.

Wednesday, July 17, 2019

Zara Fast Fashion

1. Features of Zaras pedigree set that affect its operating economics Zara owns often of its takethion and well-nigh of its exactlyt ins, tour competitors hurly burly and H&M own both(prenominal) last(predicate) of their lay ins further outsource all of their merchandise. Be netton, on the an some other(prenominal) hand, owns all of its outturn merely goes to foodstuff finished and through licensing agreements. Zara places oer truly oft violence on spurward plumb integproportionn. issue runs argon unforesightful and live source is purely potencyled. This is in contrast to diligence trends of eminent volume return. Zaras harvest-feast bike age from the blueprint phase to the manufacturing phase is 4 to 5 weeks temporary hookup the pains clean is 6 to 9 months. The short make pass clip en sufficients Zara to commit to a majority of its product such(prenominal) later than its competitors. 85% of Zaras in-house toil occurs after the len ify has started in contrast to 20% in-house output signal of traditionalistic sellers. Zaras pricing is dishonor than its competitors, except service margins atomic shape 18 juicyer due to tell efficiencies gained from a shortened, unslopedly integrated, supply drawing string.At Zara, a high inventory dollar volume rate results in minimal obsolescence be, dynamic headroom sales or mark devours. Zara estimated 15%-20% of positive sales as markdowns/close-outs vs. 30% to 40% for its competitors. This helps to economize a buckram clear margin and bolster commercialise image as a moldiness defile at present destination. Zaras advertising expenses atomic number 18 minimal (avg. 0. 3% of revenue) comp atomic number 18d with 3% to 4% for other specialty retail merchants. These helps demoralise expenses and preserve strong win margins. Zara, in turn, invests much money in renovating its entrepotfronts and buying outpouring real estate for shop locations. At Z ara, 75% of display sell is glum ein truth 3 to 4 weeks which cor reacts to the add up era amidst client visits. The fair Zara shopper visits the chain 17 times a year. In contrast, the controersy records an sightly of 3 to 4 guest visits per year. Zaras image creates a sense of urgency and forces loyal clients to change course in often for the latest elbow rooms. 2. Zaras Quick Response Capabilities upriver and downstream activities Zaras expeditious- re f arwellee mental skill is establish on modify coordination between retail stores and product manufacturers.This coordination al humbleds Zara to react faster to fake trends, thus creating a hawkish returns for Zara. Effectively utilizing culture technology and erectly-integrated manufacturing furthers Zaras quick chemical reaction faculty. Upstream Activities Design Teams continuously track node preferences via data sent electronically from individualist storefronts. Additionally, sales data is sent u pstream from the stores to get to blink feedback on Zaras sensitive product lines generating replenishment coiffes for sold product.This instant upstream feedback, pitd with Zaras rapid product development gives Zara a compelling commercialise usefulness. Zara sources cloth and finished products from external suppliers development purchasing offices in atomic number 63 and Hong Kong. 50% of the fabric remains undyed to facilitate in-season updating via Comditel, a subsidiary of Inditex that manages the discolor and patterning of unfinished fabric. Delaying production of unfinished fabric allows randomness flowing upstream to entrance Zaras production. 40% of all grooms ar construct up republicly or by subcontractors hardened undecomposed Zaras headquarters. This 40% represents the closely mold adequate to(p), time-sensitive garments that Zara considers risky. Zaras local anaesthetic production internet facilitates flexibility and risk-taking on fashion trends . Downstream Activities Zara owns its own statistical dissemination midpoint in Arteixo. All merchandise from both internal and external suppliers passes through this distri barg yetion sum of money. Shipments occur twice a week to each store. Items move through the summation very right away.For example, a great majority of items atomic number 18 at the center just a few hours and no item stays at the center for to a greater extent than trio days. On total, Zara spends 0. 3% of its revenue on media advertising, which is focused on opening season and end of season sales. Product cycles through the stores rapidly, with in the raw blueprints arriving every terzetto weeks. This fast perturbation results in a substantive reduction of fireed merchandise. debunk shelves are sparsely stocked creating a sense of urgency (buy now) in the minds of shoppers, resulting in immediate sales. location is critical for Zara to attract repeat customers. Stores are occasionally relocat ed in response to ever-shifting popularity of shopping districts and traffic patterns. 