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

Porter Analysis of the Zara Fashion ChainThe Zara trend chain, with 546 stores in 30 countries today ?from which 340 are outside Spain- and ?2914,3 millions of total gross revenue in 2002, is undoubtedly the group?s locomotive (Inditex, 2003). In 2002 it represent 33% of the group?s total stores, accounted for 72% of the group?s total sales and contributed to the holding?s total profits for ?540.4 millions (Inditex FY2002 Results Presentation, 2003). Moreover, Zara with 75-90 new-fangled 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 study the competitiveness of the market.Threat of entryThreat of entry to the apparel persistence is medium. Economies of scale play the moderate role (as stated in the field of study study), capital requirements for entry vary, distribution channels are available, threat of vengeance is medium and government legislations play only a moder ate role. On the otherwise hand market experience and differentiation play the live role.Threat of substitutesThreat of product-for-product substitution on this market is very high. It comes from other apparel retailers, designer clothes and tailor houses. Substitution by inquire is unlikely. Generic substitution can take place as well as ?doing without?.Power of buyersPower of buyers on the market is moderate because on that point are many small buyers, retailers differentiate and are of big size, utility(a) sou...