Case Study Zara, Inditex

In: Business and Management

Submitted By dianahdzdiaz
Words 3098
Pages 13
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 main influence on Zara’s decision to expand internationally as recalled by Jose Maria Castellano, former CEO of Inditex: “Of course before opening the first store in the host market, we had the feeling and then we knew for certain that the Spanish fashion and design market was on the verge of saturation” (Martinez, 1997). In addition to the maturity of market, there was a change in Spanish…...

Similar Documents

Zara Case Study

...Zara: Fast Fashion Case Study IEOR 153 Logistics Network Design and Supply Chain Management Niko Katigbak Regine Labog Kevin Leung Ruoyun Li Miranda Ortiz Michelle Papilla Spring 2011 Professor Kaminsky UC Berkeley I. Background Inditex, founded by Amancio Ortega, operates six different chains: Zara, Massimo Dutti, Pull&Bear, Bershka, Stradivarius, and Oysho. Since 2006 when the case was written, Inditex has added Zara Home and Uterque to its collection.1 The retail chains were meant to operate as separate business units within a structure, which included six support areas and nine corporate departments. Each chain addressed different segments of the market, but all share the same goal: to dominate their segment using a flexible business model that could be expanded on an international scale. As the parent company, Inditex focused on providing the corporate services to its respectable chains so that they could accomplish their goals. As a global apparel firm, Inditex’s main development strategy for international expansion is to become the sole or majority shareholder. However, for small or culturally different markets, it extended franchising agreements to leading local retail companies. For countries with l arge barriers to entry and an appealing customer base, Inditex created joint ventures with the possibility of later buying out its partner. Despite the different approaches used to enter into the international market, Zara has shown that......

Words: 3538 - Pages: 15

Zara Case Study

...Zara Case Study Analysis Executive Summary This report provides and analysis and evaluation of the current IT operations of Zara, a segment of Inditex, and concludes with a decision whether to upgrade to a more modern operating system or not. When analyzing the company, many problems arose that centered on the company using an obsolete DOS operating system. Key problems found were that managers are spending too much time on ordering information. POS systems are not linked and therefor information cannot be shared between them. As a result, information regarding internal and external inventory cannot be accessed. Further analysis reveals that due to the increase in demand for more proficient, up-to-date operating systems, DOS has been replaced by many companies, leaving Inditex as one of their vendor’s only customers. Moreover, if their vendor is no longer provided with the DOS hardware, Inditex is left without and operating system. Inditex has the option of waiting until this threat becomes a reality, or to purchase the new operating systems now. The report evaluates these problems and concludes that it would be ideal for a new Windows operating system to be purchased immediately and implemented effectively within the next two years. It recommends that inventory systems be changed so that an actual on hand inventory count is known, interaction is allowed between internal POS systems as well as external nearby store inventory systems, and that the new system is widely......

Words: 2811 - Pages: 12

Zara Case Study

...Case Study on Zara: IT for Fast Fashion I. Executive Summary After reviewing Zara: IT for Fast Fashion, it is concluded that the problem the company is facing is their need to upgrade from their POS (point-of-sale) terminal system that uses a DOS (Disk Operating System) to a POS terminal system that does not run on DOS. Upgrading would allow the company’s stores to be interconnected and instantly check the stock of a certain SKU in another store. It is recommended that this upgrade be made before the company furthers their global expansion, specifically into Italy in order for the new stores to open with the new POS terminal system. II. Issue Identification The main issue Zara is facing is the operating system they are using. They are currently using POS (point-of-sale) terminals which run on DOS (Disk Operating System) that are no longer supported by Microsoft. If the hardware vendor decides to upgrade their machines in a way that they are no longer DOS compatible, Zara would not be able to open new stores until they switched to an upgraded system. III. Environmental and Root Case Analysis Other issues that are causing problems: * The communication barriers between the stores * Many difficulties with faxing order forms which led to the use of personal digital assistants (PDA). * However the POS terminals and PDAs do not contain information that can be transferrable to another store when they wanted to know about a particular SKU in stock. Employees...

