INDIVIDUAL ASSIGNMENT 1. What makes Zara different from other specialty apparel retailers? What are the main differences in the business models of Zara and H&M? Zara’s greatest strength and at the same time the difference from other specialty apparel retailers lies in its supply chain ‚ which allows Zara to turn over new styles in a fraction of the time ( three weeks ) it takes conventional retailers. It is interesting how the two leading fashion retailers ( Zara and H&M ) have totally opposite
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Admiration Project (ZARA) 9.19.12 So what is Zara? Many people have probably never heard of the clothing/fashion brand named Zara. Even if you have heard of Zara‚ the chances of you seeing Zara on any poster or television advertisements is very slim. In fact the Spanish clothing retailer has a very unusual marketing strategy. Zara has a “zero advertising policy.” With almost no money going into advertisement‚ how is Zara able to compete with competitors? Unlike competitors‚ Zara only spends about
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ZARA Fashion 1) With which of the international competitors listed in the case is it most interesting to compare Inditex’s financial results? Why? What do comparisons indicate about Inditex’s relative operating economics? Its relative capital efficiency? Note that while the electronic version of Exhibit 6 automates some of the comparisons‚ you will probably want to dig further into them? The four companies shown above have very different business models. Inditex owned much of the production
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Recommendations The best way for Zara to maintain their sustainable growth is to seek new opportunities in the apparel market. With changing consumer behaviors as a result of globalization‚ and U.S. department stores suffering‚ there are growth options available for specialty retailers like Zara. Zara has the opportunity to be one of the trendiest/low priced retailers that America has seen recently. Zara should most likely develop a second central distribution center in the Americas to decrease
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Zara’s financial performance? Since only Inditex historical financials are shown in the case‚ we took the financials of Inditex to describe Zara’s financial performance. It is reasonable to take Inditex financial data because Zara made up 76% of Inditex’s sales in 2001. Zara (Inditex) Financial Performance in 1996-2001 1996 1997 1998 1999 2000 2001 Liquidity Ratio (current ratio) 0.81 1.00 0.88 0.87 0.90 1.02 Leverage Ratio (debt/ equity) 1.98 1.84 1.97 1.98 1.80 0.75 Profitability
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Equity (CBBE) (Keller‚ 2008) Salience Zara is a well-known and ranked number one clothing brand in Spain‚ and it is the brand chain store of the Inditex Group owned which ranked number three in the world (INDITEX Group‚ 2012). Zara used fast fashion model – limited and variety. Zara resist a trend within the worldwide industrial- product manufacturing in low-cost area. That prove its product has a certain quality. Related to fast fashion‚ Zara has asserted that it only needs 2 weeks time to
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T.K.Maxx and Zara are very different retailers in the fashion industry. Whilst one offers low cost designer labels the other retails quality own-brand labelled clothes at a reasonable price. Zara sets itself apart from the giant market place by celebrating its motive to offer exactly what the customer wants‚ going to detective levels to make sure they understand their audience’s wishes. T.K.Maxx on the other-hand distinguishes itself by reducing prices of designer labels by up to 60%‚ and these are
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expected to show high resistance in response to it. Even though Zara has a decentralized decision making process‚ the retailer’s IS department exercises absolute autonomy on the IT infrastructure and design. The fact that “only one person had left the department” in the past 10 years further confirms that the retailer is suffering from cognitive and action inertia‚ and thus creating a huge barrier for such upgrade. Nevertheless‚ Zara should still perform such upgrade in the long run. Q1b. Should
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ZARA RESOURCES Tangible resources Financial resources: Inditex‚ the parent company of Zara had a net profit in 2011 of 1.73 billion euros: a jump of 32% of its net profit of 2010. Physical resources: Moreover Zara has 507 stores around the world with a total selling area of 488‚400 m² and 1‚050 million of Inditex’s capital invested into them. It also owns a 130‚000 m² warehouse closed to its headquarters in Arteixo‚ Spain. Zara also purchased 20 factories that were highly automated
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activity‚ and the implementation of the change in all its complex technological‚ human‚ and organizational dimensions". (Davenport‚ 1993) ZARA ZARA is founded in the year 1975 and owned by Amancio Ortega‚ in La Courna. Inditex is probably the world ’s fastest growing clothing retailer with over 3‚100 stores around the world in over 70 countries and the Zara format taking around 1‚000 of those stores. In March 2006‚ the group overtook Sweden ’s Hennes & Mauritz (H&M) to become Europe ’s largest
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