Inditex Analysis

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1. Introduction to the firm and its market

Shops around the world
*Last update: 19/02/2008
Source: Inditex Website
Brand Quantity
Zara 1,134
Pull and Bear 520
Massimo Dutti 426
Bershka 510
Stradivarius 383
Oysho 293
Zara Home 205
Kiddy 's Class/Skhuaban 230
TOTAL 3,701
Inditex, as stated on its website, is one of the world’s largest fashion distributors: nearly 6 million of items were put on the market in 2006 (Figure 1). With eight sales concepts Zara, Pull and Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home and Kiddy 's Class they boast nowadays 3,701 stores in 68 countries, distributed as shown in Table 1.

In their own words: “Inditex’s philosophy -creativity and quality design together with a rapid response to market demands- has resulted in fast international expansion and excellent response to their sales concepts.”

In this assigment, I will try to provide some facts to support this strategy and to point out some exposures which could jeopardise Inditex’s future success.

Table 1: Inditex shops distribution
Since the first Zara shop (the most important concept of the group, with 72.3% of total Inditex sales in 2006) was opened in 1975, the company has expanded quiet heavily within the so called “Fast Fashion” clothing sector, especially from 2001 (Figure 1). In May of that year, Inditex made an initial public stock offering, and was by then, the world’s third largest clothing retailer.

No less significant is their strategy of diversification, which differentiates the business model of Inditex from other competitors like H&M. In parallel with its overseas expansion, Inditex has been continuously adding new brands to the original Zara. Some of them of new creation: Pull and Bear, Bershka, Oysho, Kiddy’s Class and Zara Home; other have been through acquisitions: Massimo Dutti and Stradivarius. The objective is to target different customer segments (Appendix 1).
The third main point in this introduction is Inditex’s

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