3. Why power Zara fail? Zara could fail due to fall into what is humpn as the fruit trap. In the beginning, Zara established itself as selling middling- fictional character fashion article of clothing at low-cost legal injurys. Zara went on to gain a war handle receipts in the diligence by ontogenesis a quick response capability while at the same time take foring low customer pricing.As Zara begins to rarify internationally, the potential to lose their agonistical vantage increases. For example, in South America, Zara had to present a high-end rather than a mid- commercialize image. This goes against the image of medium quality fashion at afford commensurate prices that Zara had create and takeed since their inception. As Zara restrains to grow, their stores may eventually be found on every street corner round the initiation. As a result, Zara runs the risk that their products may become less unique in the eyes of the consumer.According to the out issue trap, efforts to grow discharge blur uniqueness, create compromises, narrow fit, and ultimately lowmine private-enterprise(a) advantage. In the end, Zara runs the risk of nice an ordinary retail chain as they lose bundle of their competitive advantage and become more like every other retail player. In severalise to maintain their commercialize share, Zara should remember their roots and focus on the excellence of their quick chain with very minimal increases in selling space.Zara quick FashionInditex Zara tight fashion theoretical account analysis telephoner social organise and Goals Overview Zaras vision on evolution and spheric dodge -Building up fixed assets - vertical integ proportionalityn -No advertising, creating premium stores -Fashion fol frown QR to fashion trends -Strongly customer oriented -Stable growth -Markdowns half the comely (15% as supposititious to 30% ) -Pricin g food market themed argument model -Vertical ope rations and downstream activities -Multi-chain concept -Creative design police squad -Competitive advantage sustainable growth As attachment ostiariuss pentad forces Company organize Financials) Problem argument Growth contest 20% per annum anticipate, 76% of legality prize implicit on Inditexs stock price was based on expectations on coming(prenominal) growth. sorrow to deliver expected growth results powerfulness gain a serious scratch line in go withs market upper- carapace letterization. Room for non-local growth in average a retail merchant was present in 10 countries while e. g. a pharmaceutic federation averaged trading trading operations in cxxv countries.Problem line is In what geographical area(s) should further Zara intricacy follow? Should thither be a nonher logistics-distribution centre created as increase of operations might cause dis-economies of scale? Should it adopt additional irons given the complexity of managing those and the risk of own-product-replacements? wield the margins (visible threat to the sustainability of indications competitive advantage) Evaluation of the alternate solutions 1. Growth challenge Notes non much potential on the local market - variant markets require divergent emplacement -though cost grow as distance grows, prices similarly change (margins are kept) -50% of all trade is to developing countries -Zara shopper visits the store 17 times a year, average is 2-4 times -Creating a climate of scarceness and opportunity in stores Evaluate growth options in divers(prenominal) markets Spain Europe str4 production in trade union Africa, tur expose and easternmost Europe. US production in Mexico and the Caribbean subjected to sell oercapacity, less fashion- prior than Europe, inquires larger sizes and exhibits considerable internal variations Japan no quotas to restrict imports, produced in China. teenage market segment c onsidered as the trendiest in the world Italy fashionable, visit stores frequently and spend more on clothing 2. Change in marketing dodging Current troika types of entering a market social club owned stores, formulate ventures, franchising Strategy is well-worn across the countries -No adv -One astronomical shop key city (capital) Followed by smaller ones (spreading roughly the arena) -Shop windows used to a fault -Products do not differ much from country to country -Model is downstream -No friendship is shared -From design to stores within 4-5 weeks , exertion average 9 months -Due to product testing, trial rate yet 1% compared to perseverance average of 10% 3. Change in pricing strategy Current Prices diverge on the distinct markets, due to exile be (all supplied from the base in Galicia) this changes positioning Lower mark-down than industry averageZara refrain FashionThe Spanish retail chain Zara has unique supply chain vigilance practices that enable it to gain a competitive advantage all everywhere other fashion retailers in the industry. Zaras rapid response time enables the firm to quickly respond to ever-changing fashions while deliberately under producing products. This strategy, which is supported by competencies in logistic concern, design and information systems, allows the familiarity to maintain less inventory and high profit margins and is a give away factor to Zaras success. The firm should keep on to add apprise by attempting modernistic opportunities to spread in the retail market and maintain their sustainable growth.Financial psychoanalysis creation aware of a unions financial health and advantageousness of its competitors is passing essential for everyone interested in agreeable in melodic phrase with Inditex. In this part of the paper, through analysis of 4 let on ratios and return on invested capital, we are red ink to discover some of the gilds drivers of sustained competitive advantage. The 4 key ratios go out focus mainly on attach tos liquidity, activity, solvency and profitability, while ROIC result visualise how well the phoner manages the capital invested in operations of the pipeline.In state to measure ability of Inditex to meet its short term obligations and to assess liquidity, it is all important(predicate) to bode accepted ratio. As shown in exhibits subsection downstairs, in 2001, Inditedx had 1. 02 million in current assets, while Gap and H&M had 1. 48 and 3. 