...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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...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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...INTERNATIONAL MARKETING CASE STUDY ZARA: THE SPANISH RETAILER GOES TO THE TOP OF WORLD FASHION Professor: Jennifer Stack Student: Martina Sekuloska San Sebastian October,2014 International marketing [ZARA:THE SPANISH RETAILER GOES TO THE TOP OF THE WORLD FASHION] INTRODUCTION Inditex is a fashion retailer which dates back to 1963 when it started life in a small workshop making woman’s clothing. Today it has more than 6.460 stores all over the world (Inditex, 2014). Officially it all started with the launch of the first Zara store in La coruña, north-west of Spain in 1975. At that time the textile maker Amancio Ortega decided to open his own store after years of work in the textile industry. This was followed by the brand’s internationalization at the end of the 1980s and the successive launch of several another retail concepts: Pull&Bear, Massimo Duti, Bershka, Stradivarius, Oysho, Zara Home and Uterqüe. Today, Inditex is considered to be the greatest fashion retail group, and its founder Amancio Ortega, the richest person in Spain. Zara is the flagship chain of the Inditex Group which generates nearly 65% of the net sales of the group (Inditex annual report 2013). It encompasses many different styles, from daily clothes, to more formal elegant clothes for women, men and children. This case study tackles the challenges of being the world’s fashion retailer, the sustainability of the competitive strategy, and the group’s internationalization process. ...
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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 uses a mixture of strategies when sourcing their production. It uses most of outsourcing to produce basic items and initial fashion collection. It outsources about half of its production to third party (of the outsourced 60% from Europe, 30% from Asia, 10% rest of world). The sourcing strategy with external suppliers is based on expertise, relative cost, transportation cost and most importantly time sensitivity. At the beginning of each season Zara commits 50-60 % of its inventory, while quarter of the season collection is made available at start of season. Competitive advantage for Zara by using the sourcing strategy: 1. Being able to produce at lower costs 2. Flexibility to use in-house production following fashion trends 3. Better meet consumer demand (able to produce more of the popular products) 4. No need to discount a large amount of product at the end of the season (ultimately leaving few unsold products at the end of the year) Zara maintains extremely low inventory of finished products to increase the regulatory visits of customers in one season. No inventory is held in the central warehouses and there was almost no inventory at the stores that was not on the selling floor. Zara relies immensely on direct communication between retail stores to give direct feed back to the designers. Second distribution centre is built for more distribution capacity of inventories. Zara is now implementing a radio frequency identification (RFID) system that...
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...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 several...
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...Executive Summary Zara has relied on Personal Digital Assistants (PDA’s) and Point of Sales (POS) terminal operating on Microsoft DOS which are not linked to the headquarters or other stores for its daily transactions. Although, the system has proved to be stable and reliable over time, it has become obsolete and cannot be supported by the providers. I recommend that the company invest on a new system like Windows, UNIX or Linux operating system which will enhance connectivity and flexibility in operations and information flow. Investing in a cutting edge technology though may be capital intensive initially; it will ultimately improve efficiencies across board and provide new learning opportunities for the entire workforce. Introduction Zara is a division of the Inditex group, a multinational clothing retailer and manufacturer with headquarters in La Coruna, Spain. Inditex operates in a `fast fashion` industry and in an environment where consumer demand was notoriously hard to forecast. The first Zara store was opened in 1975 near the factory. Today, Zara has over 650 stores spread across 50 countries around the world located in luxury shopping districts that attracts well-heeled customers. As part of an integrated group that includes, fabric, dye making and computer aided (CAD) cloth making factory, Zara contributes over 73.3% of the group’s sales in 2002 fiscal-year and the most profitable. Almost half of Inditex revenue is gotten in Spain while...
