...stakeholders. Rapidly changing society, technologies and trends make the big fashion companies to propose not just a brand but also a fast fashion brand accessible to all eager customers. One of companies “…that introduced the idea of fast fashion some two decades ago, then developed a highly centralized and often studied—but rarely duplicated—design, manufacturing, and distribution system” (Berfield & Baigorri, 2013) is Zara International. Zara International belongs to, “…Spanish retail giant Inditex owns some of Europe's most popular clothing stores and is rapidly expanding around the world” (Inditex Group (Zara), n.d. para.1). After releasing the company Zara International by Index Group, parent company, Zara’s brand becomes one of the most popular in clothing industry worldwide and continues to keep the position despite of the fierce competition. The study case Zara International: Fashion at the Speed of Light would reveal and emphasise the main characteristics of the popularity and particularity of the fast fashion industry through analysis some of the aspects and rules of the Spanish company, Zara International. DISCUSSION OF FINDINGS It is well-known that every organization would like to excel in some criteria specific to their sphere of activity. Due to fast changing trends, the management should acknowledge that they should continuously improve and motivate all working parts of the company. Because the main purpose of an organization is to achieve the established objectives...
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...5 7 Technological 6 8 Environmental 6 9 Legislative 8 10 Conclusion 8 References 9 Introduction The global apparel market is a consumer-driven industry. Also, globalization and new technologies have allowed consumers to have more access to fashion. As a result, consumers are changing, competition is fierce, and companies are evolving to meet these demands. Zara, a Spanish-based chain owned by Inditex, is a retailer who has taken a new approach in the industry. With their unique strategy, Zara has the competitive advantage to be sustainable. In order to maintain that advantage and growth they must confront certain challenges and face traditional retailers in the apparel industry. So, now our group will analysis the PESTLE of Zara Company. (Lopez & Fan, 2009) Overview Zara is one of the largest international fashion companies and belongs to Inditex, which is one of the largest fashion retailers worldwide. Inditex operates in textile design, distribution and manufacturing. (Inditex, 2011 b) Zara operates in 78 countries worldwide with 1557 stores in the world’s largest cities. (Inditex, 2011 c) The company is founded in 1975 by Amancio Ortega, located in Spain and had in 2010 a net sale of 8.088 million of euro. (Inditex, 2011 a) The have worldwide 1557 stores in 78 different countries. (Inditex, 2011 a) Aim: democratize fashion, offering latest fashion, medium quality and moderate price (Lopez & Fan, 2009) Structure: customer oriented...
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...ZARA Word count: 3799 Table of Contents Executive summary 2 Zara background 3 External factors and competitive forces 3 PESTEL 3 Porter’s 5 4 Internal factors 6 Resources and capabilities 6 Manufacturing 8 Logistics 8 Public relations crisis and their effect on peformance 8 Evaluation of strategic options and recommendation 10 References 12 Appendixes 13 Executive summary This project aims to provide an in-depth analysis of external and internal factors affecting performance of world leading retailer Zara. First of all, the brief background on Zara is provided in order to familiarise reader with the business model they implement. Secondly, the PESTEL framework is utilised as the base for analysis of external environment and its potential effects on company’s performance. Further, the Porter’s 5 forces are identified in order to assess where the competitive advantage stems from. After assessment of external environment, this paper provides the overview of internal factors which might be crucial for success, as well as drawbacks of Zara’s internal organisation. Assessment of internal environment starts from the evaluation of Zara’s resources and capabilities, followed by the critical analysis of manufacturing and logistics processes. Further discussion of the PR issues and its effects on company performance is provided. In addition, the benefits of corporate socially responsible policies are discussed. Overall conclusions on Zara strategic...
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...Faculty of Business Studies Business Functions in Context I B203A -- Second Semester 2015-2016 Tutor Marked Assessment Managing Marketing Channels: Zara | One global retailer is expanding at a dizzying pace. It's on track for what appears to be world domination of its industry. Having built its own state-of-the art distribution network, the company is leaving the competition in the dust in terms of sales and profits, not to mention speed of inventory management and turnover. Wal-Mart you might think? Dell possibly? Although these two retail giants definitely fit the description, we're talking here about Zara, the flagship specialty chain of Spain-based clothing conglomerate, Inditex. This dynamic retailer is known for selling stylish designs that ' resemble those of big-name fashion houses, but at moderate prices. "We sell the latest trends at low prices, but our clients value our design, quality, and constant innovation," a company spokesman said. "That gives us the advantage even in highly competitive, developed markets, including Britain." More interesting is the way that Zara achieves its mission. FAST-FASHION—THE NEWEST WAVE A handful of European specialty clothing retailers are taking the fashion world by storm with a business model that has come to be known as "fast-fashion." In short, these companies can recognize and respond to fashion trends very quickly, create products that mirror the trends, and get those products onto shelves much faster and more frequently...
