5.

The Strategies
A. Integration Strategies
Zara applies the Forward Integration. Since Inditex demands a high integration
between the headquarters and all branches across the globe, therefore Inditex controls its
retailers and distributors all around the world in order to standardize the overall business
performance. In addition, Zara also performs some horizontal integration through its
acquisition of Massimo Dutti from the Massimo Dutti group and the acquisition of
Stradivarius.
B. Intensive Strategies
As an aggressive expander in global market; hence, Zara practices the Market
Development strategy in which they are entering new market with Asian-developing
countries being their first targets. Countries include China, India, and Indonesia. That is
why nowadays, almost in every new shopping malls in Jakarta, you can find Zara store in
it. Currently Zara is targeting the Asian market, hoping it will generate much profit from
this promising market.
Not only that it applies the Market Development, Zara also applies the Market
Penetration strategy, especially in European and American markets. Their techniques of
doing this strategy are by improving its online store and increase customer service in all
retail stores.
C. Diversification Strategies
To complete its product lines, also as a form of their differentiation, Zara sells
accessories to complement their main product which is apparel. This kind of strategy is
called the related diversification. Further, Zara also has the unrelated form of
diversification which is the Zara Home. Zara Home is a retail store which specializes in
home fashion and decoration. Zara Home, similar to Zara, emphasizes exclusivity in all f
its products and it is also relatively more expensive than its competitors. Zara Home is
available in 55 countries including Indonesia. However, in Indonesia we can only find

D. Defensive Strategies

Zara has no defensive strategy because the company is in good condition, not in any
kind of jeopardy. Therefore, it does not need any defensive strategy at the moment.

5.2

Michael Porters Five Generic Strategies

According to Porter, strategies allow organizations to gain competitive advantage from
three different bases: cost leadership, differentiation, and focus. Porter called these strategies
the Generic Strategies. The following is the framework of Porters Five Generic Strategies
and the position of Zara in this classification.

Large
SIZE OF

Cost Leadership
Type 1

GENERIC STRATEGIES
Differentiation
Focus
Type 3

Type 2

MARKE
T

Small

Type 3

Type 4
Type 5

Zara is categorized as the Type 3 because it is aimed to the industry-wide, in which the
size of the market is large. Moreover, Zara also has some strong differentiations that make
them the leader in the industry. Differentiations such as the concept of fast-fashion (which
was pioneered by Inditex), that is supported by its excellent and integrated supply and value
chain.