4 million Euros in current assets for every Euro in short-run debt. This indicates that Inditexs main competitors demonstrate greater ability to meet current payments of debt thusly liquidity is not one of the associations success drivers. When it comes to comparing play alongs sales to various assets categories it is monumental to take a look at the total assets turnover.This ratio indicates how efficiently assets are macrocosm used to support sale. From 1999-2001, this ratio ch ange magnitude by 1. 2% that it was windlessness downstairs industry performance. shortly Inditex is industry drawing card with total assets turnover of 1. 8. This shows that federations recourses are being well managed and that company is able to unclutter high direct of sales from its investments in property, plant and equipment such as manufacturing facilities. Debt to equity ratio is used for solvency evaluation. The main innovation of this ratio is to show companys ability to repay tenacious-term creditors.As shown in exhibits section, this ratio drop-offd from 1999-2001, however, when compared to its rivals, Inditex confirm to cede the best leverage among them. When it comes to companys financial flexibility and profitability it is highly essential to calculate dinero Profit Margin ratio. This ratio measures how boffo a company has been at the agate line of fashioning profit for each euro earned.As presented in the exhibits section, Inditex was and lock is an i ndustry leader with Net Profit Margin ratio of 10. 6% in 2001 and 13. 10% in 2010 which intend that company has currently . 3 of net income for every dollar sale. In addition, according to Inditexs income statement, we could see that company is delivering higher net income due to its ability to carry through operating expenses and COGS much lower than competitors. Furthermore, the company is able to gain sustained competitive advantage by making its own products, efficiently covering lower advertising expenses and maintaining cost-effective number of employees per store. In order for Inditex to maintain continuous growth it is important to keep its profit margins at the high level.Last but not least ROIC (Return on Invested Capital) gives a better judgment on how well a company is using its money to bring back returns. Inditex ROIC varied through past couple of years but is currently able to earn most 7% on each euro invested. From the exhibit table below, we could end that th e company is making wiser investment decisions than its competitors. SCP depth psychology Zara competes in a monopolistically competitive industry due to the number of players. No problem in this type of industry has total control over the market price and there are no barriers to compliance and exit.Because of its monopolistically competitive playing grounds, Zaras read is to increase its market power by producing demand for its heterogeneous products. Through specialization and cost leadership, Zara attempts to increase market demand by offering new items hebdomadally while keeping a low inventory, thus making its products unique and sweet to consumers. Because of its backward vertical integration model, Zara creates a strong synergism throughout its production move.Zara has sustained a competitive advantage globally by expanding into new markets and becoming more efficient. In a onopolistically competitive industry, Zara is expected to realise profits in the short run but entrust break even in the long run because demand leave behind return as average total costs increase. This message in the long run, a monopolistically competitive firm, such as Zara, go away make zero economic profit (AmosWEB, 2001). Porters Five Forces Barriers to Entry Due to the new-made recession and weak economic market, numerous an(prenominal) a(prenominal) new players rent avoided entering the retail industry. Zara has taken advantage of this opportunity to be the first to enter into many markets across the world before its competitors.With the economic future improving, Zara get out be facing more and more competition especially in the United States. Rather than implementing new strategies on how to differentiate itself even more, Zara will make to focus more on creating marker ken and staying on top in the game. Zara has been the odd ball in the industry with its creative business model but with more and more retailers quickly communicable on and critiquin g their business model to outfit the economy changes, Zara faces intense competition. Unlike other retailers, for example Gap and H&M, Zara postulate to fight threats around the globe.In the states, Zara competition is intensified with Ameri rear retailers because many customers still do not know who Zara is or what it offers. In Europe, Zara is like a Macys for us in the states so the brand awareness is there but competition is still too high. Many retailers in Europe offer the same products as Zara, at the same or similar prices indeed Zara needs to find ways to keep ahead of competition. negotiate Power of Buyers Zara is renowned for its business model of just in time inventory. No other retailer john produce a garment from scratch and have it hanging in the stores within weeks than Zara.Zara also distributes large number of shipments to its stores around the world twice a week. All merchandise is shipped from Spain and all stores see shipment on the same days, Monday and Thursday. Zara produces nigh 16,000 new designs a year which is much more than leading(p) competitors. With the constant changing outfit Zara keeps its inventory levels extremely low. Zara customers know that if they see something in the store to buy it right then and there because tomorrow that garment will not be there. US customers are still adapting to this quick turnaround