Zara Company Business Model Essay Example | Topics and Well Written Essays - 1000 words

Zara Company Business Model - Essay Example Gap Inc. commonly known as Gap is a multi-national clothing and accessories retailer in America. Its headquarters is currently in San Francisco, California. However, it also has some of its design offices London, San Francisco and London. The company’s brand name is Gap, and it sells clothing to all groups of people ranging from males, females, and children. It operates five principal divisions namely; Banana Republic, Piperlime, the namesake banner, Athleta, and Old Navy. It has outsourced its production to China, Hong Kong, South Korea, Taiwan, among others. Additionally, some of its products are also manufactured in Central America. Some of its strengths that have enabled it to remain relevant in the market include; brand recognition, multiple stores worldwide, segmented markets, product utility, among others (Maheshwari, 2012). However, it failed to acknowledge the importance of its customers by paying lots of attention to its expansion strategies, instead of meeting the customer needs. It is a fact that expansion strategies can only be successful when apposite research is done. Concentrating on expansion strategies is correct for several stores only when they have a strong foothold in the market, or when their customers are extremely loyal. However, these two fundamental factors were not present in Gap’s case. Gap focused on expanding its stores by cutting expenditures in some areas of the company. This resulted in the loss of the company’s core values, goals, and objectives.... Concentrating on expansion strategies is correct for several stores only when they have a strong foothold in the market, or when their customers are extremely loyal. However, these two fundamental factors were not present in Gap’s case. Gap focused on expanding its stores by cutting expenditures in some areas of the company. This resulted in the loss of the company’s core values, goals and objectives (Moin, 2011). In the long run, its competitors such as TJX, Ross Stores, Wal-Mart, just to mention but a few moved into the industry; thus, grasping a strong prominence. Additionally, these retailers were smaller compared to Gap; thus, they did not find difficulties in keeping up with the changing needs of the industry. Gap Inc. inability to quickly respond to the changes in the industry led to a decline in its sales and dividends. Disruptive Business Model Disruptive business model refers to a business idea that is extremely different from the way business is normally cond ucted. Therefore, it contributes to total interruption of the entire industry leading to market revolution, and not the customary market evolution. This type of business model normally leads immense tectonic shifts in the behavior of customers, market upheavals, as well as change of the market share as innovators of the novel disruptive model roll out the revolutionary service or product. An example of this model was demonstrated by Dell through its direct-to-consumer retail model opposing the archetypal retail store front. Dell’s new model served customers at a fairly cheap price and it put in place the most current components effectively compared to the archetypal store-front retailers. After five years of its existence, several store-based