INDITEX’S Operations

Overview

INDITEX (Industria de Diseño TextiL) is a Spanish cosmopolitan company that deals in clothing and textile. The company has its headquarters in Arteixo, Glalicia and is a composition of approximately a hundred firms that designs, produces and distributes textiles and other related products. INDITEX is the largest fashion group globally and runs over six thousand two hundred retail stores across the globe.

Is Protectionism Good? Why
Trade protectionism is the government measures and policies that tend to limit international trade with the intention of protecting local business entities, resources, as well as jobs from external competition. This can be achieved through enaction of import tariffs, tax subsidies on local businesses and other direct government interventions. Most countries use this when they feel that the local industries are being destroyed by an imbalanced competition from the foreign entities, and are normally politically driven. Protectionism is considered to be a good move by nations due to several reasons such as protection of a nation’s culture. It protects the culture from dilution.
Secondly, it protects young and upcoming companies from ‘dumping’, which is selling products at throw away prices than it should be in a bid to attract certain markets. Such companies enjoy the protection until the time they are able to compete fairly. The protection also extends to the local fully established industries since they are cushioned from international competition.
Protection of non-renewable resources- Non-renewable resources for example oil, are treated differently and the rules of free trade are normally disregarded. Most countries that plan in depending on these resources for a long period of time tend to limit the output through production quotas as a means of preserving the resources. Some nations also employ protectionism as a way of limiting environmental damage, e.g. from greenhouse gas emissions from enlarged production and transportation activities.
Check over specialization- economic analysts predict the perils of over-specialization which they say might happen as a result of maximizing on the theory of comparative advantage. Remaining as self-sufficient is a practical economic strategy considering the risks of world downturns as well as excess reliance on international trade.
Protectionism protects strategic industries such as food, energy, and water. The protection of these strategic industries is an unspoken aim of EU policy of creating food security across Europe by protecting the agricultural sector. Lastly, through protection of industries, protectionism will protect jobs in the short run though this is not likely to be indefinitely.
Threats of Competitors
Although Inditex faces competition from local retailers in most of its international markets, its three significant competitors were considered to be The Gap, Hennes & Maurits (H&M), and Benetton which are American, Swedish and Italian companies respectively. The three companies were seen as important competition to Inditex as they both a relatively slimmer vertical scope than Zara. Zara dominates most of the company’s production and most of the retail stores. The Gap is based in San Francisco and was founded in nineteen sixty nine.