Free Essay

Inditex Analysis

In: Business and Management

Submitted By axelsz
Words 2232
Pages 9
Analysis Inditex Group
Unit Introduction- GBO
Group Award: Global Trade and Business
SCN: 0137219061
Candidate’s Name: Cristina Diaz Alama

HND Centre
Xianda College of Economics and Humanities
Shanghai International Studies University
Date: 2013/10/08

Assessment 1
Select a Global Business Organization and describe its development from inception through to its present status as a global trader.
Describe its expansion including any global acquisitions and mergers, and its business structure- whether centralized or decentralized.

1. Introduction Industria de Diseño Textil, S.A. (Inditex) is a Spanish multinational clothing company headquartered in Arteixo, Galicia, Spain. It is made up of almost a hundred companies dealing in activities related to textile design, production and distribution. Amancio Ortega, Spain's richest man, and the world's third richest man, is the founder and current largest shareholder. The current chairman of Inditex is Pablo Isla.
Inditex operates over 6,000 stores worldwide and owns brands like Massimo Dutti, Bershka, Oysho, Pull and Bear, Stradivarius, Zara, Tempe and Uterqüe, and also a low-cost brand Lefties. The majority of its stores are corporate-owned; Franchises are only conceded in countries where corporate properties can not be foreign-owned (in some Middle Eastern countries, for example).
The group designs and manufactures almost everything by itself, and new designs are dispatched twice a week to Zara stores.
Most manufacturing is now in low labour cost countries, mainly in Morocco, China, and Turkey, although much production continues in Spain and Portugal, particularly for its Zara brand. In addition, Inditex has a factory for shoe design, production and distribution in the town of Elche, on the Spanish Mediterranean coast.

2. Describe its development from inception through to its present status as a global trader. Describe its expansion including any global acquisitions and mergers.
The first Zara shop opened its doors in 1975 in A Coruña (Galicia, Spain), the city which saw the group's early beginnings and which is now home to its central offices. Today Inditex's stores can be seen in places like New York's Fifth Avenue, Milan's Corso Vittorio Emanuele II, London's Regent Street and Oxford Street, Frankfurt's Zeil, Shanghai's Nanjing West Road, Tokyo's Shibuya, Istanbul's, Seoul's Myeong-dong, and Vienna's.
In the 1990s, Inditex began creating or acquiring subsidiaries to manage different collections: Bershka, Pull and Bear, Massimo Dutti, and Stradivarius.
Inditex won the 2006 Wharton Infosys Business Transformation Award for their innovative and successful implementation of information technology to drastically decrease the time it takes to get new merchandise from the design stage to the in-store stage.
In 2010, Zara has sales of € 12.5 billion with only twice a year newspaper advertisements.
On 20 April 2011, opened the first Zara flagship in Australia. Thus, the Inditex group was present for the first time in 5 continents, and in 86 countries. Today Inditex is the biggest fashion group in the world.

Time Line of Inditex
2012
Zara shows its revamped image based on four guiding principles: beauty, clarity, functionality and sustainability. Simplicity is the byword throughout the store as part of Zara's mission to bring customers into direct contact with fashion. Inditex opens its first stores in Armenia, Bosnia-Herzegovina, Ecuador, Georgia and the Former Yugoslav Republic of Macedonia and reach 6,000 stores worldwide.

2011
Stores opened for the first time in Taiwan, Azerbaijan, Australia, South Africa and Peru, bringing Inditex Group's commercial presence to five continents. Inditex thus passed the 5,500-store mark, with shops in 82 markets. Building on its multi-channel retail strategy, the company launched online stores for all of the Group's brands and opened online Zara stores in the United States and Japan. At the company's General Shareholders Meeting, Pablo Isla was appointed Inditex Chairman and CEO.

2010
Inditex opened its first stores in Bulgaria, India and Kazakhstan, bringing its presence to 77 countries. Zara began selling its products online and by years end the online store was available in 16 European countries. At the Annual General Meeting of Shareholders, Mr Pablo Isla, CEO and Deputy Chairman of Inditex, presented the Group's new Strategic Environmental Plan.

2009
Inditex signs a joint venture with the Tata Group to open stores in India beginning in 2010. The Group debuts its first stores in Syria, while the concepts Stradivarius, Bershka and Pull & Bear open its first stores in China.

2008
Launch of Uterqüe, a retailer specialising in accessories and other fashion extras. Inditex reaches the 4,000-store milestone with an opening in Tokyo. The number of countries on its global store map rises to 73, following openings in Korea, Ukraine, Montenegro, Honduras and Egypt.

