...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...
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...Inditex’s “multi-brand strategy”/”multi-store concept strategy” Inditex’s broad brand portfolio, which comprises eight brands, serves to reduce risk and refine the company’s targeting of specific customer groups. Inditex’s main fascias, Zara, Stradivarius and Massimo Dutti, have achieved high levels of consumer recognition. In 2008, Inditex introduced Uterqüe, its eighth brand. Inditex’s multi-brand strategy has helped it broaden its customer base, for example through the Bershka fascia, which has successfully attracted a younger generation. The principle of having a “multi-brand strategy” Basically, I agree with the principle of having a multi-brand strategy. In today’s highly competitive retail market, targeting a specific customer demographic might not just be the most efficient way to go. But being able to cater to a wide range of tastes and budgets, on the other hand might be more target-oriented. This seems to be especially true with relatively lower-cost items, in particular when there is little if any brand loyalty. Looking at several multi-brand companies, I can see that most exist in the B2C industries such as Inditex at hand but also for example Proctor & Gamble (FMCG), L’Oréal (cosmetics), Volkswagen (automotive) as well as Pfizer (pharma). Companies in B2C industries pay more attention to market segmentation than companies in B2B industries. Market segmentation is a good way to increase the company’s influence to consumers who make purchasing decisions based...
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...Billy Joel decided he wanted to learn to play the violin for his next set of concerts. He called a violin salesman in New York and asked if he had any for sale. The salesman stated he had a Stradivarius and a Guarnerius (two famous brands of violins) and offered to sell them to Billy for $80,000 and $24,000, respectively. Billy agreed, over the phone, to purchase the violins from the salesman and told him he would be in town the next week to pick them up. Billy didn't show up for two months, and when he entered the store, the salesman wasn't there. His wife, Margaret, was there in the store, however, and she had full knowledge of the deal cut between her husband and Billy. (She'd heard her husband whining, complaining, and wailing about Billy not showing up for the last 2 months – and she was really sick of hearing about it.) Billy asked to see the violins, and Margaret showed him both of them. Billy stated he would agree to pay $65,000 for both of them, and Margaret, knowing that they were counterfeits and only worth $2,000 AND realizing that their house was about to go into foreclosure, agreed to the reduction in price and sold Billy the two violins for $65,000. She gave him a bill of sale that she wrote out on a note pad on the counter, which said, "Paid in full. Strativarus and Granruius violans. $65,000. Chk # 4301 Billy Joel. Salesperson: Margaret Madoff." The notepad was one she had brought home from their last vacation to Las Vegas and was from The Flamingo hotel there...
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...1 Zara is perhaps the most globally recognised face of Spanish fashion group, Inditex. It is known for its focus on 揷heap chic?or 搃nstant fashion? The company抯 rise has been meteoric and, in early 2008, Zara became the number one clothing or apparel retailer in the world. With sales approaching Euro(€) 10 billion, it had overtaken GAP, the well-known US clothing retailer, even though Zara抯 sales had been at half the level of GAP抯 only four years previously. Zara is now one of a portfolio of fashion brands owned by Inditex including Pull & Bear, Massimo Dutti, Bershkas, Stradivarius, Oysho, Zara Home, Uterque and Tempe. By the end of 2011, the Inditex group had over 5,500 stores in over 82 countries with 109,000 employees and 437 net store openings across the group in the preceding year. Zara continues to lead the growth of the group with over a hundred net openings in 2011 and contributing to over two-thirds of the Inditex group抯 turnover in the same year. Zara now has 1080 stores in Europe, 207 in America, and 344 in Asia & the rest of the world. Despite its global expansion, Zara derives around 30% of its revenues from Spain, and 47% from the rest of Europe with American and Asian markets each accounting for 11.5% of total revenues. Early Origins Zara抯 founder is Amancio Ortega. After an early career as a clerk in two clothing retailers, Ortega set out to create his own garment manufacturing company at the age of 27 in 1963. By 1975, he had opened his first Zara store. Zara抯...
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...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...
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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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...is the number one of in his field, the low cost market, one of their biggest skill is that they need only one week to develop a new product and get it into the stores of all around the world and other brands need six months to do it. Also they work with an unusual strategy with zero advertising, they prefer to save money to open new stores in different places. The idea of a lot of consumers is that Zara is fashion imitator with very cheap prices compared to the most fashion brands. Main Competitors Mango Bershka H&M Massimo Dutti Pull and Bear Stradivarius Uniqlo United Colors of Benetton Zara will have a lot of competition specially with their direct competitors but they are the number one brand of low cost clothing. The majority of the direct competitors like Pull and Bear, Massimo Dutti, Bershka or Stradivarius belong to the same group Inditex, so that make it easier for Zara to be the number one brand in his field. The different brands from the list are direct competitors because they work in the same field as Zara, the clothing and accessories sales of low cost prices and they also sell to the same type of customer. Zara has also indirect competition will be other clothing brands that have different type of customers, or at least customers look for better quality products with a much higher price, Zara follows quite carefully this brands because a lot of times they copy the same or a very similar...
