Owned by Inditex, Zara is a renowned fashion apparel company for its intelligent advertising approach and customer loyalty. But that’s not it. Over the years, the brand has repeatedly faced scandals, financial restraints, and controversies.
So, how has Zara still survived against giants like Adidas? To understand this, you must have a thorough knowledge of its strengths, weaknesses, improvement areas, and struggles. And here is a quick visual SWOT analysis of Zara to help you with this.
In this article
Overview of Zara
| Industry | Retail |
| Founded | 1975 (A Coruna, Spain) |
| Headquarters | Arteixo, Spain |
| Annual Revenue | €38.6 billion (FY2024) |
| Key Products | Clothing, Apparel, Fast Fashion |
| Market Cap | Inditex Valuation, $153.67 billion |
| Latest Growth | 7.5% (FY2024) |
| Official Website | Zara |
SWOT Analysis of Zara
Inditex, a multinational clothing company, owns Zara, which has become a fast fashion giant. This clothing brand has combined an unusual design approach with limited inventory and less advertising. But, how does this model ensure high customer appeal, better flexibility, and significant presence? Let’s find out with this SWOT analysis of Zara.
Zara Strengths
- Fashionable clothing: Zara employs a team of over 700 designers to transform concepts into trendy designs. From business to casual wear, Zara’s street fashion is distinct and comes in limited editions. This also improves their customer appeal.
- Global reach: Zara, with over 2000 stores across 96 countries, is no longer restricted by geography. You can find its outlets across the world - New York, Bombay, Tokyo, and more.
- Brand valuation: Inditex, the brand that owns Zara, currently stands at $153.67 billion USD. This higher valuation has given it the status of the 53rd biggest company in design and business.
- Faster and efficient production: Zara releases a new collection every two weeks, including as many as 500 different designs. Plus, the limited quantities per design make for higher exclusivity, which is favorable for customer appeal.
- Affordable prices: Zara intentionally uses regional vendors to produce the majority of its goods and locates stores in high-traffic, fashion-forward areas to keep its operational costs low. This strategy has helped them ensure quality at affordable rates.
- Spacious stores: Zara has intentionally placed its outlets in high-traffic areas with spacious layouts for customer convenience. Having a smooth and relaxing shopping experience is enough to visit a store next time.
- Visual merchandising: In spite of advertising online, Zara puts its resources into visual merchandising. From deciding the right colors to appealing layouts, mannequin placements, and everything is carefully curated to attract customers.
- Sustainable manufacturing: Zara has gained a reputation as an eco-conscious brand. It guarantees a toxic-free production and strongly supports campaigns for the preservation of our natural resources.
Zara Weaknesses
- Inadequate supply chain: Despite having 2000 outlets globally, Zara relies on its production facilities for retail store items. Such a strategy can cause the brand delivery delays, unsatisfied customers, administrative issues, and more. Hence, replacing it with regional production might prove better.
- Limited advertising: Unlike other clothing brands that spend millions on print and TV ads, Zara relies mostly on social media and word of mouth for its advertising and promotion. Though working well, this strategy can eventually limit the room to grow, with little attention to reach new, unfamiliar audiences.
- Insufficient product information: Despite attracting a lot of sales, Nike also has many returned products, owing to the insufficient product information. Hence, it seems like the buyers are not sure about what they are buying.
Zara Opportunities
- Wider global reach: There are still many parts of the world without a Zara store. If the fashion brand is able to harness these untapped markets, it will be able to increase its sales tremendously.
- Online channels: More customers are now buying clothes from online stores. Zara can maximize this market potential by improving its online presence and building a more efficient e-commerce marketing strategy.
- Trademark designs: Having a distinct design has helped many brands develop a strong reputation and longevity in the market. Think of Prada handbags or Lacoste polo shirts. Zara might have some impressive collections, but having a signature style can help boost its recognition and value.
Zara Threats
- Fast fashion competition: A few years ago, Zara was basically dominating the fast fashion scene. But that has changed now. Today, giants like Shein, H&M, Mango, and Forever 21 are ruling the industry. Upgrading its online game and communication channels might help the company overcome competition in the near future.
- Imitations: Like many popular brands, Zara also has to deal with cheap imitations in the market. While a few loyal customers can tell the difference, others can not, which significantly affects the sales and revenue.
- COVID-19 pandemic: The world took a toll during the pandemic, and Zara was not any different. It shut down around 88% of its stores in 2020, which impacted 44% of its revenue, compared to 2019.
How to Make a SWOT Analysis of Zara using EdrawMind?
While most people confuse it with any other chart, making a SWOT analysis diagram demands skills, collaboration, scope, and a resourceful toolkit. But worry not. Advanced software like EdrawMind simplifies its creation process with its preset structures and design assistance. Here is how you can use this tool to replicate a SWOT analysis of Zara.
Step 01: Gather Your Team
The first step of analyzing the SWOT of a business is getting input from the entire team. For this, you need an interactive software like EdrawMind. Its canvas space allows for real-time collaboration, meaning that multiple users can make edits simultaneously. Here is how it goes.
- Install the EdrawMind desktop app or try its online version.
- Log in to your Wondershare account or register if it is your first time.
- Open a Blank Mind Map Canvas from the top-right Create button.
- Once on the editing panel, click Share from the quick-access toolbar.
- Enable the Multi-Person Collaborative Editing Mode from the pop-up menu.
