Zara Fashion House

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ZARA
Introduction:
Inditex, founded by Amancio Ortega, operates six different chains: Zara, Massimo Dutti, Pull&Bear, Bershka, Stradivarius, and Oysho. Since 2006 when the case was written, Inditex has added Zara Home and Uterque to its collection. The retail chains were meant to operate as separate business units within a structure, which included six support areas and nine corporate departments. Each chain addressed different segments of the market, but all share the same goal: to dominate their segment using a flexible business model that could be expanded on an international scale. As the parent company, Inditex focused on providing the corporate services to its respectable chains so that they could accomplish their goals. As a global apparel firm, Inditex’s main development strategy for international expansion is to become the sole or majority shareholder. However, for small or culturally different markets, it extended franchising agreements to leading local retail companies. For countries with large barriers to entry and an appealing customer base, Inditex created joint ventures with the possibility of later buying out its partner. Despite the different approaches used to enter into the international market, Zara has shown that there is no impediment to sharing a single fashion culture. Zara, a key subsidiary of its Spain-based parent company Inditex, was established in Galicia, Spain in 1975. The brand provides an alternative outlook to the fashion retail business model by rejecting media advertising and blow-out sales, and maintaining the bulk of its production process in-house rather than outsourcing to low-cost countries. Despite the seemingly counter-intuitive business model Zara operates, it has become one of the leading fashion retailers in the world.

Conclusion:
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...
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