INDITEX

Good Essays
INDITEX INTERNATIONALIZATION
PROCESS

Author: Rocío Sánchez Heres
Supervisor: Jens Vestergaard

Aarhus School of Business
MSc. in Finance & International Business
February / 2007

TABLE OF CONTENTS
ABSTRACT…………………………………………………………………………..3
1. INTRODUCTION………………………………………………………………..4
1.1.
BACKGROUND……………………………………………………………..6
1.1.1. Inditex brief history……….…………….…………………………...7
2. REASONS BEHIND INDITEX INTERNATIONALIZATION………………9
2.1.
DEFINITION OF INTERNATIONALIZATION……………..……………..9
2.1.1. Motives for Internationalization………………………….……...…10
2.2.
REVIEW OF RELEVANT THEORIES…………………………………….16
2.2.1. Traditional Internationalization Approach….……………………...17
2.2.2. Transaction Cost Approach / Internalization Theory…………..…..19
2.2.3. Eclectic Paradigm Theory…….……………………………………22
2.2.4. Product Cycle Hypothesis……………………….…………………24
2.2.5. Internationalization Process Model……………….………………..27
2.2.5.1. Uppsala Internationalization Model…………………..27
2.2.6. Network Approach…..…………………………………...………...35
3. WHY DOES INDITEX GO ABROAD..............................................................37
3.1.
Spanish Retailing Industry………………………………………………….38
3.1.1. Political / Legal factors………………….…………………………39
3.1.2. Economic factors……………………………………….………….40
3.1.3. Technological factors……………………………….……………...41
3.1.4. Socio - cultural factors……………………….…………………….41
3.2.
Competitive Advantage / Manufacturing Process…………………………..42
3.3.
Industry Analysis……………………………………………………………44
3.3.1. Porter’s Five Forces………………………………………….…….44
3.3.2. Actual Competitors………………………………………………...50
3.3.3. Demand………………………………………………………….…52
3.3.3.1. Market Share…………………………………………52
3.3.3.2. Demand Analysis ……………………………………56
3.3.4. SWOT………………………………………………….…………...58
3.4.
Why does Inditex go abroad?..........................................................................65
4. INDITEX INTERNATIONALIZATION PROCESS………………………..71
4.1.
Spanish Market towards Internationalization……………………………….71



References: -ACOTEX, 2005: “El Comercio Textil en Cifras”, Acotex annual report. -ACNIELSEN RESEARCH, 2003, Purchase influencers report. -ALIMARKET - Información económica sectorial, minoristas del sector textil, 2004 -AGARAWAL AND RAMASWAMI, 1992: “Choice of foreign market entry mode: -AHARONI, 1966: “The foreign investment decision process” Harvard Graduate School of Business Administration, Boston -ALBAUM, STRANSDSKOF, DUERR AND DOWD, 1989: “International marketing and export management”, Addison-Wesley, Wokingham -ALONSO, 1993: “Capacidades exportadoras y estrategia internacional de la empresa” Empresas y Empresarios Españoles en la encrucijada de los 90, Editorial -ALONSO, 1994: “El proceso de internacionalización de la empresa” Información Comercial Española, Revista de Economía, January, No -ALONSO, 2000: “Vistiendo a tres continentes - La ventaja competitiva del Grupo Inditex-Zara, 1963-1999” Fernando Ojea, Grandes empresas, grandes historias de -ALONSO Y DONOSO, 1994: “Competitividad de la empresa exportadora española”, Instituto Nacional de Comercio Exterior, Madrid. -ANDERSEN AND BUVIK, 2002: “Firm’s internationalization and alternative approaches to the international customer/market selection” International Business Review, vol. 11, pp. 347-363 -BARKEMA, BELL AND PENNING, 1996: “Foreign entry, cultural barriers, and propositions”, Strategic Management Journal, vol. 17, pp. 151-166 -BENITO, PEDERSEN AND PEDERSEN, 2004: “Export channel dynamics - An -BENITO AND GRIPSRUD, 1992: “The expansion of foreign direct investments: discrete rational location choices or a cultural learning process?” Journal of -BRADLEY, 1977: “Managing against expropriation” Harvard Business Review, July/ August, pp -BREWER, 2000: “International market selection: Developing a model from Australian case studies” International Business Review, vol -BURKLEY AND CARSSON, 1976: “The future of multinational enterprises”, Holmes and Mayer, New York -BUCKLEY AND CARSSON, 1985: “The economic theory of the multinational enterprise”, McMillan, London -BUCKLEY, 1988: “The limits of explanation: Testing the internationalization theory of the multinational enterprise”, Journal of International Business Studies, vol Nr. 2, pp. 181-183 -BUCKLEY, 1990: “Problems and developments in the core theory of international business” Journal of International Business Studies, Spring/Summer, pp. 43-59 -CÁMARAS DE COMERCIO DE ZARAGOZA, HUESCA Y TERUEL, 2003: -CANTWELL, 1995: “La globalización de la tecnología ¿Qué queda del modelo del ciclo de vida del producto?” Revista Economía Industrial, Nr - 102 - -CASSON, 1992: “Internalization theory and beyond” Buckley, P.J Directions in International Business, Edward Engar Ltd., England, pp. 4-27 -CAVES, 1971: “International corporation: the industrial economic of foreign investment”, Economica, Nr. 38, pp.1-27 -CAVES, 1982: “Multinational enterprise and economical analysis”, Cambridge University Press, Cambridge -CAVES AND MEHRA, 1986: “Entry of foreign multinational into U.S. -COASE, 1937: “The Nature of the Firm” Economica, Nr. 4, pp. 386-405 -CRICK AND CHAUDHRY, 1997: “Small businesses’ motives for exporting: The -CYERT AND MARCH, 1963: “A behavioral theory of the firm” Pentice Hall, Englewoods Cliffs, New Jersey -CZINKOTA, RONKAINEN AND MOFFET, 1996: “International business”, Harcourt Brace & Co., Florida -DAVIDSON, 1982: “Global strategic management” John Wiley and Sons, New York -DAWSON, 1994: “Internationalization of retailing operations”, Journal of Marketing thesis, Graduate School of Business Administration, Harvard -DURÁN, 2001: “Estrategia y economía de la empresa multinacional”, Editorial -DUNNING, 1980: “Towards an Eclectic Theory of International Production”, Journal of International Business studies, vol -DUNNING, 1981: “International Production and the Multinational Enterprise” George Allen & Unwin, London. -DUNNING, 1988: “The Eclectic Paradigm of International Production: A Restatement and Some Possible Extensions” Journal of International Business -DUNNING AND NARULA, 1994: “Transpacific foreign direct investment and the investment development path: The record assessed”, South Carolina Essays in -EL PAIS Newspaper - 25/10/2001, 11/01/2005 -ERRAMILLI, 1991: “The experience factor in foreign market entry behavior of service firms”, Journal of International Business Studies, vol. 22, pp. 313-327 -ERRAMILLI AND SHARMA, 2004: “Resource based explanation of entry mode -FABREGA, 2004: Zara, El modelo de negocio de Inditex, Claves de Gestión, Madrid -GERINGER, 1988: “Joint venture partner selection: Strategies for developing

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