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...Zara: IT for Fast Fashion Abstract The case describes a discussion Zara Executives are having whether to update or to keep the current IT equipment of its stores. It goes into detail how the company works and that speed and adaptability are its key objectives. Finally the advantages of both options are shown, leaving it to the reader to decide which option is the best. Company Zara, based in La Coruna, Spain, was found in 1963. Since 1958 they are part of Inditex, a Holding Company atop several clothing retail chain. In 2002 they had about €3.9 billion in revenue and a net income of €438 million, with 11% net margin. Zara is the biggest retailer of the holding with 550 of the 1558 stores from the Inditex companys. Moreover it is responsible for 73,3% or Inditex’ revenues, coming 46% from Spain, with Fance as the second-largest market. Zaras woman sector has 60% contribution to its revenues; men and the fast-growing child sector both 20%. Product/System The store employees work with great autonomy and responsibility. They can choose which items they want to order from a given offer, which was chosen by the Product Store Manager. Each department gets new items 2 times a week. Commercials organize that orders and produced items match and decide in case of a mismatch which store gets the items. Zara does all of the production processes in Spain and Northern Portugal, making it possible that the time from design conception until it can be in store is as little as three weeks. Business...
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...outsourcing is denied by Zara. This is a good approach towards owned working force and not to get involved in activities that may lead to unethical concerns. Organization has developed a smooth image for quality management process implications in industry and now it is time to unleash new domains for organization. It is not recommended that company should start activities in outsourcing that may led to questions and confusions in current quality management and employee relationship management, but a healthy process that leads to internationalization should be considered. Another option that has been followed by management in last years is to become eco friendly and development of such sales points. The Inditex group has achieved eco-efficient and friendly certificates; a major one is LEED (Leadership in Energy and Environmental design). LEED is a famous and one of the acknowledged certificate and Inditex had got it for Zara Barcelona. Inditex management has mentioned this in its mission statement and following this objective will create a competitive advantage. Competitors are in process of getting this milestone and the group has to make new plans and create more benchmarks in this eco friendship race. Zara has spread a common concept of fast fashion. New style ranges are frequently introduced in market and thus Zara is moving parallel to market trends. Sales persons at stores with PDAs communicate and inform “The Cube” so fast that enables Zara to respond market...
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...income attributable to the parent company Cash flow 3,258 2,522 1,946 1,932 2,613 2,966 2,290 1,741 1,732 2,540 Financial and management ratios ROE ROCE 28% 37% 30% 39% Other relevant information Number of stores Net openings Number of markets with commercial presence Number of employees % men/women Overall energy consumtion (Tj) Number of suppliers Social investment (in millions of euros) 5,527 483 82 109,512 20.5/79.5% 3,381 1,398 14 5,044 437 77 100,138 19.5/80.5% 3,230 1,337 11 Highlights Sales 13,793 12,527 9,435 10,407 11,048 10,000 7,500 15,000 12,500 5,000 2,500 0 2007 2008 2009 2010 2011 Sales by geographical Rest of Europe 45% Spain 25% America Asia and the rest of the 12% world 18% Net profit 2,500 1,946 1,741 1,258 1,262 1,322 2,000 1,500 1,000 500 0 2007 2008 2009 2010 2011 Number of employees 0 20,000 40,000 60,000 80,000 100,000 120,000 2011 2010 2009 2008 2007 79,517 109,512 100,138 92,301 89,112 Inditex´s Annual Report addresses its economic, social and environmental performance for the purposes of achieving the maximum transparency in its relationship with all its stakeholders annual report 2011 index 06 54 Letter from the Chairman | 08 Business model | 10 A look back over 2011 Customers Milestones for the year. International presence | 22 Suppliers | 70 Employees | 84 Retail formats. Zara. Pull&Bear. Shareholders. Economic ...
