Zara Fast Fashion

2099 words 9 pages
1- With which of the international competitors listed in the case is it most interesting to compare Inditex's financial results? Why? What do comparisons indicate about Inditex's relative operating economics? Its relative capital efficiency? Note that while the electronic version of Exhibit 6 automates some of the comparisons, you will probably want to dig further into them.
Background: Inditex is an international fashion retailer that designed, manufactured and sold apparel, footwear, and accessories for women, men, and children through Zara and other five chains around the world. The six retailing chains were organized as separate business units within an overall structure that also included six business support areas and nine corporate
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Knowing that there will always be new designs in a Zara store, customer will visit the store more frequently leading to more sales.
The reduction in lead-time does more than improving the forecasting. It also decreases the level of inventory, which conduct to release of capital locked up in stock, reduce the cost of holding it and the risk of stock going out of date.
3- Can you graph the linkages among Zara's choices about how to compete, particularly ones connected to its quick -response capability and the ways in which they create competitive advantage? What does the exercise suggest about such capabilities as bases for competitive advantage?
Zara choices to compete have mainly been concentrated on their quick response capability. Their ability to quickly respond to market needs with very short business cycles have given the company a distinctive competitive advantage over the competition. Below is a graph of how Zara choices created a number of competitive advantages for the company:

The above model clarifies the huge advantages gained by Zara as a result of their reduced business cycle. Not only does Zara attain higher customer satisfaction as they are quickly able to respond to their feedback and needs, but also Zara manages to highly decrease its operating costs as a result of decreased inventory held and thus lower level of risk when new models are introduced.
4- Why might Zara fail? How


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