Inditex

Background Zara

Zara is a chain of stores Belonging to the Spanish fashion group INDITEX founded by Amancio Ortega Gaona. It is the company's flagship chain and is represented in Europe, America, Africa and Asia with 1412 stores in 69 countries, 500 of them in Spain. During 2007 it opened 560 stores across the group.
. It has three logistics centers, located in the main Arteixo, province ofLa Coruna (Spain), where he opened the first store in 1975 and two in Zaragoza and Madrid.
In 1975 he opened the first Zara store in La Coruna, northern Spain. In 1985, Zara enters the fast fashion business. He joins the business José María Castilian, professor of business school and a lover of technology, such as Amancio Ortega's right hand, making the company as a logistics model. In 1988 Zaraopened its first store outside Spain, in Portugal. In 1994, opens shop in Sweden, home of its closest competitor, H & M. In 2005, replaces CEO Pablo Isla Jose Maria Castilian and begins a restructuring of logistics, in search of efficiency.
Medium Zara clothing offers quality trend at the female, teen, men and kids. In this same line comes a housewares brand (Zara Home) began selling online inOctober 2007.
In the period of 2009 the turnover was of 3.123 million, assuming an increase over the previous period of 3%.


Zara’s turnover between 1986-2007
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source: inditex.es

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Seasonal Cycle

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FAST COMPANY.

Its output growth due to its ability to design a strategy own operations, working out of inventory and responds in extremely fast to the needs of itscustomers to the point that Louis Blanc, the company executive, says: "We want customers entering a posh shop offering the latest fashion and good service at low prices. "But most important," adds Blanc is trying to make our customers understand that if they see something they like have to buy now because next week is no longer in stores. It's about creating a climate of scarcity and opportunity. "Consumers know that each week, find new products in stores.
 The production cycle lasts 2 weeks where in for the rest of the industry lead times are of several months. This leads to rapidly respond to customer needs.


COMPETITORS
Until recent years this sector was dominated by companies with brands and, in general, design and fabric quality went hand in hand. Zara enters the game withdifferent rules. While for most established fashion changes mean problems are opportunities for Zara, in fact, encourages continuous fashion changes. Zara does not believe in two collections a year: spring and fall. Conventional wisdom in the industry, which in the language of complexity is called an attractor, is that systems that are the fashion companies are stabilized around the idea of two annualcollections
Some of its competitors, seeking a lower cost of labor, manufacturing their garments in the Far East or the Maghreb, which no longer complejificación.Hacer some more complex value chain does not necessarily achieve cost reductions, though, obviously, should be a primary objective, provided that the final product offers more value to the customer. The 14,000 employees of Zara in LaCoruña-and imagine that many other ancillary businesses probably have a higher cost for the company that the same people and companies in the areas we have discussed. Zara But perhaps not only in the fixed cost of labor but on the total cost, and always measured in relation to customer value, which is obviously winning. In our opinion, Zara does not look much lower costs and encourage the creation ofvalue for the customer.
Inditex is the only company that is vertically integrated to a very high, from design to manage their stores. "Gap designs and sells but does not manufacture, and so does H & M and Next, while Benetton designs and manufactures but stores are franchised. At Inditex most establishments, however, are owned, this does not exclude that in countries like Germany and Japan...