Planeta Zara

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  • Topic: Inditex, Zara
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  • Published : April 27, 2011
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PLANETA ZARA|
Production Management|
Sara Landa Gonzalez|

TABLE OF CONTENTS

1. Inditex Group…………………………………………………………………...2 1.1 Strategies…………………………………………………………………...2

1 Zara…………………………………………………………………...3 2.2 Business Model…………………………………………………………...3 2.3 Competitive advantage…………………………………………………...3 2.4.1 Short lead time…………………………………………………...4 2.4.2 Lower quantities…………………………………………………...4 2.4.3 More styles…………………………………………………………...4

2 Operations Management…………………………………………………...4 3.4 Develop of goods and services…………………………………………....4 3.5 Process strategy…………………………………………………………...5 3.6 Location strategies…………………………………………………………...5 3.7 Human Resources……………………………………………………5 3.8 Layout…………………………………………………………………...6 3 Personal Opinion…………………………………………………………...6

Bibliography…………………………………………………………………...7

1. INDITEX GROUP
Inditex is a Spanish Corporation and one of the world’s largest fashion retailers. It is made up of almost a hundred companies dealing with activities related to textile design, production and distribution. Its eight store formats: Zara, Pull & Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home and Uterqüe; boast 5.044 stores in 77 countries. Amancio Ortega is the founder and current president. Of Inditex’s total employees, over 80% of them are part of the retail sales force and 8.5% are in manufacturing, design, logistics, and distribution. The remaining 11.5% are part of the corporate headquarters of Inditex, which is located in Galicia (Spain).

Higher profit margins than comparable retailers and a sustainable trend make Inditex very tasty and a good bet for most investors. The picture shows the Inditex financial year from, 1st February to 31st January, of the following year in millions of Euros.

1.1 STRATEGIES
Basically, the key of Inditex success is on its vertical strategy. What it means that it designs, produce, distribute and sell. It actually controls the manufacture of sophisticated, high-clothes design and outsources only the simple products, like t-shirts. Very strong vertical integration because is having a very quick response to fashion trends and consumer tastes: the fast fashion. To carry out this strategy Inditex needs to have a very flexible structure and this is achieve with a nearly full vertical integration, which not only shortens the time but also minimize the inventory. That’s why learning economy is essential for Inditex in order to achieve economies of scale and reduce costs.

2. ZARA
Zara is the most profitable brand of Inditex and the principal driver of its growth. After opening its first store in 1975 has expanded operations into 45 countries with 531 stores located in the most important shopping districts of more than 400 cities in Europe, the Americas, Asia and Africa.

2.1 BUSINESS MODEL
The core concept of Zara's business model is selling medium quality fashion clothing at affordable prices, and vertical integration but the main key is to respond quickly to shifts in consumer demands. It sells trend followed by customers so a heavy investment in information and communication technology is necessary to achieve it and also it has to make a huge production to be able to offer those prices. Nowadays there are a lot of designers and people chose according to their personality, Zara has understood this point making trend wearable for everybody and not doing extreme fashion.

2.2 COMPETITIVE ADVANTAGE
What sets Zara apart from its competitors is what is has done to its business information and business process. Rather than concentrating on forecasting accurately, it has developed its business around reacting swiftly. From the beginning responds to current needs or trends instead of a distant future forecasting. So especially in the area of product development, we find a significant Zara's...
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