Application of relevant theories/ concepts and principles of Global Strategic Management
There are many successful organizations which find that their domestic are saturated or the foreign markets will offer better opportunities for both profitability as well as growth to them (Harrison and St. John, 2010) which might not be achievable in the domestic markets. This is what even Zara believes and that is why many forces are leading this fashion giant to enter the international arena
The trend of global strategic management helps in offering many new management challenges to the firms. The strategic management process model should be based upon a Combined Approach. The firm planning expansion to the global markets should adapt to the external forces because it is very unreasonable to expect them to change and should be proactive in other areas.
Moreover a successful strategic planning can emerge from a successful planning process , drawing inspirations from the organisational learning and through trial and error or through a combination approach (Barney, 1991).For the internal analysis the resource-based view is very vital and focal and which helps in developing and gaining competitive advantages . While the Stakeholder Theory is helpful in drawing the conclusions from the analysis of external environment.
The resources-based perspective does not clash with the stakeholder perspective in the long run. But the fact is that the two perspectives are found to be complimentary to each other in any organisation (Lado et al., 2006). The reason being in every organisation for acquiring their resources they depends upon their stakeholders to acquire as well as develop the resources. Therefore it implies that for any organisation to be successful it should have good working relationship with its stakeholders and these strong relationships will in turn help in gaining competitive advantages (Helfat and Peteraf, 2003).
Zara completely denies the concept of cheap outsourcing and the main manufacturing activities of Zara are being conducted in Spain. This proves to be a real god approach towards owning their own work force and this in turn helps in avoiding from getting involved in activities which might turn out to be unethical. The image of Zara is very clear and untarnished with its quality management processes, so the time is right for Zara to unleash new domains. It is highly not recommended for Zara to outsource its activities; like assembly or manufacturing which might cause confusions and starts questioning the quality management processes currently applicable in Zara. A health internationalisation process should be developed neither questions the employee relationship management nor the quality management at Zara.
Another better option which Zara can follow is to become eco-friendly organizations which will help it in achieving good sales-points. The eco-efficient and friendly certificates gained by Inditex, like the major one LEED (Leadership in Energy and Environmental Design) can be put forth to attract customers. Mentioning this LEED certificate accomplishment in the mission statement and also following it will definitely give Zara a competitive edge it is looking for (Murphy, 2008).
The Fast fashion trend introduced by Zara through new styles helps it in moving parallel to the current market trends. The PDA’s used by the sales force in the stores help in fast communication and transferring information to “ The Cube” which helps in responding to the market trends in two weeks time . The excellent team of designers which includes 300 stylists collect all the information and feedbacks form the stores directly which are analysed and propose new designs (How Zara Fashions its Supply Chain, Strategic Direction, 2005). This takes less than ten days to reach markets and the customers feel elated to see their ideas realised into practical products. The ideas are not present in the form of sketches before three weeks of their production (Folpe, 2000). Where other companies take at least 6 months time to convert an idea into realisation, Zara gains competitive advantage over here.
The corporate identity of Zara can also be used to get good market response for Zara. It has been defined as the set of meaning through which any object lets itself known in the market and through these set it lets people recognise, remember, relate and describe itself (van Rekom, 1997). Therefore a better brand image in the market will ensure Zara survival as well as sustainability in the international markets. Establishment of consistent identity of the retailing organization is very beneficial in gaining competitive differentiation (Burghausen and Fan, 2002) (Kennedy, 1977). Well communicated as well as well established corporate identity helps the organization in establishing emotional ties and producing numerous loyal and trustworthy customers (Balmer and Gray, 2003). Thus what Zara needs is string corporate image which is well communicated and emphasised along with better marketing so that its gets desired expansion results in the global markets.
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