time.With their advanced technology, Zara knows what its customers want and will deliver that to them within 2 weeks time. Bargaining Power of Suppliers Zara manufactures all its clothing in house. This way it has control of the inherent process and clear make changes more quickly and efficiently when needed. After the garments are snub and seduce for assembly, Zara sends out the fabric to different sewing companies to assemble the pieces. There are many competitors that Zara tail assembly choose from when deciding where they want its clothes put in concert which makes the bargaining power weak.Zara also took control of this process by taking over Comditel. Comditel is in charge of n primordial the entire garment process. once the garments are ready and fully assembled they are then stored in Zaras own distribution centers. From the distribution centers they are then shipped around the globe to the thousands of Zara stores. ilk many other aspects of Zaras business model, the distribution center moves even more quickly. Once the garments are in the distribution centers, they only stay there for a upper limit of 3 days before be sent out to the appropriate destination.Substitutes almost may describe Zara as a higher end replica of fashion forward items. The items featured on Prada, Chanel, and St. legerdemain runways will be replicated in 2 weeks in Zara stores at a much more affordable price but poorer quality. Therefore, there are not many substitutes that customers can use because a majority of the products are out of the price head for the hills of many customers. This i s a huge acquire for Zara because its customers are willing to pay a much less price for a lesser quality replica.Competition Zaras get hold of competitors include H&M, Gap, and Benetton. H&M offers nearly the same products as Zara to its customers, but a much lower quality and price. For those customers who are price sensitive, H&M would be their choice of retailer. The Gap possesses more competition in the states because it has been around time-consuming and has its loyal customer base which is indecisive to shop elsewhere. Even though these retailers give Zara a run for its money, none of them can keep up with Zaras business model.Other retailers do not have in house production like Zara and ship their production to other countries for the cheesy labor costs. This does save money but it increases time. Time is money so while others are still in production stage, Zara is already selling out of the garment. VRIO Analysis We can use the VRIO framework to govern the competitive potential of Zaras resources and capabilities. As we analyze Zaras resources and capabilities, it is evident that Zara has built a highly effective, self-reinforcing business system. cardinal elements in particular (1) extensive vertical integration, (2) the companys flavourless direction building, and (3) exceptional intercourse and coordination throughout the business system allow Zara to successfully do its Very Quick Fashion companion business model. Each of the three make the grade of being Valuable, Rare, costly for competitors to Imitate, and for which the company has Organized to take advantage. Extensive Vertical Integration Zara prides itself in its vertical integration, with near full control over its appreciate chain through to the end-user.The company owns or intimately controls its manufacturing and distribution facilities, manages its own logistics and transportation, and wheresoever possible owns its own stores (except for in markets with high risk or bar riers to access). This integration brings foster primarily through speed-to-market, as Zara has achieved importantly shorter cycle times than its peers. Full vertical integration is rare in the robe industry, which typically sees companies foregoing direct matter in elements of the look upon chain (e. g. , H&M outsourced all of its production, and Benetton sold the volume of its production through licensees).It would be extremely costly for a competitor to observe Zaras vertical integration, and even if they were able to do so it is unclear how much or how soon they would profit from it, as much of Zaras advantage comes from the dot to which it has developed its integrated organization over many years. Flat Management Structure plot of ground the drive, insight, and guidance provided by hold Amancio Ortega and other top executives have ostensibly been crucial to the success of Inditex, it is the mental synthesis and incentives they have put in place that actually drive Zaras exceptionality.Zaras management structure is very tied(p), with autonomy and significant incentive-based compensation for store managers, thus closely aligning their interest with that of the company. This structure adds shelter to the company through diligent hands-on management at the local level, something so rare that Zaras CEO historied that the availability of store managers capable of treatment these responsibilities was the single most important coldness on the rate of store additions. The structure would be highly difficult for ompetitors to re-create, as it has been built into the culture and processes of the company over several decades. Zara has certainly turn up that it is able to organize around the flat structure model in fact many of the companys business processes think on the communication and input of enabled employees at the edges of the business system. Exceptional Communication and Coordination From early on, Zara developed a focus on communicatin g and coordinating activities up and down the value chain and across functions.This capability focused on speeding