Analysis of retail industry in India and formulation of an entry strategy: With a focus on Zara

Abstract

The retail industry in India has been showing spectacular growth rates despite the global slowdown. The growing presence of organised retail, the entry of many foreign players, increased consumer spending power and favourable macro-economic environment are spurring the growth of the industry. The environmental factors play a major role in the dynamics of the retail industry. This contemporary concerns study aims to study the environmental factors which affect the Indian retail industry. The study first addresses the classification of the retail industry in India followed by the study of the environment through a retail specific framework. The second part of the study is devoted to the formulation of an entry strategy for the international fashion major Zara into the Indian market. An objective assessment of Zara’s business model and unique capabilities are provided followed by an objective assessment of the Indian apparel industry’s future prospects and industry attractiveness. Based on the assessment of Zara’s strategy so far and the Indian apparel space, an entry strategy complete with the mode of entry, size and speed of entry and the desirable marketing strategy are formulated. Finally the report briefly addresses the short, medium and long terms challenges that Zara potentially faces.