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Step 02: Brainstorm and List Factors
Once everyone is here, proceed and gather ideas. Make four lists on the canvas (strengths, weaknesses, opportunities, and threats) and start writing your factors. Encourage open discussion and add everything you can. For this,
- Double-click the Main Idea box and type your diagram title, i.e., SWOT Analysis of Zara.
- Select this box and plot four Sub-Topics from the menu.
- Name these sub-topics: Strengths, Weaknesses, Opportunities, and Threats.
- Further extend them from the on-screen menu or from the Start tab.
- Keep adding ideas until you have gotten input from everyone.
Step 03: Filter Out Ideas
You must have enough factors to incorporate in the diagram, but not all of them need to be on the SWOT diagram. So, it’s time to filter out ideas.
- Again, go back to each of these ideas and evaluate whether it is your company’s core strength or weakness.
- If not, delete it from the list.
- It is better to limit each of the four lists to 3-5 points.
Step 04: Switch to a SWOT Matrix
Once you have all the desired points, you can decide to keep it in a mind map structure. Or, transform it into a SWOT matrix. Here is how you can do it.
- Simply select the Main Idea box and change the Layout from the on-screen menu to Matrix Chart.
Step 05: Visualize Your SWOT Analysis in a Kanban Board
Alternatively, you can also plot it on the Kanban board. For this,
- Switch to the Kanban Board from the top left of the canvas.
- This will automatically turn your SWOT matrix into a kanban board.
Step 06: Color-Code Categories
Whether in a matrix or kanban board, clarity is the prerequisite for the SWOT analysis chart. It helps you differentiate between internal and external factors. For this,
- Go to the Page Layout from the top menu.
- Click Themes > Customize Theme > Create Theme.
- Choose multiple design elements like colors, fills, font details, etc.
- You can choose to save this theme for future use as well.
Step 07: Download and Save
Satisfied with the outcome? If yes, then proceed to download the diagram in whatever format you like.
- Click the Export icon from the top-left File menu and select your desired format.
- MS Office (Word, PPT, Excel).
- PDF for documentation.
- Graphics (PNG, JPG, JPEG, etc).
- Alternatively, click the Save button to download the Emmx version of the diagram. This will help you make updates in the future.
Use a Professional SWOT Analysis Maker
Most people undermine the importance of collaboration in designing a SWOT analysis diagram and choose whichever canvas they are able to find. This approach is totally wrong. Instead, you need an advanced toolkit that allows for group discussions, brainstorming, and drawing.
Here comes EdrawMind. It is a professional SWOT analysis maker with a mind mapping mode that lets your team consider all crucial details about the company. You also get a smart chat assistant with EdrawMind to answer your questions, carry out research, and more.
Here is why it might be a better choice for making SWOT analysis diagrams.
- Preset diagram structures, including mind maps, matrix grids, tree maps, and more.
- An extensive collection of editable templates for a variety of diagrams.
- Multiple format support for export and import.
- A collection of AI tools for research, mind map generation, summaries, and document analysis.
- Four working modes for note-taking, brainstorming, slideshow, and kanban boards.
6 Practical Tips to Make an Effective SWOT Analysis Diagram
A well-put SWOT analysis diagram is readable, organized, and actionable. Here are a few things you can do to perfect this diagram in minutes.
- Never underestimate brainstorming: While most people jump directly into plotting the SWOT, brainstorming is significant. It helps you filter ideas, remove unnecessary information, and declutter your diagram.
- A 2x2 grid is a good place to start: Just starting out with SWOT diagrams? Do not make the process complicated for yourself and opt for the standard 2-by-2 grid. You can never make any mistake with this structure.
- Color-code categories for clarity: An average SWOT analysis diagram has internal (strengths and weaknesses) and external (opportunities and threats) elements. Hence, to differentiate them for the audience, color-coding is an excellent technique.
- Be specific: Do not make your SWOT diagram wordy. Use bullet points and key phrases. Also, there is no need to add everything about your brand. Rather, focusing on critical points (3-5) in each quadrant is more than enough.
- Visual aids can save you: Visual cues, like graphs, icons, and pictographs, can help your audience register the information better. You can also use arrows to illustrate relationships between the four quadrants for maximum clarity.
- Leave room for updates: Always remember that SWOT elements keep changing, as the company evolves and tackles challenges. Hence, it is a good idea to use a digital canvas. It helps you conveniently make changes over time.
FAQs
FAQ
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Who is Zara’s target market?
Zara’s target market is people between the ages of 18 and 40, with medium-range incomes. These consumers are in search of trendy, high-fashion outfits for their routine use, while staying in their budget. -
What are some of Zara’s weaknesses?
Some of Zara’s weaknesses include inadequate fast-fashion supply chains, a limited advertising approach on online channels, and a lack of proper product information. These challenges are mainly a result of their fast production and a former marketing strategy, which needs to be revised. -
What are 4 SWOT matrices?
The four matrices in SWOT stand for strengths, weaknesses, opportunities, and threats. These elements are categorized into internal (strengths and weaknesses) and external (opportunities and threats). -
What is Zara’s competitive advantage?
Zara’s competitive advantage is its customer-centric approach that mainly focuses on establishing stores in high-traffic areas with an emphasis on spacious layouts and limited stock at affordable prices. This creates a high appeal of Zara’s products among customers.
Wrapping Up!
What seems like an unusual marketing strategy on the surface has been working well for Zara. You can explore other unique and unconventional strategies of brands using SWOT charts. Head over to the EdrawMind gallery and find out more SWOT analysis, PESTLE analysis, and mission statements.
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