Words: 1304 - Pages: 6

Zara Case Study

...Zara Case Study - Answer the following questions using both the case in the text and online research. Citations (within the text) and a bibliography are required. Be sure to provide an overview of the case in a short paragraph prior to answering each question. List the question you are answering prior to your answer. Vertical Supply Chain Zara uses a vertical supply chain, which is an uncommon strategy in the fashion industry. A company that operates in a vertically integrated strategy has total control of the various business activities, such as designing, manufacturing, sourcing, and to distribution to retail stores. This gives the company total business management. 1. As completely as possible, explain the supply chain for Zara from raw materials to consumer purchase. (5 points) Zara makes about 40% of their raw material (fabric) and produces more than half of its own clothes. (Kotler and Armstrong). The remaining 60% is outsourced from within Spain, mostly from the La Curuna. Designing of clothes at Zara is done by creative teams of over 300 professionals at the headquarters in La Curuna, Spain. (Supply Chain Brain). After the designers complete a design they are sent to Zara’s production system to cut the fabric. The design is then sent for sewing by one of several hundred local cooperatives. After sewing, the clothes are returned to Zara’s facilities for ironing by an assembly line of workers. After this, the items are wrapped and transported on......

Words: 1581 - Pages: 7

Zara Case Study

...Zara Case Study Zara is a clothing and accessories retailer owned by Inditex of Spain. It is the largest and most internationalized of Inditex's chains. Zara completed its rollout in the Spanish market by 1990 and then started its expansion around that time. At the end of 2001, it operated 507 stores in countries around the world, including Spain. Zara has three product lines which are for women, men, and children, and two basic collections each year that are phased in through the fall/winter and spring/summer seasons. Nowadays Zara is seen like a successful internationalized fashion company. One of the factors that help on Zara's success is its speed in producing. It takes about four week for new fashion idea to approach the retail stores and two weeks for modification of existing items. Besides, it makes the customers "buy now because you won't see this item later". Zara is trying to follow new trend with a limited number each product, so the scarcity of items urges buyers to get it as soon as they can. Hitting the sentiment of buyers is one of the most effective thing that helps Zara's items gone way so fast. Store locations are also important because they are located in highly visible locations, mostly including the premier shopping streets in a local market; together with significant centralization of store window display, it can easily promote its market image. Because of that, Zara spends less than its competitors such as H&M, The Gap, Benetton on advertising.......

Words: 696 - Pages: 3

Zara Case Study

...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 • Zara Case Study 6 Inditex Group Brand Portfolio (2 of......

Words: 967 - Pages: 4

Zara Case Study

...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. CASE......

Words: 3109 - Pages: 13

Zara Case Study

...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......

Words: 1618 - Pages: 7

Case Study - Zara International

...Jay Case Study: Zara International Fashion at the Speed of Light Question 1: In what ways are elements of the classical and behavioral management approaches evident in how things are done at Zara International? How can systems concepts and contingency thinking explain the success of some of Zara’s distinctive practices? Answer 1: Elements of the classical management approach are very evident at Zara International. The classical management approach contains three branches, which are scientific management, bureaucratic organization and administrative principles. Scientific management was expressed by selecting the workers with the right abilities for the job as well as time being the main factor instead of production costs and advertisements. For example Zara only spends 0.3% of sales on ads compared the competitors that spend roughly 3 to 4%. Next, administrative principles are displayed clearly through the control over design, distribution, production, and retail. In addition the clothing lines aren’t restocked and instead they become replaced by new designs to create a rarity value. Since shoppers will be unsure if the product will still be there next time they go back it will get shoppers to buy the item now. Lastly for the classical approach, bureaucratic organization exists through Zara’s clear division of labor and the organization runs smoothly because of it. However, Zara International also showed a few elements of the behavioral management approach. They focus...

