaradidn’tgetthirdparty helpto distribute,designoreven
produce because Zaradid themalone.
Zara was fashionfocusedproducersthatmakesnew clothes,apparelsaccordingtothe trending
fashion.Zarausesitsown strategicmethodwhichisdone bysendingsome employeestohigherlevel
venues,occasions,functions,clubsetc. Thenthe collectednew designsandpatternswill be forwarded
to the headquarters.AlthoughStore managersare usedtoreportfeedback,new demandsthatisgiven
by the customers.These methodswill helpZaratobe the top amongtheirindustrial competitors.
AlthoughthismethodwillhelpsZarato manufacture more productsthanothers,like 30,000 products
annuallywhileothersare doing10,000.
Anotherunique qualityof Zarais theydon’tkeepproductsthat doesn’tsell foraround4 weeks
and thistrickmake customersto come and see regularlyonZara storesthat“What’s new?”
Withthe developmentprocessof Zarabecome more andmore popularandpowerful onits
industrial market.Hence Zaradecidedtoenterthe marketwithvariousbrands.Theywere categorized
intosome societies.
 1975 – Zara – Fastfashionclothing –Agesbetween0-45.
 1991 – Pull &Bear – Casual clothes – Agesbetween13-23
 1991 – MassimoDutti – QualityFashions –Agesbetween25-45
 1998 – Bershka– Avant-grade clothing–Agesbetween13-23
 1999 – Stradivarius - Trendyclothes –Agesbetween15-25
 2001 – Oysho– Lingerie –Youths(Women)
 2003 – Zara home - householdclothing –Any
 2008 – Uterqüe – Accessories –Agesbetween15-45
Likewise Zaramade a huge marketonapparelswiththese variousbrandswhichare ownedbyitself.
All of these brandswere made inlocallyandservedtothe internationalmarket.But Zaraneedsto enter
to the international marketmore thaneverbecause of globalizationetc.

4. 1. Whichtheory is the best representative ofZara’s (Inditex’s) internationalization?
Whenwe talkabout the theoriesthatusedinenteringintoforeignmarkets,Zara’model isbest
suitsfor“Uppsala” model.
Whichmeansif some organizationiswillingtoenterthe foreign/international market,they
firstneedtotake much experience fromtheirdomestic/local marketthattheyhave beenestablished
with. Andthe otherthingisthat the organization,whichishopingtobe ininternational market,it
shouldstartit fromnearestcountriesandaftera sometime,itcango fora far countries.
Hence Zara started its internationalmarketwiththe firstinternational store inOporto,Portugal,
Zara acquirednewknowledgeandexperience thathow tobehave oninternationalmarketaccordingto
newcultures/traditions. Therefore,the bestpractical strategy/theory forZara’s international
marketingis,Uppsalamodel.
2. Please evaluate the competitive strategy of the three world market leaders. Whichof the
three will be the future winnerwith regard to global retailingin the fashion world?
Accordingto thisdescription/case study,there are three worldmarketleadersinapparel
industry.Theyare,
 Zara
 Gap Inc.
 H&M
Andtheyhave theirownunique competitivestrategiestobe the topof apparel marketing/
industry.Let’stake one byone to describe whattheyhave andnot
 Zara –
Zara had a unique competitive advantagethatknowingwhatcustomerswant,notwhat
customersshouldbuy.
AlthoughZarahas a varietyof productsthat focusedonvarietyof age societies.
Zara got lesstime tomanufacture a productwhile othercompetitorstake 3timesof it.
 Gap Inc. –
Gap Inc. was an Americanclothingretailerthatisbasedon San Francisco,USA.
Its majorcompetitive advantagewasithasfive primarybrandsthatis usedinapparel marketing
/ industryas:
 Gap Banner.
 Banana Republic.
 Oldnavy.
 Piperlime.
 Athleta

5.  H&M –
Thiscompanywas establishedin1947 andthe majoruniquenessonthiswasitonlysoldwomen
clothesandaftersome time ittook advantage of sellingmen’sclothes.
Major competitive advantageof thiscompanyH&Mwas itsextensive networkthatbasedonthe
majorityof fashionablecountries.
3. What are the advantages and disadvantages of Zara’s (Inditex’s) multi-brandstore strategy?
Hence there are 7 brandsthat is derivedbyZara,there can be many benefits,conflicts
of havingvariousbrands.
Some of advantagesare –
 Age basedbrandswill dobetterwhenthere isahuge societyas customers.
 Can earnmore profitwiththe helpof reputation.
 Can earnmore salesoccasionally
Some of disadvantagesare –
 Cost will be higher:
o Whenhavingmulti brandsundera mainbrand,that subbrands shoulduse
some new / variousmaterialsratherthanusingZara’s.Therefore the production
cost will be higher
o Whenhavingmulti brands,theycan’tdistribute asZara.Because customers
shouldn’tknowthatthose are fromZara, if theygot to know the demandfor
the otherbrands will be gettinglower.
o Promotioncostwill be higheraccordingtothe variousbrands.
 Riskwill be higher.
o Whenintroducingvariousbrands,itwill take muchtime tocreate a new
customerbase,soin firstdaysthe demandand saleswill be lower.
o Targetingage base will dobetterif there isa good society.

6. 4. How successful do you think Zara has beenin meetingthe ‘risk of cannibalization’as a
consequence ofthe multi-brandstrategy?
Withthe multi-brandstrategy,cannibalizationwill occurwithZarabrands.
Cannibalizationmeanswhensome producerintroducesnew product,the decrease of profit/saleson
olderproductsgetshigher.Withthe multi-brandstrategy,Once Zaraintroducesanew productto the
marketfroma differentbrand,the olderdemandonolderproductsmaygetlower.ButZara has dealed
withit.But how?
WhenZara introducesa newproduct,itfocusesona specificage group. So olderproduct’s
reputation/demandwill notbe muchlower.Thereforethe “Riskof cannibalization”hasbeenmanaged
by Zara evenitintroducesnewproductstothe same store.
5. What are the advantages and disadvantagesof going into a joint venture with Tata inIndia?
In 2009, Zara has decidedtomake a jointventure withalargestmanufacturerinIndia,TATA.
Due to the willingnessof Zarato be more international,thisagreementhelpsZaraand TATA
bothpartiesto gaina newbigmarketshare.
As otherdeals,thisalsomakessome advantagesanddisadvantagesonthe company.Let’stake some
time to see whatthe advantagesthatwill have onZara are.
 As the part of thisdeal,Zara will have 51% of control while TATA hasonly49%. Thiswill helps
Zara to take decisionsmore easily.
 Withthe helpof TATA,Zara can earn more popularityof salesandmarket.
 Zara will surelymake some large profitbecauseIndiaisthe secondlargestpopulatedcountryof
the world.
Like advantages,there are some disadvantagesalsolike:
 Usinga jointventure makesthe Zaramore open,whichmeanstheirsecretsof marketingand/
or sales,productionsbecome more opentothe otherparties.
 Most part of India’ssocietyislike tobe traditional,whichmeanseventhoughIndiahas alarger
population,fashionablepeople amongthemare aloweramount.
 Can’tsell modernwearslike bikinis,shorts,pantsinIndiabecause of theirtraditional opinions.
 Rulesandregulationsof governmentare higherthanothercountries.
 Indiagivestop place to theirownproductstherefore Zarahasa bigchallenge of sellingtheir
productsin India.

7. Confirmation Certificate
Congratulations!
You have successfully completed the Library Plagiarism Quiz.
Student Name: Wiratunga S.L.D.
Student Number: 13206122
Date: 04/08/2014
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PLAGIARISM QUIZ
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