2007
Two new Spanish distribution hubs begin operating in Meco (Madrid) and Onzonilla (León). Zara celebrates the launch in Florence (Italy) of Zara shop number 1,000, while Bershka and Pull & Bear each pass the 500-store mark. The Group opens establishments in four new markets: Croatia, Colombia, Guatemala and Oman.

2006
Serbia, mainland China and Tunisia join the Inditex global store map.

2005
Inditex opens its first stores in Monaco, Indonesia, Thailand, the Philippines and Costa Rica.

2004
The Group unveils store number 2,000 (in Hong Kong), expanding its global footprint to 56 countries in Europe, the Americas, Asia and Africa.

2003
The Group celebrates its first store openings in Slovenia, Slovakia, Russia and Malaysia.

2002
Zara breaks ground on its new distribution hub in Zaragoza, Spain. The Group opens its first outlets in Finland, Switzerland, El Salvador, the Dominican Republic and Singapore.

2001
Launch of lingerie retailer Oysho. Inditex begins trading on the stock market on 23 May 2001. The Group opens its first shops in Ireland, Iceland, Italy, Luxembourg, the Czech Republic, Puerto Rico and Jordan.

2000
Inditex headquarters moves to a new building in Arteixo (A Coruña, Spain). The Group debuts in four new markets: Andorra, Austria, Denmark and Qatar.

1999
Inditex acquires Stradivarius, the Group's fifth retailer. Stores open in several new markets: the Netherlands, Germany, Poland, Saudi Arabia, Bahrain, Canada, Brazil, Chile and Uruguay.

1998
This year marks the launch of Bershka, a retailer aimed at young women and teen girls, and store openings in new markets: United Kingdom, Turkey, Argentina, Venezuela, United Arab Emirates, Japan, Kuwait and Lebanon.

1997
The Inditex store map expands to Norway and Israel.

1995-1996
Inditex acquires 100% of Massimo Dutti. The Group launches its first shop in Malta in 1995, and its first Cyprus establishment opens the following year.

1992-1994
Inditex continues to disembark in new international markets: Mexico in 1992, Greece in 1993, Belgium and Sweden in 1994.

1991
Retailer Pull & Bear is founded, and Inditex buys 65% of the Massimo Dutti Group.

1989-1990
The Group begins welcoming shoppers in the United States and France with stores in New York (1989) and Paris (1990).

1988
Zara opens its first store outside of Spain in December 1988 in Oporto, Portugal.

1986-1987
The Group manufacturers devote their entire output to Zara. The Group lays the foundations for a distribution system that can meet the needs of its expected rapid pace of growth.

1985
Inditex is founded as the holding company of the group of businesses operating at the time.

1976-1984
Zara’s approach to fashion is well received by the public, which prompts the retailer to extend its network of stores to major Spanish cities.

1975
Zara traces its roots to this year’s opening of the first Zara store on a street in downtown A Coruña, Spain.

1963-1974
Amancio Ortega Gaona, chairman and founder of Inditex, begins his career as a clothing manufacturer. The business grows steadily over the decade until Ortega owns several factories, which distribute their merchandise to other European countries.

3. Business structure
Inditex Group Philosophy
Getting the product the customer to the store, that is, to adapt quickly to fashion public begging.
The obsession of the last four years increasingly improve quality. Inditex has 36 designers who are in charge of designing the clothing enough so that the landscape of Zara stores are filled with news continuously.
Sell a modern design that the public needs with quality at an affordable price.
A perfect distribution system, just in time.
Operation of Inditex
It employs a dozen people on the phone with agents 4 continents stores, requesting and interpreting information that the customers are buying and how demand.
Another working group travels around the world visiting college campuses and nightclubs to see how young people dress. This information is also sent to the headquarters of Inditex, often using handheld computers capable of transmitting images.
Zara is vital to closely follow trends, because only manufactured with a very small advance of their collections. The process is capital intensive and labor. Remember that the traditional business apparel usually labor intensive but not capital. Zara has 250 designers and other employees in the area 14000 La Coruna. The clothes are moved by conveyor using underground rails 200 km long connecting the factories with the logistics center. Each garment has an electronic tag so that it can be mechanically packed and sent to the correct destination.

