zara case study
Case study I.1
Zara: the Spanish retailer goes to the top of world fashion
Zara (www.inditex.com) is a fashion retail chain of
Inditex Group owned by the Spanish businessman,
Amancio Ortega, who also owns brands such as
Massimo Dutti, Pull & Bear, Oysho, Uterqüe,
Stradivarius and Bershka. The Inditex group (of which
Zara is a part) is headquartered in La Coruña, northwest Spain, where the first Zara store opened in 1975.
It is claimed that Zara needs just two weeks to develop a new product and get it to stores, compared with a two-month industry average. Zara has resisted the industry-wide trend towards outsourcing fast fashion production to low-cost countries. Its most unusual strategy is its policy of zero advertising; the company prefers to invest a percentage of revenues in opening new stores instead.
Main shareholder of Inditex, Amancio Ortega
Source: Copyright © Inditex.
Zara’s business model
Zara is a vertically integrated retailer. Unlike similar apparel retailers, Zara controls most of the steps on the supply chain: it designs, produces and distributes itself. Zara is a fashion imitator and focuses its attention on understanding the current fashion trend, which is what customers want, and then delivering it, rather
M04_HOLL3160_06_SE_C04.indd 144
than promoting predicted season’s trends via fashion shows and similar channels of influence, as traditionally done by the fashion industry.
Of the products Zara sells, 50 per cent are manu factured in Spain, 26 per cent in the rest of Europe and 24 per cent in Asian and African countries and the rest of the world. So while some competitors (e.g.
Gap) outsource all production to Asia, Zara makes its most fashionable items – half of all its merchandise – at a dozen company-owned factories in Spain and
Portugal, particularly in Galicia and northern Portugal where labour is cheaper than most of western Europe.
Clothes with a longer shelf life, such as basic T-shirts,
Zara: the Spanish retailer goes to the top of world fashion
Zara (www.inditex.com) is a fashion retail chain of
Inditex Group owned by the Spanish businessman,
Amancio Ortega, who also owns brands such as
Massimo Dutti, Pull & Bear, Oysho, Uterqüe,
Stradivarius and Bershka. The Inditex group (of which
Zara is a part) is headquartered in La Coruña, northwest Spain, where the first Zara store opened in 1975.
It is claimed that Zara needs just two weeks to develop a new product and get it to stores, compared with a two-month industry average. Zara has resisted the industry-wide trend towards outsourcing fast fashion production to low-cost countries. Its most unusual strategy is its policy of zero advertising; the company prefers to invest a percentage of revenues in opening new stores instead.
Main shareholder of Inditex, Amancio Ortega
Source: Copyright © Inditex.
Zara’s business model
Zara is a vertically integrated retailer. Unlike similar apparel retailers, Zara controls most of the steps on the supply chain: it designs, produces and distributes itself. Zara is a fashion imitator and focuses its attention on understanding the current fashion trend, which is what customers want, and then delivering it, rather
M04_HOLL3160_06_SE_C04.indd 144
than promoting predicted season’s trends via fashion shows and similar channels of influence, as traditionally done by the fashion industry.
Of the products Zara sells, 50 per cent are manu factured in Spain, 26 per cent in the rest of Europe and 24 per cent in Asian and African countries and the rest of the world. So while some competitors (e.g.
Gap) outsource all production to Asia, Zara makes its most fashionable items – half of all its merchandise – at a dozen company-owned factories in Spain and
Portugal, particularly in Galicia and northern Portugal where labour is cheaper than most of western Europe.
Clothes with a longer shelf life, such as basic T-shirts,