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Whencompanieschoosethebusinessstrategies,thereisnomorethanthesethreetypes:
·CostAdvantageFocusDifferentiation1ZARAisasubsidiaryoftheSpanishInditexGroup,bothclothingbrand,franchisedtheZARAbrandofclothingretailchainbrand.Establishedin1975inSpain,ZARA,partoftheInditexGroup,setupin56countriesaroundtheworld,isrankedthirdintheworld,Spainrankedfirstclothiers,morethantwothousandtheclothingchain.ZARAlovedbytheworldofyouthfashion,designerbrand,excellentdesign,thepriceischeaper,issimplytoallowcivilianstoembraceHighFashion.2womenswear,menswear,children’sclothingareinZaraoperatingrangeSowecanseeZarausedifferentiationstrategy3Accordingtoexpertanalysis,thecomplexneedsofconsumersachievementsZARA.Themiddleclassinthefuturewillbegreatlyreduced,whichmakesitmoredemandingforthepriceofclothing,theparitybecomesabigdemand;luxurywindgustedamongyoungpeople,alotofpeopleatallcoststopursuethousandsofluxurybutnoteveryonecanafford.4so,wecanseeZarausecostadvantagestrategy5KEYFACTORSwhenabusinessmanagermakesdecisionsregardingitsstrategy,lotsoffactorsshouldbeconsidered.6SWOTismethodgenerallyusetoanalyzecertainparametersduringpreparationofanybusinessstrategy.Thismethodisbasedonidentificationofexternalandinternalfactorswhichareeitherinfavororagainstplanningtogetdesiredresult.7ExternalfactorsMarketpotentiallevesofcompetitionlegalandpoliticalenvironmentsocioculturalinfluencesRivals`strategyInternalfactorscoreresourcesandcapbilitycompany`sgoalorganization`sstructure
8DifferentiationStrategy-----Zarakeyfactorsfromthreeaspects------ProductlevelServicelevelindustryandvaluechainlevel9Productlevel-----1.ProductpositioningdifferentiationDifferentcustomerhasdifferenttasteanddemandIthelpcompanytograspitsspeciallyappointedcustomergroupItwillinhencetheproductuniquefeature.BuildthedifferentimagefromitsrivalsLongtermdevelopment10
2.InnovativeabilityInnovativeabilityshouldbedevelpedinalllevelItcanbeshowedinbrandinnovation,imageinnvation,functioninnvation
11Servicedifferentiation"Customersfirst"ProvidedifferentlevelofservicesaccordingtodifferentdemandsEstablishdifferentclientrelationship,StrengthentheinteractionwithsupplierandretailorOfferexcellentaftersalesservice12CulturalfactorFocusingoncultivatingexcellentorganizationalcultureBccausecultureitselfisjustthecompetitiveresourcewhichcannotbeduplicated.Goodculturecanprovidethecorecompentenciesfordifferentialstrtegy13so,wecanseeZarausecostadvantagestrategy14Valuechainlevel1.beequippedwithuniquevaluerequest2.carefullydesigndifferentvaluechainfordifferentcustomergroup3.getridoftheunnecessarypartofValueChain,andpaymoreattentionanthedifferentpart4.allthelinksinvaluechainshouldbeintergratedandcoordinated15ThechallengesandmarketingresponsesZaramightconsiderwhenseekingtosustainitscompetitiveadvantage:Challenges:
DifferentiationdegreeThedifferentiationdegreeneedtoneithertoobroadnortoonarrow.Atoobroaddifferentiationmayfailtosatisfyspecificcustomerneeds.Atoonarrowdifferentiationmaycausethecustomersdifficulttochooseaproductthatmeetmostoftheirneeds.
CostsDifferentiationstrategymakestocompanytospendmoreoninnovationandproductiononseveraltotallydifferentproductsthanthatoffocusedorcostadvantagestrategy.16
Departmentsco-operationBecauseproductsaredifferentfromeachotherinonecompany,andeachdownstreambrandhasitsownseriesofdepartments,soitbecomesachallengeforthecompanytocoordinatethedepartmentsofdifferentdownstreambrands.
CompetitionAlthoughthedifferentiationstrategyismoredifficulttobeduplicatedcomparedtocostadvantagestrategy,fromthecurrentpoint,thereisstillapowerfulcompetitorinthemarketagainsttoP&G,thatisUnilever.Similarstrategyandmarketposition,UnileverwillbealastingchallengetoP&G.
ConceptofupstreambrandItisacommonproblemforcompaniesadoptingdifferentiationstrategy.Sometimescustomersaretoofamiliarwiththedownstreambrandsthattheymayforgetthecompanyitbelongto.ItisalsoaproblemforP&GthatcustomerssometimesfalselyassumethebrandunderP&GasbrandunderUnilever.17Marketingresponses:CustomerneedsCustomerneedsarethemostimportantfactorcompanyhavetoconsiderasthewronginformationaboutcustomerneedsmaycausetheeffortofacompanybecomeuseless.PricefactorAstherelativehighcostofdifferentiation,thepriceofacertainkindofproductmayhigherthanthatofastandardizedproduct.Customersensitivetopricethanwillnotchoosethedifferentiationproducts.18Whendoingbusiness,weneedtodecideourposition,tobecomealeader,afollower,achallenger,ormaybeanicher.Fromtheseyears’situationandthemarketshareinChina’smarket,wecanseethat,Zaraalwaysaleaderinfashionclothingindustry.Butafollowerindesigning.Becomingaleader,foroneaspect,itincreases:·salesvolume·competitiveadvantage,suchascost,capital,resources·popularityandloyalty·attracttalentpeopleHowever,ithasdisadvantagesatthesametime.19·Easytocopy.Asaindustryleader,becauseofitspopularity,othercompaniestrytocopywithyourproductsatalowercostthanyou.Notforalongtime,itwillloseitscompetitiveadvantagebecauseitsbettercopi
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