Case Analysis of
ZARA: Fast Fashion
This report is submitted to Prof. Devanath Tirupati in partial fulfilment of the course requirements of Supply Chain Management at Indian Institute of Management Bangalore
5th March 2014
Disclaimer: Unless otherwise stated, any views or opinions expressed in this report are solely those of the authors.
Inditex, founded by Amancio Ortega, operates six different chains: Zara, Massimo Dutti, Pull&Bear,
Bershka, Stradivarius, and Oysho. Zara is a leading apparel chain with major dominance in Spain. Zara being responsible for around 80% of Inditex’s gross profits is critical for Inditex’s growth. Currently, Zara is facing a convoluted problem of growth expansion both within and outside Spain. Within Spain, growth options for Zara seem limited owing to the already saturated market. Zara however has placed its foot in the Italian market (which it finds particularly lucrative owing to the fashion-forward Italian market) through a joint venture with Percassi and plans to add around 70 stores in the next decade. Other options for entry could be USA, Asia and other parts of Europe.
The analyses focus on Zara’s business model and competitive advantages and depicts how it impact’s
Zara’s growth. Vertical integration, delayed production, just-in-time manufacturing, and proactive design teams are some of the key features in Zara’s business model which makes Zara a competitive brand. With such peculiarities in its business model Zara has been able to maintain low failure rates as well as manage high operating efficiencies as compared to some of its competitors in Spain. Harnessing the Quick
Response (QR) technique quite remarkably, Zara has drastically reduced its cycle times with minimal bullwhip effects. As a global apparel firm, Inditex’s main development strategy for international