Zara Business Strategy

1644 words 7 pages
- zara owned by inditex; posted net income eur340m on revs eur3.250m in 2001
- inditex ipo may 2001; oversubscribed; stock increased by over 50%
- 76% of equity value implied stock price was based on future growth expectations (higher than an estimated 69% for WMT)
- global apparel chain; buyer driven global chain
- branded marketers and manufacturers served as brokers in linking overseas factories with markets
- production; very fragmented (individual apparel firms on avg employed a few dozen ppl)
- about 30% of apparel production was exported (developing countries had very large share, nearly 50% of all exports)...cheaper labor + inputs
- proximity also important bc it reduced shipping costs
- china was export powerhouse
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in south america had to present a more "upscale" image so advertised "made in europe" (instead of spain specifically).

- personal sharing of information from store manager to top management is extremely important (in conjunction of knowing what's currently selling); what are customers asking for, what do they like/don't like
- if product isn't selling well, take it out (don't have significant inventory)
- 80-90% collections found in the store produced in europe (around 60% of that made in spain); fabrics arrive from italy, france, spain mainly; minimize waste of fabric when cutting (person in charge of marking must make "puzzle" fit in best way the cut outs of fabric/clothing)...then goes to cutting table...then goes to workshop where they put together pieces of garments (workshops owned by independent subcontractors in various regions); workshops organized in array of small assembly lines; then garments sent back to


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