The Spanish sector status of the preparation in the boom years of age zara high rigidity, with two annual seasons "preset". This caused all the product that did not sell during the season came to rebates, which sold at a price much lower than the start, as the consumer know I could buy the same item on sale at a much lower price. Given this limitation the company to force the buyer to purchase goods in times of no sales, chose to try to change the mindset of the consumer, establishing a concept of "prêt à porter". That is promoting the idea of shortages and their short stay at the hotel. The renewal of stock in its stores twice a week was essential for achieving change this mentality that had prevailed throughout the twentieth century.
Once you have changed the mindset of the consumer, choose to adopt a structure based on operational and strategic flexibility.
Operational, because thanks to its vertical integration model got and get a reduced risk of fashion. No one fits in so short a time as possible zara trend changes. This designs all the products it sells in its stores.
Regarding the manufactured, about 50% is done directly in the factories of the group in Spain.
Strategic inditex because the model is the result of the development of new formats, as in the case of Zara, Bershka, Pull & Bear and Massimo Dutti. His philosophy is clear, to offer the most innovative at a reasonable price.
A few years ago the industry was dominated by companies with well-known brands, which usually design and fabric quality go hand in hand. Good design clothes was inaccessible to the vast majority of potential consumers: Zara entered the game with different rules. While most establishments to fashion changes meant problems for Zara were opportunities, as indeed stimulated and continues to stimulate, continuous fashion changes.
The new distribution system adopted by the company forced to take a new organizational form that totally differed from the previous. They seek a direct line of command in which the CEO or president, is the main figure, their responsibility is greatest and who is responsible for accepting or rejecting the last major decisions of the company, which obviously affect the smooth running thereof.
Between the president and the vice president found the staff or advisory body of the company shall advise in decision-making. It consists of the Secretary General, the responsible corporate and legal advice. At a lower level there is the vice president who oversees different departments such as: tax, financial, commercial, capital markets, corporate communications and internet.
Below this is the General Manager who is responsible for coordinating other corporate departments and systems administration and human resources, in addition to change business units and business support areas.
Thanks to these changes Zara can take less than one or two months to put an item in their stores, since it is designed, for about nine months it takes for half the competition, called the "time to market". Another management feature is its advertising policy rather "no advertising". Zara is only publicized when they start their sales.

4. References
Miguel Jiménez (13/03/2013). «Las ventas y los beneficios de Inditex baten todos los récords en 2012». El País. Consultado el 14 de marzo de 2013. http://www.lavozdegalicia.es/noticia/economia/2012/03/22/inditex-lider-mundial/0003_201203G22P32991.htm «Helena Revoredo y Rosalía Mera, ricas y poderosas». El País (18/01/2013). Consultado el 14 de marzo de 2013.
[Inditex, Memoria anual de 2010 http://www.inditex.es/es/accionistas_e_inversores/relacion_con_inversores/informes_anuales]
Hernández, Santiago (07 de 2011). El país (ed.): «El imperio Zara cambia de timonel». Consultado el 17 de julio de 2011. El Confidencial (ed.): «Trabajo esclavo en la India: tres empresas españolas están incluidas en la lista negra» (05 de 2012). Consultado el 23 de marzo de 2012.
Ethics (ed.): «Inditex, implicada en un escándalo de esclavitud en Brasil» (05 de 2012). Consultado el 6 de noviembre de 2012.
«Zara produce en condiciones de esclavitud en Argentina». Diagonal (17 de mayo de 2013). http://www.lavanguardia.com/economia/20110604/54165180236/turquia-nuevo-destino-laboral-para-los-sureuropeos-que-escapan-de-la-crisis.html http://www.abc.es/agencias/noticia.asp?noticia=1139449

5. Websites * www.excelsior.com * www.newswire.ca * www.galeon.hispavista.com * http://www.inditex.com/es

Similar Documents

Free Essay

Zara Business Assessment

...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 steps that are to be taken are suggested based on the conducted analysis of the internal and external characteristics of the environment Zara is doing business in. Zara background Zara is the flagship chain store of Spanish company Inditex Group which incorporates other brands such as Zara Home, Massimo Dutti, Pull and Bear,......

