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•The risk of trying to predict fashion trend a year in advanced

–Zara updating its  new design and stocks every two weeks

–Unlike Gap, Abercrombie, H&M

-Track a new trend

-New markets entrance

1975-2004

•Strategy

–Through using centralized distribution system that minimises the lead-time of their goods.

–They can make decisions in a very coordinated mannaer

–Solid distribution network

•The centralised logistics model might cause Zara to suffer from diseconomies of scale.

–This system may work well with the existing number of stores because majority of which are centralised in Europe.

–ZARA will not be benefiting from short lead times and low operational cost with a single central distribution centre model as they branch off into other countries.

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Q1: How has the firm’s international strategy evolved since inception?

supply chain management, online shopping

Q2: Using the strategy your group is examining, determine how and when it has been applied in the different country markets?

Similar store layout and products designs, packaging, pricing, distribution, standardized supply chain management. Zara has maintained the same brand identity through imagery, product range, and its “no advertising and promotion” practice.

Q3: To what extent is this a sustainable strategy for the company?

a global market leader in affordable fashion, globally-recognised brand
Zara employs a highly-efficient Just in Time manufacturing model. garments are picked, packed and ready to leave its distribution centre in Arteixo, Spain, approximately eight-hours after a store manager places an order.
ZARA produces every product in small quantities. each of its 2,000 stores receives new items eight times a month. Always follow and adapt to the market trend.

Q4: What would be the next step required to make this firm truly international?

promote global online shopping, Right now, Zara centralises its textile factories and main logistics centres in Europe. For it to be truly international, it can set-up logistic centre in Far-East.

Q5: In what ways are the target markets major opportunities for the firm?

China - huge young population, big market size, fashion sense, purchasing power

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Evolving strategy:
- Multi brand strategy --> attack all target markets

Different countries
- Less winter collection in Asia, such as Indonesia and India (High responsiveness)
- More floral pattern in India  (High responsiveness)
Conclude: It specialized/research on the target market from a country  --> Makes it sustainable strategy

Sustainable:
- Well known knowledge about the target market of a country.
- Imitate luxury design using creative team with a affordable price (current strategy and high cost reduction).

Make it more successful:
- Focus on lower prices because of the high competition

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Zahra's International, Global, MultiDomestic and Transnational Strategies

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Oreos in China (Example of Product Adaptation Strategy in Global Marketing)

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International
Strategy - Limited Local Responsiveness

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International
Strategy - Limited Local Responsiveness

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–Centralize product development and control functions at home

–Transfer manufacturing and marketing  functions abroad

–Limit customization of product offering and market strategy

Red Bull - Gives You Wings
-Targeting young people, mainly the Y-generation and Sport people -that would enhance concentration.
-Red Bull has only one main product, which is the Red Bull energy drink and recently they introduced the new Red Bull energy drink 'sugar-free'.
-It's use of a global strategy with out developing economies of scale have resulted in success.
-Major Opportunity:Wending Machines
-Its sales to more than 100 countries. Red bull is now going into the developing markets such as India. It also has a strong distribution deal with Mount Shivalik and Narang Hospitality Services in order to manage and distribute its logistics of the drink
BMW
-Targeting high class customers.
-Has several series as 1,2,3,4,5,6,7,X,Z,M,I

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Definition: The transnational strategy tries to simultaneously, achieve low costs through location economies, economies of scale, and learning effects; differentiate the product offering across geographic markets to account for local differences; foster a multidirectional flow of skills between different subsidiaries in the firm’s global network of operations. The transnational strategy makes sense when: cost pressures are intense pressures for local responsiveness is intense. (Teck 2009)

Teck, T (2009) International Business Strategy ~ Global standardization, Localization, Transnational, International Strategy [Online] available from <http://www.publishresearch.com/download/151>

Examples:
McDonald's: beef burgers
Sky:
Unilever:
whitening products and tanning products
Oreos in China (Example of Product Adaptation Strategy in Global Marketing)
https://www.youtube.com/watch?v=U48nmKPJclA

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Definition: A company is focusing on high cost reduction, while there is a low local responsiveness.

Effectively: For the Global standardization strategy products the strategy is working very well. Market share in camera market is 11%, number four of the whole market.

However, we can conclude that most products of Samsung are changing for specific countries. For example the samsung mobile phone. In Arabic countries the mobile phones of Samsung has two simcards.

Markets of Samsung:

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Some examples of multi domestic corporations are :
-McDonalds
-Wal-Mart
-Starbucks
-Coca-Cola
-Heinz

A multidomestic company uses a unique marketing and sales approach for each of the markets in which it operates. The company chooses its markets more carefully for individual products and then focuses on those products in those areas so the company can maximize its competitive advantage.

The company tends to be more decentralized-enabling the management in each country to operate with some degree of autonomy so management can adopt business practices more appropriate to the local economy. Multidomestic companies tend to be more flexible and more capable of adjustment. Smaller, technology-based companies can compete with the corporate behemoths for multidomestic sales.

-McDonalds entered France and India using Multi-Domestic strategy by localising their products to suit the country taste.

-Starbucks using products localising strategy in Japan's market by introducing Green Tea Latte, and also introduced it into US market.

- Similarly, food company H. J. Heinz adapts its products to match local preferences. Because some Indians will not eat garlic and onion, for example, Heinz offers them a version of its signature ketchup that does not include these two ingredients.