Words of Wisdom:

"If men knew all what women think they, would be twenty times more daring." - Jod

Higher Education

  • Date Submitted: 03/16/2014 10:32 PM
  • Flesch-Kincaid Score: 36.7 
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Abstract
Zara is one of the largest international fashion brands of Inditex. The company first opened in La Coruna in 1975, still lives by the simple idea of Amancio Ortega to link customer demand to manufacturing, and link manufacturing to distribution. The customer is at the heart of the business model. In 1985, Inditex became the holding company Zara and other retail chains, and Jose Maria Castellano Rios joined the company. Castellano and Ortega shared the same beliefs that quick response to customers, use of computers, and disintegrated decision-making were important to build the business.   Inditex operates 1,558 stores in 45 countries out of which 550 stores are a part of Zara chain. Zara generates a major portion of Inditex’s sales accounting for 73.3%. Zara offers a great choice of new style clothes for Men, Women, and Children along with moderate prices every time. The women clothing account for 60% of Zara’s revenue. Zara has developed the business model to sell the garments by following trends and styles, with virtually no advertising and trust the decision of a group of employees on what clothes should be in stores.   This case study paper presents the business analysis of Zara, the leading and the profitable brand of Inditex.   The case paper’s objective is to discuss the possibilities of Zara’s failure and how effective the company’s business model compares to its key competitors.   Also, it evaluates the effectiveness of the business model, reflecting on the company’s financial reports.  
Threats and Competitive Advantages
Zara’s plan to expand internationally on one hand and its standardized production line and strategy limited to current geographical base in Europe on the other hand could be a possible threat of failure to the company.   There are noticeable differences in cultural, social, political conditions across different countries and the difference in tastes, liking, and fashion across regions can also pose a threat of failure to Zara. For...

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