Zara SWOT Analysis – SWOT Analysis of Zara 2021

Are you searching for a new business opportunity with any clothing or retail company like Zara? So, obviously, you want to do the situational analysis of the firm.

Zara SWOT Analysis is an important technique to map out the present Strengths(S), Weaknesses(W), Opportunities(O), & Threats(T) of Zara is facing in its current business environment.

In this poll, I am going to mention the SWOT Analysis of Zara 2021 with all the requisite information for your new adventure with Zara.

About Zara:

The Inditex Group is the world’s biggest Spanish apparel retailer and its own brand Zara, which had initially started with the name “Zobra”. Zara stores have men’s and women’s clothing as well as children’s clothing

Parent Company Inditex
Company Name Zara
Logo Zara Logo
Industry Fashion Retailer
Founded 1975  in Spain
Founders
  • Amancio Ortega
  • Rosalía Mera
Headquarters
Arteixo (A Coruña), Spain
Number of locations
2,270 stores in 96 Countries
Area served
Worldwide
Key people
Amancio Ortega (chairman)
Products Clothing
Accessories
Shoes
Swimwear
Beauty
Revenue €19.5 million (2019)
ZARA SWOT Analysis
ZARA SWOT Analysis

Swot Analysis of Zara 2021

The Zara SWOT analysis 2021 specifies – the strengths of the business at which it is good at and what distinguishes it from its competitors, its weakness that stops the brand to perform well and should work more on it to improve.

It lists its opportunities that the brand can use to expand its market share and brand worth. It also throws light on the threat that has the potential to harm the company.

Zara’s Strengths

  • Zara follows a unique model and has incorporated the right balance between demand and supply to succeed in its business.
  • Zara launched the use of RFID technology in its stores in 2014. Zara makes use of various IT tools for information sharing in a better way and brings in greater flexibility.
  • An account of, having top fashion designers, Zara needs just one week to develop a new product and new designs are carefully selected and produced and get to stores.
  • Zara’s products are supplied based on consumer trends.
  • The retail network of the brand has increased in recent years. As of the year 2019, the number of retail stores is about 2270 and has reached about 96 markets.
  • Inditex is financing $3 billion in bolstering its online sales, to focus on developing an engaging online buying experience and integrating existing physical infrastructure, to generate a quarter of its revenue through online sales by 2022.
  • Apart from clothes, Zara also offers clothing, accessories, shoes, swimwear, beauty, and perfumes, handbags, etc.
  • The brand’s feasible prices and its reasonable designs are mainly targeted to the youth and there are heavy conversions in the stores.

Zara’s Weaknesses

  • This pandemic expedited Zara’s plans to limit the number of physical stores. Online sales supported Zara’s climb out of a huge drop in sales because of COVID-19-related reasons.
  • The company is trying to bring customers basis their requirements and likes, Instead of advertising and promoting its products to push more sales. Using this method, Zara has not promoted much and created a strong presence.
  • The Zara stores are less, in India and Malaysia compared to the stores in the UK, USA, Russia, China, Spain, etc. Zara needs to start more stores in many other markets.
  • Zara does not specialize in any one thing like shirts, pants, dresses, party wear, or whatever and it has everything for everyone for instance men, women, kids also. Sometimes, one of the reasons that a customer shifts to a competitor is when the competitor is focused on one thing.
  • High competition for Zara means limited market share and high brand switching. If one has any hit design then it would not reach the customer potential.
  • More powerful worker abrasion rate compared to the trade average.

SWOT Analysis ZARA

Zara’s Opportunities

  • To provide the best customer experience and customer service Zara can use virtual reality, AI, and many other similar technologies to convert shopping to a better experience using these latest technologies.
  • Definitely, Zara can take advantage of the online buying trend, not only in its own stores but also in other E-commerce stores as well thereby bringing a hike in sales.
  • Many people like to wear Zara’s clothing and accessories. Hence, the company needs to invest in the developing market potential of enduring markets.
  • It invests less in marketing, but investing more amount in marketing and having a proper marketing strategy in place could be good for the brand. 
  • According to the Sourcing General, more than 1/3rd of Millennials and Gen Z look for “sustainable” and “environment friendly” labels on clothes. So, Zara must listen and respond to this growing need.
  • Zara has a huge retail channel set up still not extended in some countries like India, Singapore, Malaysia, Thailand, and New Zealand. The company should venture into more markets to expand its growth.

Zara’s Threats

  • Nowadays, People are conscious of the impact of fashion on the environment and people. Thus, Zara would have to push towards making fast-fashion a sustainable business – economically and ecologically.
  • Zara is not the only single brand, which is known for its chic design. The H&M, Mango, Forever 21, Gucci, and Marks & Spencer, are also loved by clients for their designs. While it has a strong brand image, ZARA is facing intense competition from several brands.
  • In the first quarter of 2020, Inditex reported a decline in sales. Inditex’s report states the closure of 88% of its stores because of the Covid-19 lead as the central reason for the drop in sales.
  • Zara is dependent on the raw material to the fullest. But when there is an increase in the raw materials and labor cost, it would increase its operational cost as well. This would have a negative impact on its profit.
  • All over the world, political and legal regulations are implementing on various businesses that include the fashion industry as well.

Conclusion SWOT Analysis of Zara

Thanks for reading my post, I hope you like my post. I am sure that, It will surely help you for starting your new adventure in your career. 

In light of the above mentioned all details about the SWOT Analysis of Zara, which framework helps an organization to identify its internal and external factors.

All the best, for your new venture and I hope you will succeed…

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