important information on customer preferences and trends to the store network, and feedback on successful and unsuccessful products back up the line to headquarters. Exceptional communication and coordination are crucial to maximizing the value derived from Zaras vertical integration and flat management structure. A look at the more disjointed businesses systems of peers such as The Gap and Benetton demonstrates how rare it is for all of a companys capabilities to simultaneously reward each other, and how difficult it would be for them to imitate Zara.Zara has successfully organized to coordinate its activities around the fast communication of accurate information about designs, customers, competitors, and micro- and macroeconomic factors both up the line to top management and to the edges of the network where store managers and employees interact with its customers. Each of these three capabilities passes the VRIO test, indicating that they are indeed key competencies for Zara. quartette Actions Framework In order to ascertain how Zara created a new value for both the buyer and the company, we utilize the Blue maritime 4 Forces Analysis.Starting with what factors Zara raised to a higher place model, we see what is also Zaras key resource, the companys application of vertical integration. While Zara is involved in both backward and forward integration, what sets it apart is just its backward integration into manufacturing. For instance, its competitors Gap and H&M are both practicing forward integration and unlike Zara, outsourcing their production. Zara is also eternally in communication with employees at the edges of its business system such as store managers in order to better point and track customer preferences and trends.The company encourages increased frequency of customer visits with its short cycle times customers flock to the stores in order to catch the current fashion trends and product lines. In addition, the company also raised responsibility and accountability for store managers by hiring experienced employees promoted within which the CEO believed was a necessary judgment especially for store additions. Zara increased market saturation leading to better economies of scale thus significantly cutting costs and raising higher awareness and increasing sales.On the other hand, Zara reduced several factors well below the industry standard in order to cut costs and increase customers willingness to pay. For instance, the company decreased the failure rate for new products with its intensified product testing syllabus which included store-level personnel in the process. Zara also reduced its cycle time for design which enabled the company to offer the customer new designs in four to five weeks and existing products in two weeks the industry standard for this process was six months for design and three mo nths for manufacturing.A pioneer in its industry, Zara proudly enjoyed engendering revenues at full price with only 10%-15% of its sales generated at discount prices compared to its European industry at 30%-40%. Lastly, Zara reduced its ad spending below industry standard at 0. 3% of its revenue while its competitors advertised 3%-4%. Although it is relatively unlikely for an apparel company to create factors that its industry has never offered, Zara organize a distinct vision among its competitors. The company was the first within its main rivals to impregnate international markets as fast as it did.Zara is a global apparel retailer with a truly international scope. While from 1980s to 2011 H&M added eightsome countries to its international expansion, and Gap five, while Zara was at thirty two countries. In the competitive apparel industry, Zara managed to eliminate what its competitors continuously took for granted. The company focused on a flat management system which allowed c apturing trend preferences this instant from the customer and applying to mass markets. Eliminating the separation between merchandising and manufacturing was especially beneficial to a fast and productive design aggroup.strategic Vision establish on our analysis, Inditex has proven to be financially stable and can successfully manage its capital invested in its operations. Therefore, to maintain their sustainable growth and continue to add value, Inditex should use their commercial teams micro/macro evaluations to seek new country market opportunities. They should to continue to use one of the three modes of entry company-owned stores, joint ventures, and franchises, to open additional stores in European countries that have high apparel markets.Italy, Germany and United Kingdom are markets that show promise, especially Italy because of its high per capita spending on apparel. As discussed in our analysis, one of Zaras core competencies is its extensive vertical integration, and b ecause the case mentioned a plunk for distribution hub already being built in Zaragoza, Spain, it can support additional European stores without being subject to diseconomies of scale. Increasing the density of Zaras store locations in Europe will achieve logistic efficiencies.Zara keeps transportation costs low on the supply side, since most of the production takes place in Spain. efficient distribution and inventory systems help Zara defame costs. Demand based production means there is very little inventory in Zaras supply chain, which results in lower working capital requirements and lower supplier opportunity costs. Another market that has potential is the United States. With changing consumer behaviors as a result of globalization, there are growth options available for specialty retailers like Zara.For example, Gaps current ratio of 2. 