Zalando is an online fashion and lifestyle store based in Berlin, Germany. The company was introduced in 2008 and since then, it grew and become the largest e-commerce fashion and lifestyle brand in Europe offering its services to 17 countries. The company has kept a high focus towards e-commerce and there are no physical outlets for the company in order to keep the cost low and offer the best value to the customers. Within 11 years, the company grew significantly in terms of revenue, products, and markets. The Ansoff matrix analysis for the Zalando is provided to understand this exponential growth of the company.
Market Penetration
Currently, the company is serving 29 million active customers through an e-commerce platform making a mark as online fashion retail. The company successfully and continuously penetrated over the years as the company had a revenue collection of 6 million euros in 2009. Since then the company went on achieving growth in revenue and revenue of 5378.9 million euros is collected by the company at the end of 2019 (Statista, 2019). It means that the successful penetration in the market has brought a massive growth in the revenue of the company. One of the positive aspects of the strategy by Zalando is its focus on market penetration despite having other growth strategies. Market penetration has helped the company to achieve larger sales by increasing minimal expenses of advertising only.
Product Development
Zalando started as a footwear company in 2008 in Germany but the company grew its products offering over the period of time by realizing the potential in the fashion and lifestyle industry. With the footwear, the company added the clothing products in its product line to develop and grow in terms of product development. With the internationalization of the company in 2012, the company further expanded its product offerings and become a retailer providing the solutions from head to toe for the people. The company is now offering beauty, cosmetics, shoes, apparels, and other related offerings to the customers to become a complete fashion and lifestyle online store for the customers. This wide range of product offerings has aided the company to turn its customers base into 29 million customers with such a massive level of revenues (Freno, 2017).
Market Development
According to Brehm (2019), the company was started in Berlin and the first market of the company was limited to Berlin only. The success in Berlin led the company to spread its services all over Germany. The success in the whole Germany laid the foundation for the internationalization of the company through e-commerce. With the passage of time, the company went to 17 different markets of Europe and expanded successfully in those markets. The massive hike in the revenues of the company is due to penetration but the market development has a significant role in such a hike and success. The number of customers is 29 million all over the Europe which is providing evidence for the success of the company in terms of market development. The top management of the company stayed focus on market development without opening a physical outlet. The distribution centers have been opened in different locations of Europe to keep the service speedy but there are no physical outlets for the company.
Diversification
Anatwine is a software company which is headed by the corporate group SuperGroup and Zalando has diversified itself by acquiring 20 percent share in the company. The company went for an unrelated diversification by understanding the importance of the software industry (Heinemann & Glaser, 2019). Although the company had this diversification but the overall focus of the company is not massive on the diversification growth strategies. The company has focused towards the product and market growth as this provide more exponential growth and strength to the company in comparison with the related and unrelated diversification.
The exceptional growth and success of the company through the application of growth strategies is the evidence of the importance of growth strategies. The sustainability of an organization internationally is directly linked to its application of growth strategies successfully. The growth strategies have enabled the organizations to keep growing and becoming larger making the small level competition irrelevant which keeps the suitability of the company high.
References
Brehm, K. (2019). The Future of Online Fashion Retail-A case study of Zalando SE (Doctoral dissertation).
Freno, A. (2017, August). Practical lessons from developing a large-scale recommender system at zalando. In Proceedings of the Eleventh ACM Conference on Recommender Systems (pp. 251-259).
Heinemann, G., & Glaser, L. (2019). Zalando wird kooperativ–das Partnerprogramm für Fashion-Marken und-Händler. In Handel mit Mehrwert (pp. 275-296). Springer Gabler, Wiesbaden.
Statista. (2019). Annual revenue of Zalando from 2009 to 2018(in million euros). Available at: https://www.statista.com/statistics/260450/annual-revenue-of-zalando/