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...World’ is ZARA. Fashion is more than clothing; it’s a part of our live. We live in Fashion. ZARA is a member of the INDITEX group, a Spanish group. ZARA have established its stores all over the world, Europe, America, the Middle East, Asia Pacific and among its 5000+ stores (from the INDITEX group), Hong Kong shares 8 ZARA stores from the whole wide world. Zara offers the latest trends in international fashion in an environment of thought-out design. Its stores located in the main commercial areas of cities across the Europe, America and Asia, offer fashion inspired in the tastes, wishes and lifestyles of today's men and women. Zara’s clothing has identified a significant underserved segment within it. Zara’s clothing is uniquely positioned to serve this segment of the market because of its fast paced fashion ideas, its latest technology, its efficient business strategies and its affordable prices. Due to the growing of the clothing industry and the enormous unmet need in the clothing market we see the long-term expansion and potential of Zara throughout the world. We are visionaries who see Zara as an extreme financial launch. By achieving its sales targets, Zara will position itself for exceptional profitability and self-funded growth. ZARA’s Plan is to maintain and develop its position in the market by giving well in time response to changing trends in consumer tastes through creating new designs that are suitable for all customers at an affordable price. “Zara constantly...
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...storage and logistics. A great deal of focus in operations is on efficiency and effectiveness of such a process. An example of successful operations strategy in the retail industry is the strategy employed by Zara which is discussed in this critique. Zara started as a single shop in La Coruna and then rapidly spread its wings to 68 countries; opening a store each day - one of the fastest global expansions the world has ever seen. Throughout the entire system of Zara’s business; designing, sourcing, manufacturing, distribution process and retailing come out a number of success factors: short cycle time, small batches per product, extensive variety of product every season and heavy investment in information and technology. This elements feature in every aspect of the business. 2. Introduction. Zara is the flagship brand of the Spanish fashion retail giant, Inditex, (Industrias de Deseno Texti S. A.) Founded in 1975 ; this super- heated performers in soft retail fashion market in recent years; is engaged in textile design, manufacturing and distribution .The group operates approximately 1500 stores .The company primarily operates in Europe, where about 80% of its sales are made with La Coruna , the city that saw its earlier operations, home of its central offices. Zara contributes about 2/3 of the company’s sales making it undoubtedly the firm’s growth engine. As other retailers like Marks and Spenser and Gap join...
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...Zara: IT for fast fashion Case Analysis The case for Zara shows a simple method of "if it's not broken, and works for us, then we'll use it" mentality. This case views Zara's business strategies and how IT supports their business decisions. Zara is in the clothing apparel business, owned by Inditex (Industria de Diseno Textil), which is a holding company that owns Zara and other retail chains. In their business model, Zara focused on three things: (1) responding quickly to customer demands and fashion trends, (2) decentralizing decision making, hence allowing store managers to make decisions about clothes and trends for each specific store, and (3) provide customers with clothing that is "trendy" and not mainstream. Zara continuously provides new clothing lines throughout the year, introducing approximately 11,00 new items, whereas their competitors averaged around 2,000-4,000 items per year. Zara focuses on a specific customer base that is loyal to their clothing. Their customers know that if an item is in the store, then they will have to purchase it right then and there, otherwise it will not be available later. Zara's clothing is not designed to be sturdy, as they are intended to be only worn 10 times, to keep up with fashion and trends. Therefore, the typical Zara customer visits their stores on average 17 times per year. As for Zara's IT structure, they implement their technology to complement each process of their trendy business and decentralized company...
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...CASE STUDY ZARA 1. Which theory is internationalization? the best representative of Zara’s (Inditex’s) In the case of Zara, the Uppsala model can be considered as the best representative theory concerning their internationalization strategy. The Uppsala model is an organic growth model, which aims to minimize psychic distance through small incremental steps in the internationalization process. Zara opened its first store in La Coruna in 1975 and focused on the domestic market in the early stages. Gaining experience from the home country before entering a foreign market is characteristic for the Uppsala model. The expansion of Zara was first limited to Spanish cities with more than 100,000 inhabitants. Due to the maturity of the Spanish market, Zara was aiming to expand to the international market. Because of the geographic and cultural proximity to Spain they started their foreign operations by opening a store in Portugal. This enabled a gradual learning-by-doing process, concentrating first on countries close to Spain. Subsequently they preceded the internationalization process by entering different European markets. The intention was to keep a low level of psychic and cultural distance in order to internationalize step-by-step. After obtaining more knowledge and experience in foreign markets, Zara started expanding to other regions more rapidly and out of consideration for geographical or cultural proximity. In general, the internationalization strategy of Zara can be best...
