Caso Zara - Moda Rápida. Supply Chain Management

9-703-497
REV: DECEMBER 21, 2006

PANKAJ GHEMAWAT
JOSÉ LUIS NUENO

ZARA: Fast Fashion
Fashion is the imitation of a given example and satisfies the demand for social adaptation. . . . The more an
article becomes subject to rapid changes of fashion, the greater the demand for cheap products of its kind.
— Georg Simmel, “Fashion” (1904)
Inditex (Industria de Diseño Textil) of Spain, theowner of Zara and five other apparel retailing
chains, continued a trajectory of rapid, profitable growth by posting net income of € 340 million on
€
revenues of € 3,250 million in its fiscal year 2001 (ending January 31, 2002). Inditex had had a heavily
€
oversubscribed Initial Public Offering in May 2001. Over the next 12 months, its stock price increased
by nearly 50%—despite bearish stockmarket conditions—to push its market valuation to € 13.4
€
billion. The high stock price made Inditex’s founder, Amancio Ortega, who had begun to work in the
apparel trade as an errand boy half a century earlier, Spain’s richest man. However, it also implied a
significant growth challenge. Based on one set of calculations, for example, 76% of the equity value
implicit in Inditex’s stockprice was based on expectations of future growth—higher than an
estimated 69% for Wal-Mart or, for that matter, other high-performing retailers.1
The next section of this case briefly describes the structure of the global apparel chain, from
producers to final customers. The section that follows profiles three of Inditex’s leading international
competitors in apparel retailing: The Gap (U.S.),Hennes & Mauritz (Sweden), and Benetton (Italy).
The rest of the case focuses on Inditex, particularly the business system and international expansion
of the Zara chain that dominated its results.

The Global Apparel Chain
The global apparel chain had been characterized as a prototypical example of a buyer-driven
global chain, in which profits derived from “unique combinations of high-valueresearch, design,
sales, marketing, and financial services that allow retailers, branded marketers, and branded
manufacturers to act as strategic brokers in linking overseas factories”2 with markets. These attributes
were thought to distinguish the vertical structure of commodity chains in apparel and other laborintensive industries such as footwear and toys from producer-driven chains (e.g., inautomobiles) that
were coordinated and dominated by upstream manufacturers rather than downstream intermediaries
(see Exhibit 1).

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HBS Professor Pankaj Ghemawat and IESE Professor José Luis Nueno prepared this case. HBS cases are developed solely as the basis for class
discussion.Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management.
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ZARA: Fast Fashion

Production
Apparel production was very fragmented. On average, individual apparel manufacturing firms
employed only a few dozenpeople, although internationally traded production, in particular, could
feature tiered production chains comprising as many as hundreds of firms spread across dozens of
countries. About 30% of world production of apparel was exported, with developing countries
generating an unusually large share, about one-half, of all exports. These large cross-border flows of
apparel reflected cheaper labor...