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
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Pre-course Assignment | International Business INTRODUCTION TO THE CASE Zara is a retail chain company which operates in the fashion industry. It's owned by Indixt group in North West Spain. It holds the ownership of some world famous brands such as Massimo Dutti, Pull & Bear, Oysho, Uterqüe, Stradivarius and Bershka. The very first Zara shop was open in 1975 and their specialty is frequent innovation of new product lines. Also they decided not to outsource their production to low-cost countries
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on the Spanish retail giant, Inditex and how its largest retail chain Zara has been so successful through its simple business model of speed, flexibility, and high fashion. As of 2002, Inditex had six separate chains: Zara, Massimo Dutti, Pull & Bear, Bershka, Stradivarius, and Oysho. Each chain operates independently and is responsible for its own strategy, product design, sourcing and manufacturing, distribution, retail. Zara is by far the largest, most profitable, and most internationalized of
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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
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Zara is a successful clothing and accessories retailer, it is the main brand of the INDITEX group (the largest apparel retailer). Its success is mostly based on its fast capacity to respond to the consumer needs after identifying them, which is mainly due to the information systems used by the organization. ZARA is vertically integrated. A narrow span of control allows it to control every step in the life cycle of the product. Despite its small IT force (0.5% of total revenues), ZARA manages to
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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
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manufactured or even supported by the manufacturer, there will come a time when growth will be limited by lack of available POS terminals that would work with their existing software and hardware. Because of the disastrous constraint potential that Zara faces by continuing to use an obsolete operating system, I would advise Salgado to upgrade Zara’s POS systems in the very near future. In order to methodically plan and implement this upgrade, I would advise Salgado to follow the innovation process
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Monitor and Control 16 Appendix A 17 Executive Summary Zara is a retail store of the Inditex group that started in 1975 and has now grown to 531 stores. Zara’s strategic business model focuses on product variety, speed to market, and store locations. The main business idea behind their model is to link customer demand to manufacturing and manufacturing to distribution which they have accomplished through vertical integration. Zara is currently facing the decision to either implement a new operating
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1a.What is innovative about Zara? • Marketing strategy: Zara is not popular because of advertising but by store locations, customer’s voice and their products successfulness in targeting toward the right audience. • Keeping up with current fashion: Customers can walk into Zara one day and find something complete new they would not have found the week before and will not be able to find the next. Zara is always changing styles to keep up with the latest fashion trends. For example, if they
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most of its production and purchase in large batches. Zara has made major capital investments in production and distribution facilities and uses them to increase the supply chain’s responsiveness to new and fluctuating demands. It produces complicated products in-house and outsources the simple ones (HBR). Zara’s supply chain allows it to get new product to all its stores across the world in 15 days. With a 15 day turn around, it allows Zara who only ships small batches of product to their store’s
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