multinational company ZARA Fashion Retail Company:

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Multinational Company: A Case Study of ZARA Fashion Retail Company
The following is a case study of a multinational corporation, ZARA fashion retail company. An enterprise that operates in several countries is called a multinational company. It has its headquarters in one country where it is managed from and several other operations in other countries known as host countries. Their businesses outside the headquarters are by use of merger or subsidiaries. Multinational firms produce, invests, operates and markets their products across the world. Multinational companies engage in activities like manufacturing, exporting and importing in different countries. Generally, any business that derives a quarter of its earnings from operations outside of its countries of origin is considered a multinational corporation (“Which of Your Friends Needs to Learn This Term?” n.p).
ZARA is among the leading and most successful fashion retailers in the world. It operates in several countries across all continents with its headquarters in Spain. ZARA is the leading brand of the Inditex group, the biggest apparel retailer in the world. ZARA engages in clothing and accessories. ZARA produces clothes for both genders and children. It produces and supplies its products based on consumer trends. Its supply chain is highly responsive. Products are shipped twice a week to the stores. Once produced, products take between 10 to 15 days to reach the stores. This ensures that products are in the market as soon as a trend emerges.

ZARA also engages in home ware like tables, beds cutlery, glassware, and decorative items.
ZARA is a successful global fashion retailer and to maintain this, they always have to be flexible to handle the market forces and the ever-changing trends in the fashion industry. They must remain relevant to continue recording the big sales they do all over the world. To maintain economic competitiveness ZARA should upgrade its systems and this would, in turn, yield positive results. Tinsley and Ormsby (2010) argued that for internal operations, ZARA needed software. Its DOS-based point-of -sale (POS) should be scrapped and replaced with Intuit HP retail system. This would be convenient for store managers to control inventories and for customers in providing business insights. This method is efficient, reliable and adaptive. And flexible. With the use of technology and its unique business model ZARA has established itself as a leader in online retail, thus ZARA should always strive to upgrade its operations systems. It should replace its POS with a current operating system. ZARA should tactically open new stores in the U.S with a strategy to diversify; it should also consider opening distribution centers near the major markets. Entering the Asian market should also be a consideration. The market is becoming more aware of the trendy and fashionable western clothing.
The company should also consider the interests of the customers in order to maintain its market. ZARA should focus on customer service rather than volume sales. For example, in Korea, they do not offer customer services. ZARA should focus on improving customer services to be able to compete favorably in the Asian market which is very competitive. Customer service helps to gain insight into customers’ preferences and needs. The company should try to learn and understand the peculiar characteristics of local communities where they operate. As much as it is a global company, it is not wise to ignore the local content. Focusing on local content, the firm will be able to come up with the best-suited products for the customers in that place.
The two main competitors of ZARA are Gap Inc and H&M. ZARA has a clear-cut advantage over the two and is perceived superior. The entire production of ZARA is self-controlled, but Gap Inc. and H&M outsource their production. Its vertical integration approach helps ZARA to have a fast turnaround compared its main competitors. ZARA has a more global presence than its competitors.
ZARA uses a unique business model known as fast fashion. Deliveries are made twice a week to their stores around the world. It only takes 10 to 15 days for a product made in their headquarters to reach the stores. This is a fascinating pace. ZARA is organized in such a way that all products must pass through the headquarter even though they were made in Korea and will eventually be returned to a store in Korea for sale. This enables monitoring from the headquarters. They use technology such that once a product is sold in a store, that is detected from the headquarter and is replaced immediately. Technology is applied to the extent that customers can try clothes on a digital mirror without taking them off the shelves. These factors make ZARA have an upper-hand over their competitors.
ZARA display characteristics of a multinational enterprise. It produces a variety of products using their own technology and patent right and supplies these products all over the world. It is controlled by Spain which is its home country. All managerial decisions are made and communicated from the headquarters. In conclusion, ZARA is a leading multinational company with a potential to grow still.
Works Cited
“Which of Your Friends Needs to Learn This Term?”. BusinessDictionary.com. N.p., 2016. Web. 5 Dec. 2016.
Dillard Tinsley, PhD and PhD Joseph G. Ormsby. “How Coach, H-P, Zara, And Ford Profited from A Comprehensive Application of Market Orientation | Graziadio Business Review | Graziadio School Of Business And Management | Pepperdine University”. Gbr.pepperdine.edu. N.p., 2016. Web. 5 Dec. 2016.