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...MIS Chapter 3 ZARA: Fast Fashion from a savvy system 3.1 Introduction: -Zara is the largest pure play fashion retailer -does not believe in advertising -keep huge swaths production in house -went from 2.43b in 2002 to 20 billion in 2012 -fastest global expansion, the fashion industry has ever seen. Opening 1 store a day and now in 88+ countries -high quality but inexpensive. Gaps downfall -chose wrong styles colors - took 3 CEOS to straighten out Contract Manufacturing: a Lower cost at what cost -outsourcing production to third part firms. Companies who use contract manufacturing don’t own the plants or the employs who produce the goods in the plant. -Leads to: sweatshop labor, bad safety regulations, etc.. -GAP got protested for the Bangladesh accident, even though they were not part of the Rana plaza accident -tech can be used to prevent this. EX: Nikes in house information system to track audits of its 100’s of suppliers along dimension such as labor and environmental practices. 3.2 Don’t Guess Take Data: Personal digital assistants - handheld computing devices meant largely for mobile use outside an office setting—to gather customer input, staff regularly chat up customers to gain feedback on what they’d like to see more of. -would you like that skirt longer length? Etc.. Point of Sale System - a transaction processing system that captures customer purchase information—showing how garments rank by sales. Ex: cash registers and check out systems ...
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...Zara: Staying Fast and Fresh Wance Tacconelli Donghua University Shanghai Contents • • • • Historical background Overview of the Inditex Group Zara’s business model The competitive landscape – The Gap, H&M, Fast Retailing (Uniqlo) • Zara’s global store and online expansion • Questions Zara Case Study 2 Corporate history (1 of 2) • 1963: establishment of clothing production company in A Coruῆa, Spain • 1975: first Zara store opens in A Coruῆa • 1985: Inditex Group is established • 1989: first international Zara store opens in Portugal Zara Case Study 3 Corporate history (2 of 2) • 1990s: acquisition of brands Massimo Dutti and Stradivarius • 2001: Inditex IPO • 2006: first Zara store opens in China • 2010: first Zara store opens in India • 2010: Zara launches first online store Zara Case Study 4 Inditex’s performance indicators, 2012 • Net income totalled 2.3 billion euros, an increase of 22% from 2011 • 6,009 stores, 482 more than a year earlier • Online store network covers 23 markets, with new launches in China and Canada • Creation of 10,802 new jobs in 2012, bringing workforce to 120,314 employees Zara Case Study 5 Inditex Group Brand Portfolio (1 of 8) Zara • Fashionable, yet affordable clothes for a wide range of people, cultures and generations, who, despite their differences, all share a special fondness for fashion • 1751 stores in 86 countries • www.zara.com Zara Case Study 6 Inditex Group Brand Portfolio (2 of 8) ...
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...1. Inditex/Zara history (Explain) Amancio Ortega Gaono began Inditex as a way to bring high fashion apparel to the market at an affordable price. After years working in the apparel retail industry in la Coruña, Spain, Ortega left his job in the early 1960’s to being manufacturing trendy designers pieces in cheaper materials and selling these items to local shops. In 1975, Ortega opened his first retail store, Zara, drawn by its inexpensive, fashionable merchandise, and Ortega expanded the Zara chain quickly. 1980’s Ortega joined with computer expert Jose Maria Castellano to design a highly responsive supply chin that could quickly produce the latest fashions. A team of designers would replicate popular items, nearby factories would produce them, and they would be shipped from a central warehouse to stores. In 1985’s, Ortega restructure the company and named it Industria de Diseño Textil S.A., o Inditex. In 1990’s, Inditex expanded internationally and diversified its brand portfolio. Zara had added childrenswear, and four new brands had been added to the portfolio; Pull & Bear, Massimo Dutti, Bershka and Stradivarius. 2. How important is Zara for Inditex group internationalization process? Explain and make comments Mainly, Zara is the first brand that Inditex had, it have been successfully accepted into the market in different countries and provide a huge opportunities to Inditex to grow up continuously. The limited market growth opportunities at home was the...
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...ZARA The Zara boutique-clothing store on Calle Real in the northern Spanish city of La Coruna is buzzing. Customers have made the journey here on a rainy Saturday morning to see what new exciting styles are available this week. The red tank tops and black blazers seem to be a hit, but customers also really like the beige and bright purple ones too. Faces with this problem most fashion companies would normally have to spend months retooling and restocking their range. Not Zara, however. Each store manager is able to spot these changes in trends and then type them into their handheld computer on Saturday in the safe knowledge that they will arrive on Monday or Tuesday the next week. There is a very strong link between store managers and the central design team based at Zara’s head office in La Coruna in northern Spain. Each store is electronically linked back to head office so that they can view and assess sales on a real-time basis. This allows the company to make sure that they can adapt quickly to customer wants and desires. One example of this was a new khaki skirt that the company initially just stocked in Spain to see how it would sell. In the Coruna store it was sold out after only having been on the shelves for a couple of hours. After speaking to Barcelona, it was apparent that sales were brisk there too. It was then decided that the skirt should be tested out elsewhere, so overnight Zara sent out 7,800 skirts to more than 1,300 stores worldwide. The results were clear...
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