Words: 4312 - Pages: 18

Free Essay

Inditex Annual Report

...16 Global Reporting Initiative Indicators Letter from the Chairman Inditex business model 18 IP 53 IC 54 Inditex Commitment 163 Inditex Performance 20 26 28 46 Summary of 2009 financial year Milestones for the year Commercial concepts International presence 56 66 124 136 Customers, shareholders and society Corporate Social Responsibility Human Resources Environmental dimension 4 Inditex Annual Report 2009 164 LD 309 Legal Documentation 167 233 296 303 Economic and financial report Corporate governance report Activities Report Audit and Control Committee Activities Report Nomination And Remuneration Committee 308 Verification of the audit of GRI indicators 5 G lobal Reporting Initiative Indicators in 2002. Using this guide, Inditex With transparency as the fundamental principle in its relationship with society, Inditex has followed the Global Reporting Initiative indicators since it published its first Sustainability Report attempts to provide detailed, organised access to the information on its activity to all its stakeholders. Within the general indicators, specific indicators for the textile and footwear sector have been included, identified in the following way: Specific indicator for the sector Specific indicator comment for the sector 6 Inditex Annual Report 2009 Pages 14-15 267-273, 20-25 1. Strategy and analySiS 1.1 Statement from the most senior decision-maker about the......

Words: 42810 - Pages: 172

Free Essay

Pestle Analysis of Zara

...Assessment 1 Group Presentation PESTEL – Analysis [pic] Contents 1 Introduction 3 2 Overview 3 3 Business Environment 3 4 Political 4 5 Economic 4 6 Social 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......

Words: 1870 - Pages: 8

Free Essay

Inditex Group

...Analysis Inditex Group Unit Introduction- GBO Group Award: Global Trade and Business SCN: 0137219061 Candidate’s Name: Cristina Diaz Alama HND Centre Xianda College of Economics and Humanities Shanghai International Studies University Date: 2013/10/08 Assessment 1 Select a Global Business Organization and describe its development from inception through to its present status as a global trader. Describe its expansion including any global acquisitions and mergers, and its business structure- whether centralized or decentralized. 1. Introduction Industria de Diseño Textil, S.A. (Inditex) is a Spanish multinational clothing company headquartered in Arteixo, Galicia, Spain. It is made up of almost a hundred companies dealing in activities related to textile design, production and distribution. Amancio Ortega, Spain's richest man, and the world's third richest man, is the founder and current largest shareholder. The current chairman of Inditex is Pablo Isla. Inditex operates over 6,000 stores worldwide and owns brands like Massimo Dutti, Bershka, Oysho, Pull and Bear, Stradivarius, Zara, Tempe and Uterqüe, and also a low-cost brand Lefties. The majority of its stores are corporate-owned; Franchises are only conceded in countries where corporate properties can not be foreign-owned (in some Middle Eastern countries, for example). The group designs and manufactures almost everything by itself, and new designs are dispatched twice a week to Zara stores. Most...

Words: 2232 - Pages: 9

Free Essay

Bussiness Comucation

...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, the......

Words: 1581 - Pages: 7

Free Essay

Zara 2011

...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 Massimo Dutti. Bershka. Stradivarius. Osyho. Zara Home. Uterqüe. | 42 Community | 100 and financial report....

Words: 132690 - Pages: 531

Free Essay

Zara Case Study

...Zara Case Management 454 3/20/14 Founded in 1975 by Armancio Ortega, Zara is a very successful Spanish clothing and accessory realtor and the first business to start the Inditex Group empire. Starting in a small Galician city known as La Coruna in Spain, Zara has grown to be a retailer powerhouse with over 6,000 stores in 85 different countries. Although the number of stores and locations is constantly changing as Zara is known to open more than a store a day in past years. Zara has become the giant they are today because of their differentiated business model, this system has not been copied by any competitors which gives Zara a great competitive advantage. With its own production and distribution channels, Zara specializes in quick fashion innovations based on customer changing needs and is known to develop a new product or design and have it on store shelves in less than a month. Competition will generally do this same task in about 6 to 9 months. This competitive advantage has helped Zara to become a fashion leader and always stay a step ahead of competition. This also allows Zara to copy competitor new designs and come out with a slightly deviated version in just a couple weeks. This has competitors distraught as they spend enormous amounts of money on research and design just to have it instantly copied without costing Zara anything in research costs. This business model has allowed Zara to recently produce 11,000 distinct items in a recent year and......

