Two examples of these strategies are multi-domestic and transnational corporations. Consider which of these strategies fits your small business as you target more global opportunities.
The competitive companies target similar markets but employ different strategies in their business models to manage the distribution of product lines. Zara is the youngest of the trio, having begun in Spain in The company is owned by textile giant Inditex.
Uniqlo was purchased by Fast Retailing Co. Its business model is based on that of The Gap. It was founded in Sweden in These three clothing distributors have differing approaches to their ownership of materials, sourcing of manufacturing and treatment of auxiliary brands.
Zara boasts 2, stores, and Uniqlo has opened 1, stores. Uniqlo's introduction into the U. Zara currently has 55 stores open in the United States, with a majority of its locations in Spain, where there are over locations.
Zara's strategy is to offer a higher number of available products than its competitors. While most clothing retailers manufacture and offer to the public for sale 2, to 4, different articles of clothing, Zara's production has been markedly higher, at over 10, pieces produced per year.
This unique feature of the company's strategy has allowed Zara to appeal to a broader number of customers with unique tastes. Uniqlo's distribution channels are concentrated in its country of origin; over Uniqlo store locations are in Japan.
Uniqlo's distribution strategy has centered on the timing of its products' introductions into stores, with new products created as a function not of quantity, but of demand.
Uniqlo responds to changing trends in Japanese fashion and specifically caters its designs to mimic the minimalistic style that is popular in Japan. This affects the appeal that Uniqlo may have for Western distribution channelsand may be the determining reason behind its low number of store locations in the U.
Alternatively, Monki sells clothing pieces that are half the price of those sold by Collection of Style and features designs that are comparably youthful. Zara divides the products sold within its stores into lower garments and upper garments, with price points being higher for the upper garments.
Zara hopes to be perceived as a high-end retailer with affordable prices. Its flagship stores are strategically opened in key traffic points worldwide that have high real estate costs, such as its Fifth Avenue location in New York City.
Zara does not stress advertising as a part of its branding strategydiffering from Uniqlo; the company instead funnels the dollars that would have gone toward advertising into new store openings. The adapted strategy from The Gap that Uniqlo employs is to position its brand as private-label apparel; the company creates its own clothing, and Uniqlo only sells it within the confines of its brick-and-mortar stores and on its website.
The company also uses sporting events to appeal to the general population. To transport its goods from factories to stores, retailer relies on rail and sea as a means to promote efficiency within its internal logistics. Zara is able to design, manufacture and sell its products in stores quickly because the company owns many of the vertical factors of production.
Zara has a main manufacturing plant in the city of La Coruna, where the clothing retailer was founded. Zara's approach to fashion differs from Uniqlo's in that it attempts to predict customer needs rather than follow current fashion trends.
The turnover of products within the store is very high, with an average article of clothing remaining on the shelf for only a month.Multidomestic Strategy. c. Global Strategy.
Where was Zara first located? Andalucia. Castilla. Galicia. Cataluña. 2) Economies of scale are: a) Reproduction in unit cost achieved by producing a large volume of a product. b) Decrease in the unit cost of production associated with the increase in .
The Bartlett & Ghoshal Model indicates the strategic options for businesses wanting to manage their international operations based on two pressures: local responsiveness & global integration.
Bartlett & Ghoshal's model is explained in the short revision video below and in the study notes further. Transnational Strategy. Transnational strategy Transnational strategy is an international strategy that combines firm-wide operating efficiencies and core competencies with local responsiveness tailored to different country circumstances and needs.
seeks to combine the best of multidomestic strategy and a global strategy to get both global efficiency and local responsiveness. Furthermore, sustainability strategies will be developed in the apparel industry under the lead of the Sustainable Apparel Coalition, which includes Nike, Gap Inc., H&M, Levi Strauss, Marks & Spencer, and Patagonia (Kaye, ).
Global strategy is a process of expanding and competing in globalized markets. At some point, companies will be an international, with few products or services in a select number of countries. A firm using a multidomestic strategy sacrifices efficiency in favor of emphasizing responsiveness to local requirements within each of its markets.