Financial analysis

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1. Introduction
The coursework is going to focus on Inditex, (at times I will only focus my analysis on Zara, as it is the principal branch of the group) a company dedicated to the manufacture of garments, which began its internationalization process in 1988 with Zara. In 1963, Amancio Ortega Gaona founded the company that has grown gradually until it has several manufacturing sites thatdistribute products to various different countries.

Since then Amancio Ortega has expanded the group to include seven chains in 77 countries, with a total of 5,044 establishments. This development is based on a business model characterized by flexibility and adaptability, and different strategies, such as the implementations themselves, the most common being joint ventures and franchising.

Atfirst Zara expanded within the domestic market. This was followed by an expansion of Zara’s activity that followed a pattern termed "oil stain". After opening stores in different locations in Galicia between 1975 and 1980, at the beginning of the eighties, store openings began to spread to progressively distant locations; first in the northwest area of Spain and eventually in the rest of Spain as awhole.

In December of 1988 the first international store was opened in the Portuguese city of Oporto, when Zara had already surpassed the number of 60 stores in Spain. This followed in 1989 and 1990 respectively, the openings in New York and Paris, which represented a significant turn in the expansion process. In both cases, besides taking the first steps to entering two major internationalmarkets, Zara also targeted two of the world fashion capitals, allowing it to put its image out there as a product as well as a business. Throughout the nineties, Zara stores were opening in an increasing number of countries, reaching 77 today. As a result of the incorporation of new channels to the group, in some cases by acquisition (Massimo Dutti and Stradivarius in 1991 and 1999) and othercreations (Pull&Bear in 1991, Bershka in 1998, Oysho in 2001, Zara Home in 2003 and the last commercial format of fashion and accessories Uterqüe in 2008 ), with its own plans for internationalisation, the number countries in which Inditex is present rises to 77.
(Inditex website)

1.1 Evolution of Inditex
| 1998 | 1999 | 2000 | 2001 | 2002 |
Net Sales(1) | 1.615 | 2.035 | 2.615 | 3.250 |3.974 |
Nº of stores | 748 | 922 | 1080 | 1.284 | 1.558 |
Nº of countries | 21 | 30 | 33 | 39 | 44 |
International sales/ total sales | 46% | 48% | 52% | 54% | 54% |
The Inditex financial year is from 1st February to 31st January of the following year
(1) in millions of euros

1.2 Current Inditex
| 2010 | 2009 | 10/09 |
Net sales(1) | 12.527 | 11,084 | 13% |
Net profit(1) | 1,732 |1,314 | 32% |
Nº of stores | 5,044 | 4,607 | 437 |
Nº of coutries | 77 | 74 | 3 |
Employees | 100,138 | 92,301 | 7,837 |

The Inditex financial year is from 1st February to 31st January of the following year
(1) in millions of euros
(Inditex website)

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2. Strategic Leadership(Inditex website 2010-2011)

The above diagram represents the organisation structure of Inditex; the sections highlighted in red are corporate departments and its functions include controlling and monitoring all important issue in the company and to ensure proper functioning of the company.
The blue sections represent the business of the company; how the business is divided into different areas.This division is to ensure the proper functioning of each business area. Within each area is also a distinct organisation structure.
The yellow sections represent business support areas; areas which rely on the support of other areas in order to achieve the main objectives of the company.
The principal leaders in Inditex are:
* Mr Amancio Ortega Gaona (Chairman)

He is the founding...
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