slightly longer lead times) H&M spends more on advertising H&M is more price-oriented However‚ the operating revenues of H&M are more similar to those of Inditex compared to Benetton and Gaps Question 1.2 – Operating Economics Comparisons indicate that: Inditex is less liquid than H&M‚ as it has more fixed assets and quick turnover Inditex is more efficient in generating a greater profit per euro of sales; that is because COGS and operating expenses are lower than those of H&M Mainly because
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interesting case study for many other retailers and fashion brands around the world. Zara is the flagship brand of the Spanish retail group‚ Inditex SA‚ one of the super-heated performers in recent years. When Inditex offered a 23 per cent stake to the to 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
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specifically the Asia region. According to Exhibit 8‚ 120 new Zara stores were opened outside of Spain in 2010. Despite the current centralized distribution model working well and at below capacity‚ continuous rapid expansion outside of Spain for Inditex brands (exhibit 8) would bring problems of; larger amalgamation of dispersed network pictures‚ greater demand and customisation for Zara offerings from consumers. This would further bring the effects of diseconomies of scale; increased transportation
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worth 20% of the internal mark for this unit. Case Study: Zara – Apparel Manufacturing and Retail1 Zara is a chain of fashion stores owned by Inditex‚ Spain’s largest apparel manufacturer and retailer‚ and a pioneer amongst fast fashion companies (usually companies which imitate the latest fashions with cheaper in-store versions). In 2007‚ Inditex reported sales of about 9.5 billion Euros from more than 3‚600 retail outlets in 68 countries. As of 2013‚ it had in excess of 6‚000 stores worldwide
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Pitman‚ London‚ pp. 77-98. Alexander‚ N. and Myers‚ H. (2000)‚ “The retail internationalisation process”‚ International Marketing Review‚ Vol. 17 Nos 4/5‚ pp. 334-53. Alonso‚ L. (2000)‚ “Vistiendo a tres continentes: la ventaja competitiva del grupo Inditex-Zara‚ 1963-1999”‚ Revista de Historia Industrial‚ Vol. 18‚ pp. 157-81. Berkeley‚ N. and Steuer‚ N. (2000)‚ “Comparative analysis of EU and national trends in the textile and clothing industry”‚ available at: www.stile.coventry.ac.uk/adapt (accessed
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According to Inditex‚ the Group ’s business model is characterized by a highly integrated vertical structure. In contrast to the model that has been adopted by competing international corporations‚ the Group handles all the processes required in the apparel industry—design‚ production‚ logistics‚ distribution to retail outlets—on its own. This model is based on a desire for structural flexibility and a belief that the customer should come first in every aspect of the company ’s operations. The main
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After Zara’s first Australian store in Sydney reportedly sold out 80% of its stock (worth $1.2 million) in its opening day in 2011‚ sales figures in 2014 have revealed slowing sales momentum and increasing costs. Using the Resource-Based View of the firm (RBV) (Barney‚ 1986‚ 1991)‚ critically evaluate the competitiveness of Zara within the Australian retail industry. The resource based view revolves around the notion of a firms tangible and intangible resources and capabilities allowing the firm
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ZARA: Fast Fashion. Harvard Business Journal ‚ 1-35. Inditex. (2013‚ September 18). Inditex’s net sales rise 6% to 7.7 billion euros. Retrieved November 28‚ 2013‚ from Inditex: http://www.inditex.com/en/press/press_releases/extend/00001019 Inditex. (2013‚ November 28). Our Team. Retrieved November 28‚ 2013‚ from Inditex: http://www.inditex.com/en/who_we_are/our_team Inditex. (2013‚ November 28). Timeline. Retrieved November 28‚ 2013‚ from Inditex: http://www.inditex.com/en/who_we_are/timeline Keller
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separation of important product factors. Consumers have differing tastes locally. * Steep competition- Firms like the Gap and Benetton were eagerly awaiting a chance to move on Inditex market share * High unemployment- High unemployment in their home markets makes it difficult to entice customers to spend. At this point Inditex is not acting in a manner consistent with slowing growth. * Seasonal boost- Due to increased sales‚ July and January historically marks increased costs of hiring hundreds
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interested in engaging in business with Inditex. In this part of the paper‚ through analysis of 4 key ratios and return on invested capital‚ we are going to discover some of the company’s drivers of sustained competitive advantage. The 4 key ratios will focus mainly on company’s liquidity‚ activity‚ solvency and profitability‚ while ROIC will show how well the company manages the capital invested in operations of the business. In order to measure ability of Inditex to meet its short term obligations
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