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...Zara International is considered a high end clothing store that is affordable. Due to its quality in fashion, low prices and immediate availability, popular stores such as Gap and H&M fail to keep up with Zara’s success. Zara’s well known tactic of fast fashion has separated them from their competition. The ‘fast fashion’ objective is to distribute top trends of fashion within the runway to customers by selling them in local stores. Zara has been able to achieve the fast fashion perspective by hiring approximately 200 people that will assist in getting these trends out in stores within a matter of weeks. Zara International adopted the classical management style by abiding by the five administrative principles. This company was able to ‘foresee’ its successes by creating a plan they could achieve in the future. So far, Zara has been able to keep up and surpass its top competitors. In one year, the company was able to bring in $2 billion of revenue. Secondly, Zara arranged an ‘organization’ that allowed them to obtain the resources in order to foresee their company. They understood the demand for the quality and quantity of workers to be able to uphold their mission of the fast fashion technique. Not many retailers are savvy enough to create and/or imitate trends within a matter of weeks, get the items to their stores within a matter of hours, sell at an affordable price and restock these items as needed; Zara has been able to accomplish all of these. By doing so, the stores...
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...ZARA Case Study By Chander Shekhar Sibal (WMP 6015) A Case Study submitted in fulfillment of the assignments for MIS WMP 2013 [pic] Indian Institute of Management, Lucknow Noida Campus 2011 Zara Case Study Q. 1. Zara is successful in managing IT. Using your learning’s from the case, explain how Zara is able to get productivity benefits from IT The firm tripled in size between 1996 and 2000, then skyrocketed from $2.43 billion in 2001 to $13.6 billion in 2007. By August 2008, sales edged ahead of Gap, making Inditex the world’s largest fashion retailer1. While the firm supports eight brands, Zara is unquestionably the firm’s crown jewel and growth engine, accounting for roughly two-thirds of sales2.The blend of technology-enabled strategy that Zara has unleashed seems to break all of the rules in the fashion industry. a) Efficiency in Design teams Rather than create trends by pushing new lines via catwalk fashion shows, Zara prefers to follow with designs where there’s evidence of customer demand. Data on what sells and what customers want to see goes directly to “The Cube” in La Coruña, where teams of some 300 designers crank out an astonishing 30,000 items a year. b) Speed of execution in bringing a new product idea to store & response to change In the fickle world of fashion, even seemingly well-targeted designs could go out of favor in the months it takes to get plans to contract manufacturers, tool up production...
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...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, the management...
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...Arab Open University 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...
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...党的群众路线教育实践活动个人对照检查材料 邹光明 党的群众路线教育实践活动开展以来,本人通过学习教育，深刻认识到开展为民务实清廉，以整风精神，反对形式主义、官僚主义、享乐主义、奢靡之风，落实党的“八项规定”是增强党员队伍的纯洁性和先进性的重要举措.按照镇党委统一部署，查摆问题，相互谈心，对照职工群众反映的各种问题，结合工作实际开展批评与自我批评。以“正衣冠、照镜子、洗洗澡、治治病”为总要求。通过这次活动从中感觉到自身在遵守党的政治纪律、加强党风建设以及“四风”方面还存在很多不足，有许多地方有待进一步提高。针对自己实际情况，认真反思，努力整改，现将情况分析对照检查如下。 一、遵守党的政治纪律和加强作风建设情况 （一）遵守党的政治纪律情况 做为一名党员干部和乡镇工作者，深知党的政治纪律是党的生命线。因此本人在以党员标准严格要求自己的同时，坚持党的领导，坚持党的基本理论、基本路线、基本纲领、在思想上政治上行动上乡党委保持高度一致。努力做到自觉遵守、严格执行，坚决维护党的政治纪律。在工作中，能够较好地执行党的方针、路线、政策，自觉执行民主集中制原则和维护班子团结。自觉用党章规范自己的一言一行，做到政治信仰不变、政治立场不移、政治方向不偏。 在工作中自觉以身作则，严格要求自己。严格遵守党的政治纪律，自觉同党中央和各级党委保持高度一致，坚决贯彻落实党的路线、方针、政策；能够自觉按制度和规定贯彻落实各项，做到令行禁止、政令畅通，给自己身边的人当好模范，真正发挥党员的模范和带头作用。 