ZARA

Zara refers to the flagship chain store under the umbrella of Inditex Group. It is under the ownership of Amancio Ortega. It is the largest as well as the most globally present of the six retailing operations under Inditex, (Morel et al, P. 1). Zara’s concept of fashion was well received by the general public just a year after it opened operations in 1975. This assisted it in expansion of store network from their La Coruna, Galicia headquarters in Spain where their first store is based.

This company’s first overseas store was in Portugal in 1988 followed closely by their 1989 operations in the United States. Since then, Zara has opened several new bases of operation in several countries.

Zara has followed the classic ‘stage model’ of operation whereby it has strived to enter culturally or geographically close markets before embarking on activities to attract clients in other distant markets, (Morel et al, P. 2). The belief by Zara that distances across the borders should not impend sharing of one global culture has borne fruits.

By entering the highly competitive markets considered hugely as the global fashion capitals such as Milan (2001), New York (1989) and Paris (1990), Zara proved it was ready for competition posed by the big players. Through its global expansion endeavors, Zara tried some of the riskiest markets such as the United States so as to better its vision and culture for the general market.

One notable strategic intention of Zara in expanding to Portugal before other international markets is the shared cultural and geographical aspects of Portugal and Spain, (Morel et al, P. 2). This market required fewer adjustments to its Spanish model of operations.

With time, what mattered more to Zara was cultural proximity of the countries in which it expanded into Spain. For instance, some South American markets appeared culturally closer to Zara’s targeted market than the ones found in Europe. Although starting operations in New York was not a very financially attractive move, it enabled Zara not only to get close to the fashion trends of the time but to get much closer to the fashion trends of the time, (Morel et al, P. 2).

Due to the international experience that Zara had gained over the years, the management decided that it was better to reinforce its situation in the markets where it was already in operations rather than a blanket expansion strategy.  Further, the fast delivery of products which Zara implemented helped greatly improve its customer satisfaction resulting into more products, (Morel et al, P. 5). Designing and trends which Zara followed also supported it in expanding to its new uncharted markets. The online presence has also helped Zara in its global expansion strategies.

The last area which has really aided Zara is its vertical method of business integration which spans just in time production, design, sales and marketing. By adapting to requirements of its clients in the shortest time possible, Zara has been able to get to its customers what they need within the client’s timeframes.

 Zara considers timeframes for delivering of client’s orders as being far above and beyond the concerned costs of production. This has made Zara the port of call to many time constrained clients, (Morel et al, P. 5). Due to the current saturation in the European market, Zara has been looking at expansion of its product line across the continents. This has been especially to get to its clients who may form a substantial possible client base.

Therefore, capability to adapt to any cultural base has been one of the main strong points for Zara. By careful consideration of the cost of market entry and possible gains to be achieved, Zara has proven itself a major player in the international fashion industry.

Take a Look on Tata Motors’ Ambitions!

The car market has evidently changed for the recent years: the sizes of market and sales volumes across the world relatively decreased, while new players from ‘beyond’ has come to join the ‘veterans’. For example, TATA Motors, a famous Indian automobile-manufacturer, has demonstrated the solid abilities of strategic planning relying on the practice of global expansion since 1998. New deals and contracts – as well as great plans in the future - with outstanding automobile magnets such as Fiat and Ford for the recent decade have shown the practical efficiency and grandiose ambitions of TATA Motor’s bosses.

In fact, the strategy of TATA Motors can be formally named as impulsive and multiple penetration into global market. This offensive strategy, however, does not imply the direct ‘conquering’ of market share, but a gradual ‘attacks from the different flanks’ involving versatile directions of manufacturing and marketing. After several years of domination on the market of commercial cars, TATA Motors entered the market of passenger automobiles in 1998 introducing ‘TATA Indica’, which was the first automobile developed in India. Due to powerful and economic engine and aggressive marketing policy, the model became one of the best-selling cars in Indian auto history. Indeed, it was the first great success of TATA Motors, while the British version of model imported as “Rover CityRover”. After the success with ‘TATA Indica’ the company made most rational and well-timed decision – to increase own influence on the global market. Therefore, TATA Motors purchased the South-Korean ‘Daewoo Commercial Vehicle Company’ in 2004 (Menezes).