Words: 2093 - Pages: 9

Premium Essay

Zara Journal

... the greater the demand for cheap products of its kind. — Georg Simmel, “Fashion” (1904) Inditex (Industria de Diseño Textil) of Spain, the owner of Zara and five other apparel retailing chains, continued a trajectory of rapid, profitable growth by posting net income of € 340 million on € revenues of € 3,250 million in its fiscal year 2001 (ending January 31, 2002). Inditex had had a heavily € oversubscribed Initial Public Offering in May 2001. Over the next 12 months, its stock price increased by nearly 50%—despite bearish stock market conditions—to push its market valuation to € 13.4 € billion. The high stock price made Inditex’s founder, Amancio Ortega, who had begun to work in the apparel trade as an errand boy half a century earlier, Spain’s richest man. However, it also implied a significant growth challenge. Based on one set of calculations, for example, 76% of the equity value implicit in Inditex’s stock price was based on expectations of future growth—higher than an estimated 69% for Wal-Mart or, for that matter, other high-performing retailers.1 The next section of this case briefly describes the structure of the global apparel chain, from producers to final customers. The section that follows profiles three of Inditex’s leading international competitors in apparel retailing: The Gap (U.S.), Hennes & Mauritz (Sweden), and Benetton (Italy). The rest of the case focuses on Inditex, particularly the business system and international expansion of the Zara chain that......

Words: 15226 - Pages: 61

Premium Essay

Zara for Fashion

...Managing Information Systems 2014-04-29 1 •Team 1 Approach • Inditex – Owners of the ‘Zara’ Franchise • Summary Overview • Fast Fashion – NOT Retailing • How ZARA / INDITEX works • Their system, organisation & focus points. • The QUESTION’s asked? What should ZARA do? • Should they do it? Why? • Value Chain & VRIN Analysis – (Inimitability is Key) • TOTAL Financial implications versus the Risk. • Diagnosis of Challenges & Recommendations. • People, Processes, Technology. • A Crisis of Coordination • Implementation strategy, communications and Stakeholder Management is KEY! • Summary 2 • ‘63 = House Coat Manufacturer, to Inditex in 2003 • Vertically Integrated Network (Production, DC’s, Retail) • €3.9billion Revenues, delivering €839.3m Op profits. • 1558 Hi-Profile OUTLETS. Stradivarius 10% Zara 34% Bershka 13% Oysho 4% • 8 successful Franchises, • ZARA 531 Stores = 34% - BUT, 75% Revenues • 85% of outlets in Europe, Spain 918. • Highly Profitable - Expanding Globally – FAST. • (Note – 2012 Accounts - €15.9b sales, €3.1b operating profits) Massimo Dutti 16% Kiddys Class 4% Pull & Bear 19% 3 • Fast Fashion Industry Overview • Moving designs from catwalk to store quickly, to capture current fashion trends. • In Store experience MUST be ‘trendy & interesting’ to drive regular visits. • Enables mainstream consumers to take advantage of current clothing styles at lower prices. • Brands Include, H&M, Zara, TopShop, Beneton,......

Words: 895 - Pages: 4

Premium Essay

Zara Project

...Cristina Neira Gabriela Muñoz SEARCH STAGE About INDITEX Industrias de Diseño Textil S.A (INDITEX) is a large Spanish corporation inside the fashion industry. This group is related with different companies that deal with activities involved in textile design, production and distribution. Amancio Ortega Gaona is the founder and chairman of INDITEX. INDITEX headquarters are located in Arteixo, a village in the province of La Coruña in Galicia, in the north west of Spain. It is there where almost all its merchandises are manufactured. With over 4,430 stores in around 73 countries, INDITEX owns brands like ZARA, Massimo Dutti, Bershka, Oysho, Pull and Bear, ZARA HOME, Kiddy’s Class (Skhuaban), Uterqüe and Stradivarius. These stores are mostly corporate-owned since franchises are only conceded in countries where corporate properties cannot be foreign-owned. Their management model, based on innovation and flexibility, and the company’s achievements, have placed INDITEX as one of the largest groups of fashion distribution. One of the strategies of INDITEX group is to understand fashion, creativity and quality design in order to provide an efficient answer to the demand of the market. This has allowed a fast international expansion and an excellent embracement of this proposal in all different brands that form part of the INDITEX group. About ZARA As mentioned before, ZARA forms part of the INDITEX Group owned by Spanish Amancio......

