Introduction
Zara company will serve as the primary subject of this paper. This article’s primary focus will be on addressing whether or not Zara is a multinational corporation, and supporting evidence will be presented. The notion of managing cultural differences will also be subjected to critical analysis in this essay, and the essential international tactics Zara employs to deal with cultural differences will be provided. In addition, future international recommendations on how Zara should manage cultural diversity will be discussed.
Question one: Critically discuss whether Zara is an international business
Inditex, which owns Zara, is one of the most successful fashion businesses in the world. The one-of-a-kind business strategy, which encompasses product creation, manufacturing, distribution, and direct-to-consumer retail sales, has the customer as its primary focus throughout the process. Zara is a clothing retailer established in 1975 and caters to the needs of men, women, and children. Zara, Pull and Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, and Zara Home are some brands it owns and operates (Singh, 2020). Amancio Ortega Gaona established Zara in 1963, and the company’s current headquarters may be found in A Coruna, Spain. Zara stores may now be found on every continent, with 2,213 locations spread throughout 93 nations (Anwar, 2017).
It took Zara thirteen years from when the company was founded until its first international growth (Mo, 2015). Before expanding into other areas, the company decided to put its business model to the test, learn as much as possible, build up its capacity, and establish a competitive advantage. By opening 82 outlets spread out over several years, they initiated what is known as a “long domestic market penetration” in Spain. Zara’s international expansion may occur in two distinct phases: the cautious growth period and the aggressive expansion period. This concluded the first stage, which ran from 1988 to 1996 and was typical for conventional enterprises that followed the usual pattern of globalization (Tonra, B., 2018).
Only in markets that were geographically and physically adjacent to the company’s existing locations did new stores open, such as Portugal (1988), France (1990), Malta (1995), and Cyprus (1999) (Stooksbury, 2021). Zara added only one or two stores to its portfolio during this period annually. Until 1998, Zara was in ten international markets and a total of 107 stores (Helal, Ozuem, and Lancaster, 2018). 1998 marked the beginning of the period of aggressive expansion, and this approach has been adhered to up until now. As a result of the fact that the company had previously operated in an international setting and had acquired knowledge regarding market expansion, the further market expansion was carried out more expediently, and it involved opening a more significant number of stores in a wider variety of nations.
In 2017, Forbes ranked Zara as the 51st most valuable brand in the world, and the company now operates 2,740 stores in more than 100 countries (Chan et al., 2020). Zara has promised its customers for the foreseeable future that they will receive first-rate service no matter where they are located. These initiatives aim to ensure that as many people as possible can use the company’s website without encountering any difficulties, regardless of the type of computer they use or how they gain access to the site.
Zara is committed to ensuring that its website and business practices are highly accessible to people with disabilities and other impairments (Choo, Balan, and Lee, 2019). This alignment will take place over the next several years (as these may change from time to time). Zara has formed partnerships with seasoned consultants that have a strong reputation on a global scale in order to aid in these efforts. Additionally, the company is aiming to improve the accessibility and usability of its website.
Question two: Cultural difference management at Zara
The socio-cultural landscape is an important aspect that affects the retail sector. As a result of the development of social media, consumers’ preferences frequently vary, particularly among millennial and generation z populations. It is anticipated that over 3.43 billion people will be actively using social media platforms by 2023, and these individuals spend an average of 144 minutes per day online (Tankovska) (Ha, 2021). Because of this, many firms are modifying how they engage with buyers and advertise themselves to them as social networks become more integrated into people’s everyday lives.
To boost foot traffic and knowledge of their brands, businesses in the industry employ sponsored aids, form collaborations with celebrities and other influential figures, and engage in public relations. People search for fashion inspiration and the latest trending fashions on easily accessible sites such as Instagram, Tik Tok, Facebook, Pinterest, and Twitter (Sornapudi and Srivastava, 2021). These platforms are popular and widely used. Consequently, the latest fashion trends spread like a virus and evolve very quickly, which compels customers to look for new items of fast fashion continuously. For this reason, keeping up with the latest trends and utilizing social media to your benefit is essential to maintaining a competitive edge.
Because there are so many rivals and options available, companies are placing a more significant emphasis on the quality of the experience they provide their customers. Customers enjoy affordable expenses associated with switching brands; hence, a negative experience and encounter with a brand could quickly destroy the image of the customer’s chosen brand. However, the opposite is true: providing outstanding service and making customers happy can boost long-term brand loyalty, positive word-of-mouth, and sales. A customer who is entirely happy with your service generates 2.6 times as much revenue as a customer who is only slightly happy with it and 14 times as much revenue as a customer who is only somewhat unhappy with it (Jamejami, 2016). Maintaining relationships with one’s current clientele is more straightforward and less expensive than expanding one’s customer base in search of new clients.
