There are different reasons as to why people buy clothing from the clothing retails shops of their choice. While some do it because the prices are fair some do it because the shops offer a variety of designs and trends. This is the same case as to why women in Spain irrespective of the age prefer to shop at the Zara retail stores. The objective of this paper is to analyze the clothing industry and to compare the strategies of two companies belonging to a real sector.
Five Forces Model of the Zara Retail Company
The segments of the five forces model that are applied to most organizations are; buyer power, supplier power, new entrants and finally degree of rivalry (Dutta, 2002). These forces affect the performance of the business in one way or the other; therefore it is important to the company to ensure that there is a balance between the five forces model. Under the above mentioned segments, there are some sub segments that are studies, this are categorized from 1 to 5 with 5 being the highest. Of the five the buyer power is the weakest since buying is more of individualistic than a group thing. Buyer independence and low cost switching are the factors that most influence the decision of the buyers. The financial muscle and buyers’ size are ranked the least on the scale. Another factor is the new entrants. Under this low cost switching also takes the top spot because when competitors introduce a new product into the already saturated market, they tend to give introduce new lower prices with them (Data Monitor, 2009).
The ownership of the Zara stores falls under the sole proprietorship type. This because the founder and major share holder of the stores is Amancio Ortega. It is however important to note that the stores fall under the Inditex Group of company that also owns and manages other retail store like the Pull and Bear and Massimo Dutti. The headquarters of the company is in Spain although the company has Zara franchises in other major cities in Europe.
The Mango Retail Company
There are several differences between the Zara and Mango retail companies. First the Zara Company has placed more focus on the women designs while the Mango Company specializes in both sexes but with more focus being given to male designs and outfits. When it comes to ownership, the Mango retail company is not a sole proprietorship company but it is owned by different people but all are under one umbrella. The company has more than 1,500 outlets in more than 90 countries all over the world. The Mango is driven by three key forces; concept, team and the logistic system (HE, 2010a).
Concept: being a company that has no central operational centre, the company has come up with a concept that ensures that all the stores have the stock of the latest clothing labels despite the fact that there might be different designers.
The Team: This then brings in the team force. For such an international organization, it is important for the organization to ensure that its team members are flexible and can easily adapt to any changes that might be introduced in the stores. The team members must be able to design any designs that they might be required to.
Logistic System: Being Spain’s second largest textile exporter, the company’s management has to have strong logistic systems to ensure that most of the activities in the different franchises go hand in hand. One of the unique features of the company is its staff. All her employees have an average age of 28% with 85% of the employee being women (HE, 2010b).