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...Zara: the Spanish retailer goes to the top of world fashion’ Case Study 7/31/2015 0 Comments Introduction Zara (Inditex) is one of the successful fast fashion retailers under Inditex Group founded in 1975 owned by Ortega a Spanish businessman who owns 1830 stores in 82 countries and it is a vertically integrated retailer, controlling most of the steps on the supply chain (designs, produces and distributes itself). Pull & Bear, Massimo Dutti, Berksha, Oysho, Zara Home, Stradivarius, Uterque are the other multi-brands which come under Inditex itself. Low inventory cost, short lead time, quick response to the market, store is the main promotional tool, quick delivery and sales has made Zara’s business model distinguish among other competitors in the fashion industry -Inditex’s multi-brand success in 2011 -Sales growth of three giants in the fashion industry (including H&M and Gap Zara’s main competitors) Key success factors of Zara - Short lead time - More styles - Pricing strategy - Sell stocks in short term - Broad target market through multi brand portfolio - Quick respond to the market 1) Which theory is the best representative of Zara’s (inditex’s) internationalization? The internationalization practice of Zara started with the opening of a store in Oporto (Portugal) in the year 1988, through this establishment...
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...Zara Marketing Management Company background and relevant financial information The Inditex (Industria de Diseño Textil) is a clothing manufacturer group founded in Spain in 1985 by Amancio Ortega Gaona. This group is owner of Zara and from the 1990s launched other firms such as Pull & Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home, Zara Kids, and Uterqüe (see Table 1 in Appendix Section). With this wide brand selection, Inditex is actually able to satisfy women, men, and children needs in an international context. In fact, Inditex group, through the years, expanded to 6,104 stores in 86 countries spreading over Africa, Asia, Europe and America, and it has become one of the biggest fashion retailers in the world, operating in textile,design, manufacturing and distribution (Inditex, 2013). Even though the group has an international vocation, it has its head-quarter in the north-Western of Spain. Most of the corporate managers are Spanish, and roughly the 50% of the manufacturing is located in Spain or very close to it, as the factories in Portugal, and Morocco (Zara: Fast Fashion, Pankaj Ghemawat, José Luis Nueno). These mentioned evidences are useful to underline that the Spanish head-quarter exerts a strong influence on Inditex's world wide business model, and all the related global marketing strategies. The financial year 2012, Inditex was continued to show a really strong financial position. As the line chart 1 showed, at the year end of 2012, the net sales...
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...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, Gap Design, Make, Distribute - QUICKLY & CHEAPLY. 4 • ZARA Founded ‘75, BUT...
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...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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...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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...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 QUESTIONS AND ANSWERS 1. Which theory is the best representative of Zara’s (Inditex’s) internationalization? In order to be able to answer on this question...
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...Inditex Strategy Report Jessica Vincent Phillip Kantor Daniel Geller April 19, 2013 Contents Executive Summary ................................................................................................................................................ 3 Company Background ............................................................................................................................................ 4 Business Model....................................................................................................................................................... 5 Retail Subsidiaries..................................................................................................................................... 6 Company Background ............................................................................................................................................ 8 Financial Analysis ................................................................................................................................................. 11 Profitability & Shareholder Returns ........................................................................................................ 11 Revenues .................................................................................................................................................. 11 Costs .................................................................................................................
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...Introduction: Zara is a Spanish clothing and accessories retailer based in Arteixo, Galicia, and established in 1975 by Amancio Ortega and Rosalía Mera. It is the flagship chain store of the Inditex group, the world's largest apparel retailer. The fashion group also owns brands for example Massimo Dutti, Pull and Bear, Uterqüe, Stradivarius, Oysho and Bershka. Body: Supply Chain Management (SCM) is the success factor in fast fashion business. It deals with suppliers, with supplier’s suppliers, with customers and sometimes even customer’s customers. It looks at the process from raw materials origin to customer consumption. The output of supply chain is not just a physical product, but a combination of time, place, form and function of a product/service proposition . Q2 : Fast Fashion, as the name proposes, is modern fashion trend that appears in the market at a point and vanishes off within a short period of time and also takes a little time to be produced. Advantages of Zara 1. Short Production Time – ZARA can react quickly to recent trends and thus offers more fashionable clothes. Consequently, creates an incentive for the customers to visit the shops more often. 2. More styles – More choice, and more chances for ZARA of hitting it right. 3. Lower quantities – Scarce supply. A customer feels that he/she is going to wear something unique. Disadvantages of Zara 1. Zara’s focus largely lies on imitation of original products which misleads the customer. Those who are...
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