Zara encourages a culture of entrepreneurship and has many entry-level employees who can rapidly advance their careers inside the company. About two-thirds of Zara’s store managers are promoted from within the company, contributing to the company’s generally low turnover rate (Leinwand and Mainardi, 2016). The company encourages its employees to take calculated risks (as long as they learn something) and act swiftly on their ideas. Aside from providing store managers with precise cost, profit, and growth targets and a compensation system that includes fixed and variable elements, top management also gives store managers unrestricted discretion over their stores’ day-to-day operations and performance. The variable component can account for as much as half of the overall remuneration, meaning that retail employees are significantly motivated by incentives.
In addition, after an individual has been selected for promotion, the shop where they work works closely with human resources to create a personalized training plan for that employee. Zara continues to show its dedication to cultivating talent by providing its employees with periodic follow-up training for this program (Gattorna, J., 2016). Furthermore, there are relatively few levels of management, making for a flat organizational structure. Customers are Zara’s most valuable asset, but the firm also employs fashion industry experts like trend analysts and customer intelligence specialists to help it stay ahead of the competition. Over two hundred and fifty people are employed as Zara’s creative team members. They all put into practice the company’s core belief that there is no such thing as the word “impossible” at Zara.
Instead of having employees from different departments work in silos at the company’s headquarters, as is the case at many other businesses, Zara has fostered a culture (via protocols and procedures) in which employees regularly communicate, allowing the company to avoid delays that plague other businesses. Thus, Zara can sidestep the issue. The sales and marketing teams obtain input on the trends through regular discussions with merchandisers and designers. Maintaining open lines of communication between the store’s design and merchandising teams and the sales and marketing department is essential for informing customers of new product lines and catering to their preferences (Kent et al., 2016).
In addition, the manufacturing schedule is meticulously managed to ensure no time is lost during the approval process. The design team has a relatively flat organizational structure, and its primary focus is on providing an accurate representation of catwalk trends in a manner that is appropriate for the target demographic, which is the Zara client. The design and product development teams, both of which have their headquarters in Spain, collaborate closely to produce one thousand new styles monthly (Aftab et al., 2018). The fact that Zara’s employees are given the autonomy to make decisions based on the information provided by the company’s customers is one of the primary reasons why the company’s employee strategy has been so effective.
There is no one person responsible for designing for Zara. Based on daily data feeds showing which garments are hot, the company grants its designers unprecedented freedom in approving goods and advertisements (Gabriel and Lang, 2015). Because of the firm’s persistent dedication to its clients, its entire business model is structured so that the final products’ demand pattern determines the parameters of its manufacturing. It is unusual for international firms to operate this way, where the raw materials dictate the character of the production process. Moreover, the client is central to Zara’s brand culture, which has been and will continue to play an essential role in the company’s success.
Question three: Zara’s future international strategies recommendations
The rapid pace of globalization and immigration between and within countries has made the mixing and exchanging of different cultures an inevitable consequence of these two processes (Pieterse, 2019). This emerging pattern hugely benefits the economy, and businesses are essential in ensuring their continued success. Differences in culture can be seen both in the workplace and on a national scale due to the routines, attitudes, traditions, and beliefs held by employees that are influenced by their ethnicity, nationality, culture, language, or sexual orientation.
To keep cultural differences alive in the workplace and at the national level, we need a well-coordinated and well-maintained system of socially learned values, beliefs, and standards of conduct that influences the range of acceptable behaviors that can be distinguished from one socioeconomic group to the next. The ability to comprehend, interact with, and productively engage with individuals of other cultures, in addition to the capability to work with different cultural beliefs and timetables, is what is meant by the term “cultural competence.” (Liu and Li, 2022). To avoid cultural any form of cultural differences at work or at the national level of the global market, Zara should implement the following strategies:
Overcoming language and cultural barriers
One of the most common difficulties when working on a multicultural team is the ability to communicate effectively with coworkers from different linguistic backgrounds (Grobelna, 2015). Suppose every member of the team speaks a different language. In that case, the organization will want to find a common language that all employees should utilize so that there is the ease of communication between all members of the team. After deciding which language is more comfortable, Zara needs to eliminate any remaining barriers to communication caused by language by doing the following: Encourage employees to learn at least a few key phrases in other languages, as well as a few key sentences (or phrases) in each of their native languages, in order to create a more welcoming environment in the workplace.
