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Case Code: OPER122
Case Length: 10 Pages 
Period: 2011 - 2016      
Pub Date: 2017
Teaching Note: Available
Price:Rs.400
Organization : Inditex
Industry : Apparel Manufacturing and Retail
Countries : Spain
Themes: -  
Case Studies  
Business Strategy
Marketing
Finance
Human Resource Management
IT and Systems
Operations
Economics
Leadership & Entrepreneurship

Zara: Future Ready?

 
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INTRODUCTION

 
In 2016, Spain-based Industria de Diseño Textil, S.A. (Inditex) was the biggest retailer of clothes in the world with revenue of 20.9 billion euros. As a public listed holding company, the Spanish retailer had several brands under its umbrella. Zara, its flagship brand, contributed 63% to Inditex’s top-line in 2014. The Zara brand was considered the pioneer of fast fashion. Although, Inditex was a fully integrated organization, its flexibility in adapting to the dynamic trends of the apparel industry was unparalleled. Zara took the latest catwalk designs and converted them into affordable high-street fashion apparel within 3 weeks. Zara stores were replenished twice a week. The speed at which the stores rotated inventory while maintaining competitive pricing instilled a sense of scarcity and urgency among customers. Customers knew that most items would be sold out or replaced within days, and this knowledge made them take quick buying decisions as well as frequent the Zara store more often – “it was buy now or miss out”. An average Zara customer made 17 visits to a Zara store per year. To offer such a value proposition, Inditex had to maintain a complex and high speed supply chain for Zara. Inditex managed 50% of its production in its own factories. The balance production was either near-shored to neighboring countries like Morocco or outsourced to countries in Asia and South America for cost advantages....
 
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