Words: 4670 - Pages: 19

Premium Essay

Zara Case Study

...retail trends - being in fashion and low prices - and making a very effective combination out of it. Much talked about, especially since its parent company's IPO in 2001, often admired, sometimes reviled, but hardly ever ignored, Zara has been an interesting case study for many other retailers and fashion brands around the world. We set out to understand what are the winning elements in Zara's business model, and probably only scratched the surface of the key to their success. Here's the quick-n-dirty on Zara's recipe for growth. case STUDY Zara is the flagship brand of the Spanish retail group, Inditex SA, one of the super-heated performers in a soft retail market in recent years. When Inditex offered a 23 per cent stake to the public in 2001, the issue was over-subscribed 26 times raising Euro2.1 billion for the company. What makes Inditex so tasty? Well, for a start, it seemed to show higher profit margins than comparable retailers, and secondly, the trend seemed sustainable. Good bet for most investors. The Awkward Factor in the Profitability Formula Buy low, sell high. Buy on credit, sell on cash. Retail profitability often seems like a no-brainer. If you sell at X dollars and buy at Y dollars, as long as your operating and financial costs are lower than the gross margin i.e. the difference between X (selling price) and Y (cost), you should be making money. And what with retailers running around with gross margins of 50-60 per cent......

Words: 3814 - Pages: 16

Free Essay

Education

...enter the Indian market in a joint-venture with Bharti Enterprises. Based on your analysis of Walmart’s global expansion up to that point, do you think it was a good idea to go to India? To select joint-venture as the mode of entry? 4. In general, what do you think is the best way to enter a new market: acquisition, joint venture, or greenfield investment? What are the location characteristics that affect this decision? What are the firm characteristics that affect this decision? What industry characteristics affect this decision? Zara – Fast Fashion Please assume you are a competent consultant of a very famous consulting company, such as Boston Consulting Company (BCG), McKenzie, or Monitor. And you are assigned to diagnose/evaluate the current strategy and to give recommendation(s) for the future growth of ZARA (or Inditex). You should submit your report to your boss on the day of the discussion. 1. Describe the characteristics of the industry in which ZARA compete. 2. What are the value(s) that ZARA? 3. What are the core features of the ZARA business model? And how do they affect its operating economics (or costs)? 4. How might ZARA fail? How sustainable would ZARA with its competitive advantage relative to other apparel retailers? 5. What are the key features of organizational form of ZARA? And what are the key features of the global structure(s) of Inditex?...

Words: 5922 - Pages: 24

Free Essay

Zara Case Study

...clothing store, his business model was simple: sell high-fashion look-alikes to price-conscious Europeans. After succeeding in this, he decided to tackle the outdated clothing industry in which it took six months from a garment’s design to consumers being able to purchase it in a store. What Ortega envisioned was “fast fashion”—getting designs to customers quickly. And that’s exactly what Zara has done! The company has been described as having more style than Gap, faster growth than Target, and logistical expertise rivaling Wal-Mart. Zara, which is owned by the Spanish fashion retail group Inditex SA, recognizes that success in the fashion world is based on a simple rule—get products to market quickly. Accomplishing this, however, isn’t so simple. It involves a clear and focused understanding of fashion, technology, and their market, and the ability to adapt quickly to trends. Inditex, the world’s largest fashion retailer y sales worldwide, has seven chains: Zara (including Zara Kids and Zara Home), Pull and Bear, Massimo Dutti, Stradivarius, Bershka, OYsho, and Uterque. The company has over 5, 618 stores in 84 countries, although Zara pulls in over 60 percent of the company’s revenues. Despite its global presence, Zara is not yet a household name in the United States, with just over 50 stores open, including a flagship store in New York City. What is Zara’s secret to excelling at fast fashion? It takes approximately two weeks to get a new design from drawing......

Words: 853 - Pages: 4

Premium Essay

M&S and Zara

...is crucial for companies in this industry to adapt to new trends and customer needs. M&S have a strong focus on consistent quality and high standards. They have been aware of technological factors and social changes within this market and have reacted in particular to the technological evolutions effectively, helping them to achieve one of their core competencies that is, quality. Driving forces in this industry proved difficult for M&S, globalization, the development of casual trends, and accelerating fashion cycles were major evolutions that became prevalent in the textile apparel industry, M&S were not reacting to these factors well and so they were becoming quite lost in their own market. Macro Economic Factors/PEST Analysis. Technological Issues The textile apparel industry is becoming to rely on technology for faster production systems and better quality products. We have seen that M&S have had a successful technological component to their organization, close co-operation with suppliers and the use of the latest technology has been the foundation for achieving the highest quality in their products. The fashion industry is going to keep evolving with the newest technology, it is vital that brands react to this macro-economic factor as it will be what may differentiate you from your competitors. Economical Issues A recession will have an enormous effect on M&S and this industry, along with their consumers. Costs will increase and prices......

Words: 1878 - Pages: 8

Free Essay

Zara Case Study

...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) Pull & Bear • Casual, laid-back fashion for......

Words: 967 - Pages: 4