INDITEX

INDITEX INTERNATIONALIZATION
PROCESS

Author: Rocío Sánchez Heres
Supervisor: Jens Vestergaard

Aarhus School of Business
MSc. in Finance & International Business
February / 2007

TABLE OF CONTENTS
ABSTRACT…………………………………………………………………………..3
1. INTRODUCTION………………………………………………………………..4
1.1.
BACKGROUND……………………………………………………………..6
1.1.1. Inditex brief history……….…………….…………………………...7
2. REASONS BEHIND INDITEX INTERNATIONALIZATION………………9
2.1.
DEFINITION OF INTERNATIONALIZATION……………..……………..9
2.1.1. Motives for Internationalization………………………….……...…10
2.2.
REVIEW OF RELEVANT THEORIES…………………………………….16
2.2.1. Traditional Internationalization Approach….……………………...17
2.2.2. Transaction Cost Approach / Internalization Theory…………..…..19
2.2.3. Eclectic Paradigm Theory…….……………………………………22
2.2.4. Product Cycle Hypothesis……………………….…………………24
2.2.5. Internationalization Process Model……………….………………..27
2.2.5.1. Uppsala Internationalization Model…………………..27
2.2.6. Network Approach…..…………………………………...………...35
3. WHY DOES INDITEX GO ABROAD..............................................................37
3.1.
Spanish Retailing Industry………………………………………………….38
3.1.1. Political / Legal factors………………….…………………………39
3.1.2. Economic factors……………………………………….………….40
3.1.3. Technological factors……………………………….……………...41
3.1.4. Socio - cultural factors……………………….…………………….41
3.2.
Competitive Advantage / Manufacturing Process…………………………..42
3.3.
Industry Analysis……………………………………………………………44
3.3.1. Porter’s Five Forces………………………………………….…….44
3.3.2. Actual Competitors………………………………………………...50
3.3.3. Demand………………………………………………………….…52
3.3.3.1. Market Share…………………………………………52
3.3.3.2. Demand Analysis ……………………………………56
3.3.4. SWOT………………………………………………….…………...58
3.4.
Why does Inditex go abroad?..........................................................................65
4. INDITEX INTERNATIONALIZATION PROCESS………………………..71
4.1.
Spanish Market towards Internationalization……………………………….71

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