Inditex is the world's biggest clothes retailer (measured by sales), and Zara is its largest brand. Amancio Ortega (who retired as Chairman of Inditex in 2011) formed the company with Rosalia Mera in 1975. Ortega had begun working asadeliveryboy for a shirt-maker and, in 1963, when still in his twenties, he started supplying clothes towholesalers.In1975,a German customer cancelled a large order, so the firm opened its first Zara retail shop in La Coruna, Spain - simply as an outlet for cancelled orders. The experience taught Ortega the importance of the 'marriage' between the operations of production and retailing. This guided the company's evolution - Miguel Diaz, a senior marketing executive: "It is critical for us to have five fingers touching the factory and the other five touching the customer (Ferdows et al. 2004, p. 106)" The company had six stores by 1979 and opened them in all major Spanish cities during the 1980s. In 1988, the first international Zara store opened in Porto, Portugal, followed by New York (1989) and Paris (1990). The company is now a worldwide business: national frontiers do not prevent people from sharing a single fashion culture. Zara claims to move with society, reflecting the ideas, trends and tastes that society creates. It moves quickly: "it keeps to a time period between the decision to produce a garment and the moment it is ready for the consumer that no one else has ever achieved: an average of two weeks for any of the shops in [all of the countries where they operate]. Its main competitor's times lie between 40 days for H&M and over 60 for Benetton, to mention only those which .... get anywhere near the Inditex times (Badia, 2009, p. 130)". Zara designers link closely with the public. Information travels continuously from the stores to thedesign teams, transmitting the demands and concerns of the market. The close integration of activities - design, production, logistics and sales (through the Zara stores) - means it is flexible and quick toadapt. Manyofthe stores now have Radio Frequency Identification (RFID) technology - each garment is alarmed with a unique code at the logistics centre, which enables staff in the stores to respond instantly to a customer request about availability - in the store, at another store, or online. This illustrates the group's drive for continuousinnovation. It takes o Conduct research and clearly explain key business concepts present in your case study. Identify the business problems and clearly define the solutions supported by literature. Address the implementation process and how the organisation can overcome the business problem(s).
Inditex is the world's biggest clothes retailer (measured by sales), and Zara is its largest brand. Amancio Ortega (who retired as Chairman of Inditex in 2011) formed the company with Rosalia Mera in 1975. Ortega had begun working asadeliveryboy for a shirt-maker and, in 1963, when still in his twenties, he started supplying clothes towholesalers.In1975,a German customer cancelled a large order, so the firm opened its first Zara retail shop in La Coruna, Spain - simply as an outlet for cancelled orders. The experience taught Ortega the importance of the 'marriage' between the operations of production and retailing. This guided the company's evolution - Miguel Diaz, a senior marketing executive:
"It is critical for us to have five fingers touching the factory and the other five touching the customer (Ferdows et al. 2004, p. 106)"
The company had six stores by 1979 and opened them in all major Spanish cities during the 1980s. In 1988, the first international Zara store opened in Porto, Portugal, followed by New York (1989) and Paris (1990). The company is now a worldwide business: national frontiers do not prevent people from sharing a single fashion culture. Zara claims to move with society, reflecting the ideas, trends and tastes that society creates. It moves quickly:
"it keeps to a time period between the decision to produce a garment and the moment it is ready for the consumer that no one else has ever achieved: an average of two weeks for any of the shops in [all of the countries where they operate]. Its main competitor's times lie between 40 days for H&M and over 60 for Benetton, to mention only those which .... get anywhere near the Inditex times (Badia, 2009, p. 130)".
Zara designers link closely with the public. Information travels continuously from the stores to thedesign teams, transmitting the demands and concerns of the market. The close integration of activities - design, production, logistics and sales (through the Zara stores) - means it is flexible and quick toadapt. Manyofthe stores now have Radio Frequency Identification (RFID) technology - each garment is alarmed with a unique code at the logistics centre, which enables staff in the stores to respond instantly to a customer request about availability - in the store, at another store, or online. This illustrates the group's drive for continuousinnovation. It takes o
Conduct research and clearly explain key business concepts present in your case study.
Identify the business problems and clearly define the solutions supported by literature.
Address the implementation process and how the organisation can overcome the business problem(s).
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