Zara Supply Chain Case Study
Introduction
Zara is a fashion retailer established in 1975 by the Spanish group Inditex founded by Amancio Ortega Gaona. Inditex runs over more than 5400 stores worldwide and owns brands other than Zara such as Massimo Dutti, Breshka, Oysho, Pull and Bear and Stradivarius. Inditex headquarters are located close to La Coruña in northwestern of Spain. The old shipbuilding town of La Coruña seems an unlikely home to a tech-‐charged innovator in the fashion industry. But that’s where the Inditex Corporation built its headquarter called “The Cube”.
Zara’s Business Model and Its Success Factors Zara is the most profitable (75% of Inditex total profit) brand of Inditex with 2,044.7 million euros in 2000. Zara has developed a business model based on following criteria: 1. 2. 3. 4. 5. Short lead-‐time Scarce supply Large varieties of style and colors Limited Advertising Cost High turnover
The brand succeeds to make moderate prices with a large choice of new clothes every time. Zara’s short lead-‐time system depends on continuous exchange of information throughout every part of Zara 's closed loop feedback system (Figure 1). This chain goes from customers to
Zara is a fashion retailer established in 1975 by the Spanish group Inditex founded by Amancio Ortega Gaona. Inditex runs over more than 5400 stores worldwide and owns brands other than Zara such as Massimo Dutti, Breshka, Oysho, Pull and Bear and Stradivarius. Inditex headquarters are located close to La Coruña in northwestern of Spain. The old shipbuilding town of La Coruña seems an unlikely home to a tech-‐charged innovator in the fashion industry. But that’s where the Inditex Corporation built its headquarter called “The Cube”.
Zara’s Business Model and Its Success Factors Zara is the most profitable (75% of Inditex total profit) brand of Inditex with 2,044.7 million euros in 2000. Zara has developed a business model based on following criteria: 1. 2. 3. 4. 5. Short lead-‐time Scarce supply Large varieties of style and colors Limited Advertising Cost High turnover
The brand succeeds to make moderate prices with a large choice of new clothes every time. Zara’s short lead-‐time system depends on continuous exchange of information throughout every part of Zara 's closed loop feedback system (Figure 1). This chain goes from customers to