THE EMPIRE OF INDITEX:
To talk about Zara is to talk about the Inditex’s Empire. We talk about a kingdom in the market that started with the foundation of Zara in 1975, followed with the creation of Inditex in 1985. This corporation was growing till becoming nowadays into the most important textile company worldwide nowadays.
The Spanish multinational of Amancio Ortega (Founder andpresident) consist on a group of nine retail formats focused on the production of textile products and its distribution to around 5000 stores over the world. These eight companies are: Zara, Massimo Duty, Stradivarius, Bershka, Kiddy’s class, Oysho, Uterqüe, Pull & Bear and Zara. The last one focused on home’s products instead of textile.
Reciprocally talking about Inditex as an empire is to talk aboutthe great success and expansion of its “soul”: Zara.
I think that the most important thing at the moment to analyze a firm so big and successful is analyzing how it has achieved that position and how it can maintain it.
For that I’m going to talk about the most important points and keys of the success of the company.
What Zara offers is a fast global fashion with a great quality and aprice adequate for the majority of the customers. This concept of fast fashion indicates the basis of the company, its competitive advantage, the rapid response. The firm is able to capture trends in others windows, parades or simply in the street; to design a similar product, to distribute to their storages and to sell to its customers in less than three weeks when a normal time of this process isaround five months.
This advantage could not be achieved without the flexibility that offers them its vertical integration: The own firm designs, purchases, produces, distributes and sells its products. Thanks to this kind of integration Inditex can shortening deadlines, reducing inventory and remove stock quickly; being that a key to save and invest better space of its locations.
I think thisis the other great factor of its success also related with the fast response is its peculiar marketing of no publicity. They are a special case that don’t utilize the TV or others media to expose its products.
Inditex decided to focus its marketing on the layout of the storages (windows), the location of these, the management of the scarcity and the fact of how treating customers. The big quantityof money that a normal firm invests on publicity, they utilize it to invest in the best locations and to prepare it with best way, to invest on training workers and to invest in transport of material because of are two the times per week a store receive new merchandise.
The successful factors related with all that mentioned are:
• Layout of stores: For that Zara has created a departmentof coordination that handles the space the best manner to facilitate the sale of products and which transform the fact of shopping into an experience thanks to the incredible design of the interior.
Another important factor of the layout, utilized by the firm has a form of publicity is the management of the windows.
• Location: Zara spend a great part of its capital in achieve thevery best locations of every country whatever the price be. The video talk about and acquisition in the place where is the more expensive square meter. For Inditex the most important factor because of its “no publicity” it’s the location of its business, the place in which creating the link with customers; and on the other hand the place in which establish its fabrics in which ironing, cut andlabeling the products.
The major parts of the fabrics of this company are settled in Arteixo (Galicia), the heart of the Spanish multinational, and there are two logistic platforms else in Aragon and Madrid. Unlike the majority of the multinationals, Zara has not the great part of its production places in the poorest countries in search of cheaper work hand.
• Inventory: Zara...
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