Zara and Zara Homes market entry strategy in Saudi Arabia

Zara and Zara Homes

Brands of Inditex

Brand Portfolio of Inditex as Per 2006

Trade Policies of Saudi Arabia

Causative Agents of the Problem

Nature of Saudi Market

Reserved Approach

Target Market Of Zara And Zara Homes In Saudi Arabia

Women And Fashion Industry Of Saudi Arabia

Theocratic Approach

Saudi Flavor Of Fashion And European Approach

Alternative Approach To Invade Saudi Market Profitably

Implementation Of Alternative

Implications Of The Alternative

Zara and Zara Homes

The internationalization is a process whereby an organization extends its business activities and transactions across the border of its national origination to enhance its brand image and corporate standing. Owing to the importance of this phenomena Zara and Zara Homes have also adapted to the international environment to enhance the profitability by entering and invading new markets to sell the fashion apparels. The internationalization process of the Zara and Zara Homes is organized by an extremely well make and authentic strategy. Irrespective of the well designed marketing and new market invasion patterns Zara and Zara Homes faced immense challenges in executing there business activities in the Saudi market.

The internationalization of Zara and Zara Homes the two cash cows of the Inditex have raised and set the bars high for the adaptability of the organizations to go global and at the same time maintaining their themes. But the invasion of Zara and Zara Homes in Saudi Arabia was the real challenge where Inditex had to encounter a drastic social, political and theocratic pressure. The Saudi market is regarded a conservative market where adaptability for fashion and fads has a limited access.

The cumulative term that defines the effective working and global recognition of Zara and Zara homes is its effective vertical integration and the unique business model. The organization initially urged to maintain the socio- economic similarities and adapted ethnocentric approach of invading the new market but is now modifying its majors of invasion by entering the new markets on geocentric basis.

A number of strategies were used by Zara and Zara Homes so as to overcome the market entry barrier in Saudi Arabia and as a consequence the Zara and Zara homes has presently 11 outlets in Saudi Arabia since its first outlet in 1999.

Brand Portfolio of Inditex as Per 2006

The portfolio and the brand rating of each brand of Inditex is show in the table below. The table below is an exquisite description of the profitably each brand owns to Inditex.

Figure 2

Problem Statement

While glancing over the production, profitability and expansion strategies of Zara and Zara Homes the two basic considerations that may strike the sales and well being of the brand are primarily the expansion of the two brands across multi-cultural markets. This implies that the Spanish fashion brand is now expanding in the foreign markets regardless of the culture and tradititioanl differences. It seems as if globalization has paced the brand performance by leaps and bounds. But yet in order to invade the Saudi market the Zara as well as the Zara homes faced immense challenges depending on the nature of the Saudi market and the local fashion preferences of its people. The major problem discussed in the paper are focused on the problems faced by Zara and Zara Homes in the invading the Saudi market and in turn the entire United Kingdom.

As a matter of fact the major portions of the Inditex revenue are reinvested in Zara as it holds about 86% of the total sales internationally. For an international successful brand like Inditex it is really important to maintain the balance of its investment so that the firm does not decline with the decline or downfall of Zara only. The reason why there is an equal threat for Zara to shrink or decline in sales in chiefly due to the international marketing strategy the brand has utilized. While invading the Saudi market and other multi-cultural markets, Zara executed an ethnocentric business strategy rather that a geocentric one. This is one reason why the American apparel market that constitutes the 19.80% of the total apparel market has so far not been conducive for this fashion brand. In the same sequence due to the internationalization strategy of Zara and Zara homes in the Saudi market, the two prominent and leading brands faced immense challenges as disused followed by a set of alternatives and proposals to invade the Saudi market in a profitable manner.

Similarly while glancing at the business model of the Zara and Inditex, vertical integration is regarded as the core competence of the business as it ensures the quality and speed of the manufacturing new merchandise twice a week. Zara is therefore incurring huge costs and economies of scale are so far difficult to accomplish.

The precise problem statement is international marketing strategy of Zara along in the Saudi market and the reasons why the brand aced challenges in invading the Saudi market with a similar spark and passion as it did in other countries of Europe. Hence the evaluation of the different strategies used by Zara and Zara Homes to internationalize the Saudi market and how are these strategies contributed to the success of the organization in the Middle East and United Kingdom?

Trade Policies of Saudi Arabia

The basic reason why the trade policies of the Saudi Arabia are discussed before the challenges that Zara and Zara Homes faced in invading the Saudi market is basically to analyze and quantify the intensity of challenge that the two major Inditex brands faced in invading the market profitably. The basic attribute discussed here is about imports, exports and production of fashion apparels across the United Kingdom. It has been known for centuries that the customs and conservative culture of the Saudi Arabia the United Kingdom and Middle East at large is based on following and strict implementation of Sharriah. Sharriah refers to the implementation of the Islamic principles that renders the sovereignty to one God only, in the way of following sharriah the Muslim women are bound to cover themselves with unattractive clothing. So for a fast fashion brand like Zara and Zara homes it was really important to emphasis and minimizes the difference between the two extremes.

Keeping the fact and the country policies in mind