作为一名党员，对照纪律要求，存在一些不足：一是对放松自身的学习和修养，对自己学习要求不严，学习不认真；二是学习流于形式，在党的大政方针的学习上存在着不够深入，不够及时和不够具体等现象；二是在工作中存在着在对党的路线、方针政策，宣传贯彻不到位。 （二）加强作风建设情况 认真贯彻中央八项规定、转变作风，加强作风建设。一是全面认真学习了中央八项规定，深刻领会中央八项规定精神和各级领导讲话精神；二是通过观看警示教育片等，自觉自醒自律，遵守党风廉政建设规定和各项工作制度；三是紧密联系群众，联系实际，深入基层调查研究，系统掌握基层基本情况，真正了解群众所盼所想；四是严格落实公务接待制度和公务用车制度。 二、“四风”方面存在的突出问题 通过学习，本人在思想认识上虽有一定提高，在思想境界上有所提升，但对照党的群众路线教育实践活动的要求，特别是“四风”方面还有许多突出问题。 （一）形式主义 1、工作作风不扎实。开展党的群众路线教育实践活动要求乡干部每次都要亲自下基层走访，认为自己一直在乡下工作，群众工作做得很多了，自认为很了解群众的疾苦，放松了在思想上贴近群众，感情上亲近群众，行动上靠近群众。 2、群众工作不够扎实。下基层了解情况的少，不能从繁杂事务中解脱出来，不能深入到群众中调查研究，不了解群众困难，群众盼什么，有什么要求不知道，没有解决好密切联系群众的认识问题，对群众面临的实际问题不够了解，对一些问题没有及时发现和真正解决，没有深入基层进行扎实有效的工作。 3、平时不注重政治思想学习，集体组织的各项学习活动虽能按时参加，但平时学习的自觉性、主动性不强。学习内容不系统不全面，联系实际也不够紧密。。 5、对新问题、新情况、探索的不够。重视具体工作的少，没有充分发挥主观能动性，关注细节不够，致使实际工作达不到预期效果。 ...
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...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....
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...world's largest fashion retailers by owning eight brands - Zara, Pull & Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home and Uterque. There are over 6,700 stores worldwide. It is started as textiles maker by Amancio Ortega Gaona in a small workshop back in 1963. After 12 years, Inditex is official a dressmaker when the first Zara store is established in 1975, located in La Coruña, Spain. The main goal of Inditex is to offer highest quality products to all its customers. All Inditex processes are following their code of conduct where 4 main principle is applied. There are clear to wear and safe to wear, tested to wear, green to wear and right to wear. These are the foundations of the Group's environmental and sustainable strategy. To ensure the stability of the global operation, Inditex has 11 logistics centre for each of the brands to make sure the merchandise are distributed twice a week. There are new designs are coming out once a fortnight in Inditex. It is also one of the company that practicing fast fashion. In 2014, the net profit of Inditex had grown 5 percent to 2.5 billion euro (Spain. Inditex S.A.,2014). Inditex is maintaining the aggressive strategy in 2015. Alexander's (2015) article indicates that, Ortega's net worth hit $80 billion as stock in his holding company Industria de Diseno Textil (Inditex) reached an all-time high of 33.99 Euros per share. As mentioned above, the first Zara store is opened in La Coruña in 1975. In 2014, 64% of the...
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...Jeff Bolling MKTG 310 I 28 Apr 2011 WK 5 Zara Case Study 1. As completely as possible, explain the supply chain for Zara -- from raw materials to consumer purchase. 5 pts. Zara makes 40% of its own fabrics and produces more than half of its own clothes. Work that has to be contracted out is done by local companies to maximize time efficiency. Zara stocks all raw materials/ fabric, cuts its own fabric and contracts the sewing to local companies. By stocking the raw material, Zara cuts down on time for getting end product to consumers. Having all this material and labor done locally to include stocking end product and shipping via jets, to distant locations and by truck to local locations, has streamlined the logistical process for Zara and is a role model for new businesses. 2. Discuss the concepts of horizontal and vertical conflict as they relate to Zara. 4 pts. Horizontal conflict is conflict that occurs among firms at the same level as opposed to vertical conflict which occurs between different levels of the same channel. Zara has minimal vertical conflict due to headquarters receiving data from individual stores where 300 professionals carry out the designs. Individual store managers spot trends, send data to Zara headquarters and "shazaam" a new design is on the market sometimes in less than two weeks. This is a prime example of teamwork at its best and shows in Zara's bottom line profits. Zara's approach to design is closely linked to their customers...
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