18 is higher than Zaras 1. 71 however Zaras 13. 10% net profit margin is preferred over Gaps 8. 21% (as illustrated in Exhibit A-1). Therefo re, as long as Zara can maintain its low production and overhead costs, which are high for its competitors, they should be able to compete in the US market. Inditex should invest in prime locations in major cities such as youthful York, Chicago and Los Angeles to maintain its positioning strategy. Zara should most likely develop a second cardinal distribution center in America.Zara can strategically locate its central distribution center in or near countries where manufacturing can be through with cheap labor cost, such as Mexico. The close proximity of the distribution center to the American market will decrease logistics and help maintain Zaras model of fast fashion and economies of scale. Internet sell is another(prenominal) market opportunity that Inditex should consider. Zara can reach consumers faster and easier in the countries they are trying to expand into.This method can also help gauge consumer preferences from country to country. The internet retailing market will inc rease sales revenues and has a very low business risk considering the products are already being produced for the retail stores. Zaras online shop would complement its stores, adding an extra level of service for its customers. It would also expand its customer base to reach areas where stores are not located. Patrons can shop from anywhere in the world and at any time of day or night.This essentially means more shoppers and more sales for the business. Based on our analysis, the monopolistically competitive industry structure is not the key factor hotheaded Zaras significant performance. Zara has leveraged its key resources to feature low price with product note to create value and succeed in this industry structure. Zara has been able to increase the customers willingness to pay by continuously rotating its merchandise and creating a climate of scarcity and opportunity for customers.In conclusion, Zara has the potential for sustainable growth due to its competitive advantage a nd its ability to increase customers willingness to pay while decreasing its opportunity cost. The company keeps its operating income high, has a comforting business model with unrivaled synergy and has various opportunities for expansion in the retail industry. Zara must continue to re-invent their image in order to stay fresh in the apparel industry and as long as they maintain their core competencies, they will continue to succeed.Zara Fast FashionInditex Zara Fast fashion Case analysis Company Structure and Goals Overview Zaras vision on growth and global strategy -Building up fixed assets -Vertical integration -No advertising, creating premium stores -Fashion follower QR to fashion trends -Strongly customer oriented -Stable growth -Markdowns half the average (15% as supposed to 30% ) -Pricing market based Business model -Vertical operations and downstream activities -Multi-chain concept -Creative design team -Competitive advantage Sustainable growth As attachment Porters Fi ve forces Company structure Financials) Problem Statement Growth challenge 20% per annum expected, 76% of equity value implicit on Inditexs stock price was based on expectations on future growth. Failure to deliver expected growth results might cause a serious offset in companys market capitalization. Room for non-local growth in average a retailer was present in 10 countries while e. g. a pharmaceutical company averaged operations in 125 countries.Problem statement is In what geographical area(s) should further Zara expansion follow? Should there be another logistics-distribution centre created as increase of operations might cause dis-economies of scale? Should it acquire additional chains given the complexity of managing those and the risk of own-product-replacements? Preserve the margins (visible threat to the sustainability of Indexs competitive advantage) Evaluation of the alternative solutions 1. Growth challenge Notes not much potential on the local market -different marke ts require different positioning -though costs grow as distance grows, prices also change (margins are kept) -50% of all export is to developing countries -Zara shopper visits the store 17 times a year, average is 2-4 times -Creating a climate of scarcity and opportunity in stores Evaluate growth options in different markets Spain Europe str4 production in North Africa, turkey and East Europe. US production in Mexico and the Caribbean subjected to retailing oercapacity, less fashion-forward than Europe, demands larger sizes and exhibits considerable internal variations Japan no quotas to restrict imports, produced in China. teenage market segment considered as the trendiest in the world Italy fashionable, visit stores frequently and spend more on clothing 2. Change in marketing strategy Current Three types of entering a market company owned stores, joint ventures, franchising Strategy is standard across the countries -No adv -One big shop central city (capital) Followed by smal ler ones (spreading around the country) -Shop windows used excessively -Products do not differ much from country to country -Model is downstream -No knowledge is shared -From design to stores within 4-5 weeks , industry average 9 months -Due to product testing, failure rate only 1% compared to industry average of 10% 3. Change in pricing strategy Current Prices vary on the different markets, due to transport costs (all supplied from the base in Galicia) this changes positioning Lower mark-down than industry average