Zara should also reinforce the idea that asking someone to repeat themselves is okay. Team members should not feel ashamed about acting this way, especially when working remotely (Oto and Chikkatur, 2019). If employees have thick accents, then others may need to ask to hear the same message twice. This is something that both sides should be okay with, as it is necessary to communicate well. One way around this problem is to use the language most people feel at ease. This language should be used in all formal settings, including meetings. In addition, Zara should arrange for the team members to participate in ad hoc get-togethers. This will be an excellent opportunity to gain knowledge about the many civilizations of the world.
For instance, the group could discuss the aspects of a particular culture that set it apart from others, such as its cuisine, holidays, and other traditions. In addition, Zara should delegate work responsibilities in a manner that considers the cultural norms of the team members. Remember that every culture has its holiday calendar, holiday schedule, and vacation policy, and plans accordingly (Anantamongkolkul, Butcher, and Wang, 2017). When managing a multicultural workforce from a remote location, this is of the utmost importance
Keeping an open mind on the various cultures and the differences between them
The most effective method for Zara to demonstrate respect and gratitude for its workforce is maintaining an openness to the customs and principles necessary for people of various cultures (Cohen, 2020). Thus, the company should only promote or tolerate one culture as much as others. For the upcoming Christmas season, for instance, it will be essential for Zara to use a variety of décor to accommodate customers of diverse cultural backgrounds. This way, the multiethnic team will know that whatever they want to celebrate on the winter solstice and summer solstice is accepted and supported.
In addition to this, variety encourages the generation of novel ideas. As a result, Zara has to be more open to understanding the cultural differences among its staff and celebrating those distinctions respectfully. In addition, Zara might attempt to gain additional knowledge regarding the features of a particular culture. For instance, it should begin by investigating the cuisine and understanding the kinds of things that people from various cultures value and love to wear.
Coordinating a Multicultural Education Program
Cross-cultural training is something that Zara should organize in order to boost happiness and morale in the workplace as well as internationally (Benseddik, 2015). This course will assist participants in overcoming cultural obstacles in the workplace and the global market as a whole. By taking this method, workers will be able to meet one another personally while learning about the varying cultural perspectives of the clients they serve. Therefore, the corporation should only promote or tolerate one culture as much as others. This training should emphasize the methods of minimizing cultural barriers, avoiding stereotypes and prejudices, appreciating one’s cultural skills and those of other cultures, improving social skills, becoming a better listener, and focusing on shared values rather than cultural distinctions.
Delivering Honest Feedback
A big part of the leadership and management responsibilities of any organization is making sure that employees receive feedback that is both honest and constructive. The employees have a right to be informed of the truth regarding the quality of their work, whether positive or negative. A multicultural workforce must receive honest feedback (Diller, 2018). As a result, Zara needs to proceed with caution while analyzing the work of its workers and how those employees respond to the outcomes of their labor. Particularly when it is constructive and has the potential to be misunderstood as unfavorable, every culture and even every country has its approach to providing feedback. As a result of this, Zara should make it a priority to respond to staff as well as customers in the most considerate manner possible, taking into account the cultural beliefs of each group.
Considering different cultural communication styles
Every culture has its distinct method of communication, which can include aspects such as patterns of speech and nonverbal expressions of communication (Ting-Toomey and Dorjee, 2018). Zara can better grasp social behaviors and make plans to adapt to them if it is aware of its staff’s and customers’ legacy. Nonverbal cues include things like body language, facial movements, and mannerisms, amongst other things. It is essential to be aware of the many communication styles that exist across cultures, and it is equally important to interact with coworkers using these rules. This could be confusing, but both the management and the workers will need to make adjustments. Zara should be flexible enough to understand the many different ways of interacting with the many different types of customers across the worldwide market.
Recognizing the significance of the cultural differences
Being conscious does not mean acting as though everyone is the same; instead, it means welcoming and taking pleasure in the existence of variation. It is essential while putting together a team that includes people from various cultural backgrounds to ensure that their respective cultures are respected and appreciated (Pader, 2015). Because of this, Zara needs to make sure that everyone knows that any racial remark, even if it has meant as a joke, is unacceptable and will result in disciplinary action being taken against the offender. In addition, the business needs to be mindful of any cultural requirements that its employees may have. Because of their religious beliefs, some people choose not to consume certain foods and instead cover their heads with scarves. Before communicating this information to the organization’s members, the corporation needs to make sure that each of these components has been tallied and included.
Conclusion
Zara will better grasp its cultural preferences and prejudices due to the discoveries about culture. These discoveries will assist the company in modifying its approach to make it more suitable for use in various cultural contexts. People of various cultural backgrounds have varying expectations of what they want from the company. The insights will also assist the company in communicating more successfully across cultural and geographical boundaries due to their use. This knowledge on culture should be utilized by Zara in order to construct culturally sensitive websites, establish new employee orientation programs, implement programs that train employees on how to relocate, and improve the efficiency of multicultural groups.
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