The Gap, H&M, and Benetton are the three most comparable competitors of Inditex. The most interesting company to compare with Inditex is The Gap. It has 5 times higher net operating revenues than Inditex in 2001. ROE measures a firm's efficiency at generating profits from every unit of shareholders' equity. However, comparisons between their ROE shows that The Gap incurred a -0.3% net loss while Inditex achieved a 22.9% return on investment. The case shows that The Gap outsourced more than 90% production while Zara has its own factories and half of its productions are kept in-house, which means The Gap has insufficient control over production and capital costs. That is to say, Inditex is much more profitable than The Gap and has a relatively better operating economics.

Zara has several distinctive features in its business model that has affected its operating economics. Firstly, it manufactures most of its fashion sensitive products internally under a just-in-time manufacturing system. In order to control the manufacturing process and to allow information flow more smoothly, it centralizes its design and production facilities in its home office. It produces about 11,000 distinct items every year, compared with 2000- 4000 items for key competitors. They shipped these products twice a week to reduce its inventory holding costs. Its short cycle time reduces working capital intensity and facilitated continuous manufacture of new merchandize, even during the biannual sales periods. Also, under its unique information system, its designers can not only constantly contact with the stores, but also communicate waith store managers to get some subjective impressions of the fashion trends. Moreover, Zara sources fabric, other inputs, and finished products from external suppliers, especially China. This gives Zara a competitive advantage towards the costs of goods sold.