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Running Head: ANALYISIS OF CASE STUDY
Analysis of Case Study 3
Running Head: ANALYISIS OF CASE STUDY
Analysis of Case Study
Name
Institution
Abstract
These two case studies provide an analysis of two different strategies that have been used by Zara and America Online (AOL) to overtake well known companies in marketing and selling products. Case study 2 focuses on how Spain’s Zara is flexible in creating new designs and releasing them in the market in approximately two weeks. Case study 3 focuses on America Online (AOL). AOL is now a household name against Prodigy Communicators, a company that dominated in 1990’s. This paper analyzes the strategic issues in each case and contrasts with the other case. However, these two companies have different products and use different strategies in marketing them. Zara uses focused information technology strategy and America Online uses relative product advantage strategy. These are different strategies that have given the above companies an upper hand in the market compared to the differentiation strategy used by most household companies. After the reviews, this paper goes ahead to give a recommendation on the strategies of each case. Finally, there is a general conclusion of companies, their products and functionality.
Analysis of Case Study
Introduction to Case 2
Spain’s Zara started off as a small company, but over time, the Small Company has developed capabilities by use of information technology. By doing that they have been able to pursue a focused differentiation strategy at a much lower cost than the luxury fashion houses. According to Hughes, et al (2010), focused differentiation strategy is an approach under which a company sets in to come up with a unique product and market it to different segments of customers. This strategy is employed where a company has a clear competitive advantage.
Zara used the differentiation strategy and integrated it with Current Information technologies to reach out to the fashion market. Unlike most luxury designers, Zara and other small fashion companies have started to produce less expensive clothing’s and accessories and develop well received brand names that still command a premium price.
Zara’s success in fashion can be attributed to its ability to produce extremely fashionable clothes at lower prices and turn them over quickly by selling them in their chain of clothing stores. Lately, major fashion houses cannot catch up with Zara. This is because they take much more time to provide their new designs in upscale market compared to the two weeks that Zara takes. For Example, Zara can create a new collection in five weeks only and deliver it to stores for sale. Zara has sophisticated IT that links Zara’s designers to its suppliers and clothing manufacturers abroad.
Strategic Issues in Case 2
As described earlier, Zara fashion house uses focused Differentiation strategy to market their products. Today, Zara clothes are the most admired in the world. This is because Zara revolutionized the fashion industry using the existing Information Technologies. Some fashion household names such as Gucci and Dior have been long overtaken by such small companies.
Zara has an exceptionally fast manufacturing to sales cycle just in fashion strategy. This helps it to offer its collections at comparatively low prices and on time. This has made them the envy of other clothing lines. For example, in producing a new collection such as ladies’ dresses, Zara takes around five weeks. Other fashion houses may take around six months to have their new collection in sale. Thus, Zara is making a lot of profits by using a different strategy that is integrated with Information Technology.
Similarities with Case 3
Zara and America online are Small companies compared to their competitors who have dominated the market for a long time like the Dior, Gucci and Prodigy Communications. Both companies are able to process their goods and services relatively fast and place them in the market. For example, Zara will have a new collection out for sale in around five weeks. On the other hand, America Online can offer their services online in a chat room and make thousands of sales. This is in contrast to their competitors, such as Gucci who take over six months to have a new collection in the market and Prodigy communicators who will take a long time before processing emails.
Both companies were once ignored by household companies in their respective industries. For example, Zara was considered to be producing cheap clothes compared to Dior and Gucci. Also, Prodigy Communications ignored America Online as a little thing off the side.
Just like America Online, Spain’s Zara has remarkably convenient, fast channels of distribution and sales points for their products. For Example after releasing a new collection, Zara used Information Technology channels to line suppliers and manufacturers with their outlet shops. Both Zara and America online have used technology to diversify their markets. Zara uses IT to link its suppliers, manufacturers and sales agencies. It is...