zara case analysis
INTRODUCTION
TRENDS OF TEXTILE AND CLOTHING MARKET
• The European market has large number of small and medium-sized companies mainly located in Italy, Great Britain, France, Germany and Spain.
• Increasing internationalisation in the textile and apparel sector and the emergence of international competitors.
• Consolidation of the sector through mergers, acquisitions and strategic alliances.
• Sub-contracting or delocalisation of textile and clothing production to countries with lower labour and transportation costs and reduced lead-time.
• Fashion companies are becoming more flexible and vertically organised, limited vertical integration being more frequent than complete integration.
• Adoption of new technology to expand productivity and increase competitiveness
INTRODUCTION ABOUT ZARA
• Established in 1975, Zara is the flagship of Inditex (Industria del Disen˜o Textil, SA).
• Inditex has become the world’s second largest clothing retailer with 2,692 stores spread across 62 countries worldwide by the end of January 2006.
• In addition to Zara, which accounted for 66 percent of the group’s turnover in 2005
• Inditex owns seven other clothing chains:
Kiddy’s Class (children’s fashion)
Pull and Bear (youth casual clothes)
Massimo Dutti (quality and conventional fashion)
Bershka (avant-garde clothing)
Stradivarius (trendy garments for young women)
Oysho (undergarment chain)
Zara Home (household textiles).
CLOTHING CHAINS OF INDITEX
THE ZARA CONCEPT
Zara’s Business Model includes-
• vertical integration of design
• just-in-time manufacturing
• delivery and sales
• flexible structure
• low inventory rule
• quick response policy
• advanced IT provides quick response to customer’s changing demands
Zara internally manufactures its “live collections”, which account for almost half of its production, About 11,000 new items are launched every year.
Every store receives small
TRENDS OF TEXTILE AND CLOTHING MARKET
• The European market has large number of small and medium-sized companies mainly located in Italy, Great Britain, France, Germany and Spain.
• Increasing internationalisation in the textile and apparel sector and the emergence of international competitors.
• Consolidation of the sector through mergers, acquisitions and strategic alliances.
• Sub-contracting or delocalisation of textile and clothing production to countries with lower labour and transportation costs and reduced lead-time.
• Fashion companies are becoming more flexible and vertically organised, limited vertical integration being more frequent than complete integration.
• Adoption of new technology to expand productivity and increase competitiveness
INTRODUCTION ABOUT ZARA
• Established in 1975, Zara is the flagship of Inditex (Industria del Disen˜o Textil, SA).
• Inditex has become the world’s second largest clothing retailer with 2,692 stores spread across 62 countries worldwide by the end of January 2006.
• In addition to Zara, which accounted for 66 percent of the group’s turnover in 2005
• Inditex owns seven other clothing chains:
Kiddy’s Class (children’s fashion)
Pull and Bear (youth casual clothes)
Massimo Dutti (quality and conventional fashion)
Bershka (avant-garde clothing)
Stradivarius (trendy garments for young women)
Oysho (undergarment chain)
Zara Home (household textiles).
CLOTHING CHAINS OF INDITEX
THE ZARA CONCEPT
Zara’s Business Model includes-
• vertical integration of design
• just-in-time manufacturing
• delivery and sales
• flexible structure
• low inventory rule
• quick response policy
• advanced IT provides quick response to customer’s changing demands
Zara internally manufactures its “live collections”, which account for almost half of its production, About 11,000 new items are launched every year.
Every store receives small