INDITEX: Fashion Forward
ZARA, Spain’s most successful brand, is trying to go global
Inditex, one of the world’s two biggest clothes makers, is going to go to the world. This article “Fashion forward”is related to chapter 9. There is a saying from the founder of Inditex, which is flogging fashion is like fishing, fresh fish like a freshly cut jacket in the latest color, sells quickly and at a high price. Yesterday’s catch must be discounted and may not sell at all. Depending on this insight, Inditex’s main brand, ZARA, has become one of the biggest clothes makers in the world. Unlike the others companies’, Zara uses sources from Spain, Portugal, and Morocco. This makes the supply chain short, and they can react quickly about the customers’ buying behavior. Furthermore, they can sell their goods much faster than others. On the other hand, the other companies usually use sources from China, this is cheap. However, this long supply chain is hard to manage. During the time of sailing back the goods from almost half the world, the materials may have raised its price. And Zara has sold their products at full price in the beginning. Through this strategy, Inditex has earned 4 times more than the business began in 2001. Now, Inditex wants to go global with its high profit and its stable selling. In 2011, 70% of their sales are from Europe, which is their main income. But now, Europe grows slowly. On the other hand, the sales in Spain, they sold products with 25% discount, and it has stalled. Based on these reasons, Zara needs new markets. Going into China is like beginning in Europe for us, said the chairman of inditex. However, there are many difficulties they have to overcome. Though survey, Chinese office stuff prefer to choose slim fit style clothes. Also, Zara need to focus on the quality of clothes to convince the shoppers that Zara is luxurious enough to buy, because they were attacked by offering bad quality clothes. In contrast, to extend in the U.S....
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