Sample Essay

The strengths of the company pertain to Zara’s competitive advantage in the market. The retail proposition accounts for 10 to about 76 percent of the sales for Inditex. The company tends to sell high street fashionable products to the market which are produced in limited quantity and sold at lower prices as compared to the competition. Supported by good quality of the products, the markdown concept is restricted, therefore enabling the company to earn high profits and encourage frequent purchasing. The company also has a very extensive and wide geographic spread of operations which enable it to capture untapped markets as well.  The company has operations in Japan, America, Argentina, United Kingdom, UAE, Turkey as well as in Switzerland, Sweden, Venezuela and Russia. Moreover the company has also been facing constant increase in its revenues since 2001.

The weaknesses of the company however pertain to the financial performance of the company, which after its remarkable increase in growth, its profitability is restricted. The like for like sales slowed from a total of 11 percent in the year 2003 to a meager 1 percent ion 2004. The brand concept pf the main flagship brand of stores, Zara is very string in the local as well as in the international market but the other chains of stores do not share such reputation, wide acceptability and brand equity. Moreover the company has also been facing increases in the cash based costs and expenses since the fiscal year of 2003.  This is harmful for the company as it limits future growth.

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