Strategies for International Business (First case : Zara (Inditex Groups…
Strategies for International Business
First case : Zara
Inditex Groups (21$ billion revenue in 2012)
Zara (Generate the bulk of total sales)
Zara Headquartered : La coruna
Design strategy : Change the collection each month / No spring and fall collections
Suppliers in : Spain (Main production) , Portugal, India, Turkey, Morocco & China
Marketing : - Company uses litlle advertising (0.3% of sales) or promotion - Zara propose fashion wears not expensive
Perspectives on strategy : Develop strategy to achieve greatness
Great by choice
The industry Organization (IO) Paradigm
To create value : Companies must develop value proposition
Cost leadership strategy : Produce Low-cost while giving quality to the consumer
Differentiation : A way to dismiss the competition
Global distribution of labor
European Union (6.5%)
Homeshoring : The act of relying on home-based staff to handle particular value activities that had
previously been offshored to overseas centers and performed by foreign workers.
Onshoring : The act of relocating a business process or work unit to a more productive, lower-cost
section of the home country.
: A company relocates a primary or support value activity to a different country. The offshored
activity can either remain within or go outside the formal boundaries of the company.
Re-Shoring : The opposite of offshoring; an organization repatriates the value activity from the foreign
location to a work site in the original country.
Nearshoring : A less-aggressive form of off shoring whereby the company transfers a value activity to
a neighboring or “near” country.
Global integration versus local responsiveness
Pressures for global integration
Globalization of markets
Efficiency Gains of Standardization
Pressures for local responsiveness
International strategy : International strategy creates value by transfering core competencies to units in foreign markets where rivals lack of competitive alternative.
3 types of international strategy