 The reasons behind such action were quite obvious: TATA Motors intended to reduce the dependence on domestic market ofIndia , and increase the number of offered products. The company’s expansion continued with intrusion into the market of buses where ‘Starbus’ and ‘Globus’ had been introduced. In 2005 TATA Motors acquired 21% of Hispano Carrocera’ shares and signed a contract with Brazilian car leader Macropolo S.A. In the same year, the production of TATA Ace – first Indian mini-truck – had begun: the model had a commercial success on both domestic and international markets. The export was directed towards the European, South-American and African countries. In 2007 TATA Motors signed a cooperative contract with Fiat and Iveco obtaining a legal permission for manufacturing of diesel engines. Evidently, the appetite of Indian company was unlimited, and 2008 resulted in new business achievements for TATA Motors. Thus, in cooperation with Luxemburg ‘Motor Development International’, the company developed first aircar called ‘TATA OneCAT’. Then, the company introduced one of the cheapest cars in the world – TATA Nano – which led to enormous increasing of demand. In the same year, Tata Motors signed a contract with Ford buying the rights for manufacturing of Jaguar Cars and Land Rover (Carty). Soon, the list of deals will be added with Daimler and MG Rover. Some months later, TATA Motors presented new marketing alternative within their large assortment: TATA Indica and TATA Ace equipped with electro-engines. Generally, it looks impressive, even extraordinary, does not it?

Most notably, TATA Motors does not plan either to stop, or change their global expansion’ swift strategy. Today, there are big plans to take a market niche in neighboring car markets, particularlyRussia and China. That is how with discovering new marketing directions and introducing a big array of market options, the company can take serious economic advantage from global expansion.

A Breakthrough of Air Industry in the UAE

It is quite weird and interesting to witness how previously unanimous economic leadership of the USA and Europe in the world either negates or gets equalized with the developed economies of the Middle and Far East. For instance, China has recently become a leader in global selling of automobiles overcoming the leadership of the United States. Now, it is apparently a turn of the fast-growing United Arab Emirates to retrieve a leading position from European market participants. The specialists indicate about serious expansion and increasing of air industry in the UAE for the recent years, and, unsurprisingly, European airlines such as Lufthansa and Air-France take a serious concern about own competitive advantages.

For me it is not a miracle that the competition with the Middle East Airline Companies – particularly ‘Emirates’ – is a central threat for influential European air-carriers. For the recent years Arabian airline companies such as ‘Emirates’, ‘Qatar’, ‘Etihad’ has been actively gaining the passengers for long-distance directions, offering the routes with stop-overs in the Middle East territory. At the same time, ‘Emirates’ is the largest exploiter of ‘Boeing 777’ and ‘Airbus380’ planes. Thus, in addition to 90 ‘A380’ planes there will be new 32 vehicles, along with additional 58 models of Boeing. And now, it is a matter of opening Terminal 3 at the Dubai International Airport which impresses by both its geographical sizes and level of services (Mouawad). At the moment, we can potentially say that, with keeping this pace, the passenger traffic of ‘Emirates’ will be growing on approximately 20% each year.

Obviously, we deal with well-designed and well-timed economic strategy of global expansion involving numerous factors of progressive development: sooner or later, the beneficial location of Dubai hub and enormous passenger turnover rate would allow ‘Emirates’ to win the major part of European passengers. It is an aggressive and offensive strategy of penetration into market which implies the radical exploitation of organizational and financial resources for expansion. Today large-scale Terminals of Dubai offer very attractive services for passengers of entire Asian area: “there are 184 flights a week from Dubai to India, to cities like Ahmedabad, to commercial hub in the state of Gujarat, to 17 cities of Africa, to cities of China, and so on” (Mouawad). Obviously, the objective of “Emirates” aggressive strategy is to seize new transfer units across Asia and offer more profitable propositions than its European business counterparts. Even a blind man would notice the efficiency of such actions and productivity of investments of the UAE businessmen.

Now, let us think about the reaction of ‘Lufthansa’ and ‘Air-France’. Just put yourself in their shoes. They are seriously confused, even if they conceal it. Of course, on the one hand, we can hear statements of their representatives like “We welcome any rational and fair competition”; but, on the other hand, they have been, apparently, designing some plan of counter-measures. European air leaders have already stated that “Emirates” relies on the governmental support, and, most notably, purchases new models of ‘Boeing’ and ‘Airbus’ on the base of extra-profitable terms of export crediting, although these claims remain unconfirmed. In general, are there any methods for ‘Lufthansa’ and ‘Air-France’ to resist the effects of ‘Emirates’ expansion? If we are talking about legal methods of competition, I do not think so. At the current moment, though. Beneficial location and quick obtaining of Asian transfer zones results in serious advantage for ‘Emirates’ and general expansion of the UAE’s air industry.