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ZARA: Fast Fashion

A Written Analysis of the Case

Presented to the Faculty of School of Business and Governance

Ateneo de Davao University

E. Jacinto Street,8000, Davao City

In Partial Fulfillment of the Requirements for the Subject

MGT 428: Production and Operations Management

GODOY, EARL JOY A.

SUARIO, LEI ANGELA D.

TACADAO, VANESSA CAREM C.

TAR, KESSIA CAROL D.

TOREFIEL, CHRISTINE G.

December 11, 2014
I. Executive Summary

This paper presents the case analysis of Zara, the largest and most internationalized of Indetex’s chains. In 2001, it operated for more than 507 stores in countries around the world, including Spain. It is a Spanish clothing and accessories retailer based in Galicia, Spain; which is founded by Amancio Ortega and Rosalia Mera. The advantage of Zara is that in just a span of three weeks, it can have a new product on its shelves ready for their consumer to purchase compared to their competitors that required from three to, even, six months. Also, the first store opened in La Coruña proved to be a success, and Ortega saw the opportunity to expand to other cities around Spain and even cities around the world. Due to rapid expansion of Zara, they suffer loss which is supposedly evitable. Zara does not take into account the product demanded in a certain country. Zara should focused on careful interpretation of the demand in a certain country for them to know whether to expand or not in order to avoid failure loss.

II. Industry Analysis

Threats of Substitutes:

The three closest competitors of Zara are The Gap, H&M, and Benetton. The two largest specialist apparel retailers in the world, The Gap and H&M, owned most of their stores but outsourced all production. Benetton, in contrast, had invested relatively heavily in production, but licensees ran its stores.

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