Words: 680 - Pages: 3

Zara Solve Case Study

...Introduction to Zara (Inditex) Case Study In 1975, Amancio Ortega started a fashion retail shop that makes the fashionable clothes faster and beauty than other competitors. The first Zara store opened in 1975 in Spain. The very best quality of Zara was, it only takes two weeks to develop a new cloth/product and release it to the market while other competitors take two months. Zara didn’t get third party help to distribute, design or even produce because Zara did them alone. Zara was fashion focused producers that makes new clothes, apparels according to the trending fashion. Zara uses its own strategic method which is done by sending some employees to higher level venues, occasions, functions, clubs etc.Then the collected new designs and patterns will be forwarded to the headquarters. Although Store managers are used to report feedback, new demands that is given by the customers. These methods will help Zara to be the top among their industrial competitors. Although this method will helps Zara to manufacture more products than others, like 30,000 products annually while others are doing 10,000. Another unique quality of Zara is they don’t keep products that doesn’t sell for around 4 weeks and this trick make customers to come and see regularly on Zara stores that “What’s new?” With the development process of Zara become more and more popular and powerful on its industrial market. Hence Zara decided to enter the market with various brands. They were categorized......

Words: 435 - Pages: 2

Zara Case Study

...Reference Article from THIRD EYESIGHT © Devangshu Dutta, 2002 retail @ the speed of fashion By Devangshu Dutta The middle-aged mother buys clothes at the Zara chain because they are cheap, while her daughter aged in the mid-20s buys Zara clothing because it is fashionable. Clearly, Zara is riding two of the winning 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......

Words: 3814 - Pages: 16

Zara Case Study

...ZARA: FAST FASHION When Amancio Ortega, a former Spanish bathrobe maker, opened his first Zara 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...

Words: 853 - Pages: 4

Case Study for Zara

... Case study Zara 1. 1.  ZARA is a Spanish clothing and accessories retailer based in Arteixo, Galicia.  Founded in 24 May ,1975 by Amancio Ortega and Rosalía Mera.  Zara needs just two weeks to develop a new product and get it to stores, compared to the six-month industry average, and launches around 10,000 new designs each year.  Zara was described by Louis Vuitton Fashion Director Daniel Piette as "possibly the most innovative and devastating retailer in the world.  1763 stores , 78 countries worldwide.  Zara has continually maintain its mission to provide fast and affordable fashionable items .  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.  Zara welcomes shoppers in 86 countries to its network of 1.763 stores in upscale locations in the world's largest cities.  Zara's approach to design is closely linked to their customers. 2. 2. Around the world Zara 1.763 Zara Kids 171 Pull & Bear 817 Massimo Dutti 630 Bershka 899 Stradivarius 794 Oysho 529 Zara Home 364 Uterqüe 91 TOTAL 6.058 Inditex is a global specialty retailer that designs, manufactures, and sells apparel, footwear, and accessories for women, men and children through its chains around the world. Zara is the largest and most internationalized of the six retailers that Inditex owns. By the......

Words: 1804 - Pages: 8

Zara Case Study

...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......

Words: 839 - Pages: 4

Zara Case Study

...ZARA: History and Background Inditex is a global specialty retailer that designs, manufactures, and sells apparel, footwear, and accessories for women, men and children through its chains around the world. Zara is the largest and most internationalized of the six retailers that Inditex owns: (Zara, Massimo Dutti, Pull & Bear, Bershka, Stradivarius, and Oysho). By the end of 2001, Zara operated 507 stores around the world, including Spain. Of Inditex’s total employees, over 80% of them are part of the retail sales force and 8.5% are in manufacturing, design, logistics, and distribution. The remaining 11.5% are part of the corporate headquarters of Inditex, which is located in the region of Spain called Galicia. The role of the corporate center at Inditex’s headquarters is that of a “strategic controller” only, and is involved in setting the corporate strategy, approving the business strategies of the individual chains, and controlling their overall performance rather than as an “operator” functionally involved in running the chains. This gives Zara autonomy to operate independently and be responsible for its own strategy, product design, sourcing & manufacturing, distribution, image, personnel and financial results. With this freedom, Zara was able to make major investments in manufacturing, logistics, and IT, including establishment of a just-in-time manufacturing system and a 130,000 square meter warehouse close to its corporate headquarters. Zara......

Words: 2650 - Pages: 11