Porter Analysis of the Zara Fashion Chain Essay -- Business Analysis R

hall porter Analysis of the Zara Fashion ChainThe Zara fashion chain, with 546 hive aways in 30 countries immediately ?from which 340 are outside Spain- and ?2914,3 millions of total sales in 2002, is undoubtedly the collection?s locomotive (Inditex, 2003). In 2002 it represented 33% of the group?s total stores, accounted for 72% of the group?s total sales and contributed to the attribute?s total profits for ?540.4 millions (Inditex FY2002 Results Presentation, 2003). Moreover, Zara with 75-90 new stores within 2003 takes the lion?s share in group?s current year store openings (total openings for 2003 260-315). The purpose of the Porter analysis is to analyse the competitiveness of the merchandise.Threat of initiationThreat of entry to the apparel industry is medium. Economies of scale prank the dampen role (as stated in the case study), capital requirements for entry vary, distribution channels are available, threat of retaliation is medium and government legislations play only a moderate role. On the other hand market experience and differentiation play the vital role.Threat of substitutesThreat of product-for-product central on this market is very high. It comes from other apparel retailers, designer tog and tailor houses. Substitution by need is unlikely. Generic substitution put forward take place as well as ?doing without?. military force of buyersPower of buyers on the market is moderate because there are many dinky buyers, retailers differentiate and are of big size, alternative sou...