SWOT Analysis
Strengths ** Inditex’s success as the world’s leading fashion retailer is built upon the company’s many strengths, which also make then the market to beat. The fast fashion industry is very competitive. The product life is short and it is important for it to be unique and different from all the others. Firms in this market usually compete on pricing which intensified as companies began to utilize low cost outsourcing. Inditex employs over 1000 people in its central product department and has 13 textile manufacturing subsidiaries in Spain, 11 logistic subsidiaries, and eight distribution centers and over 6000 retail stores (Vincent, Kantor, Geller, 2013, p. 23). Inditex has great reach, both globally and within the industry. Also the brand name the higher investment in the Zara name is an asset for Inditex, also their retail formats through association. For example, if people shop at Zara clothing and really enjoy affordable good quality clothes they are more likely to shop at Zara Home for their decor needs because of the positive name association.
Weaknesses …show more content…
The next biggest sale generator is from the Berksha brand, which is about 10%. Even though there are twice as many Zara stores than there are Berksha, Zara makes roughly 6.5 times more sales. While Zara is more popular worldwide than the other brands, this could affect the other 7. This point in time it seems that Inditex has bet too much of its success on one brand, this currently is not a problem but eventually it will become one. Also there seems to be an overdependence on European and domestic markets, back in 2012 Europe accounted for 66% of Inditex sales, with 22% of sales coming from its Spanish home market. Such a large dependency on Europe could leave the company more vulnerable to economic fluctuations in the case of a fiscal
Strengths ** Inditex’s success as the world’s leading fashion retailer is built upon the company’s many strengths, which also make then the market to beat. The fast fashion industry is very competitive. The product life is short and it is important for it to be unique and different from all the others. Firms in this market usually compete on pricing which intensified as companies began to utilize low cost outsourcing. Inditex employs over 1000 people in its central product department and has 13 textile manufacturing subsidiaries in Spain, 11 logistic subsidiaries, and eight distribution centers and over 6000 retail stores (Vincent, Kantor, Geller, 2013, p. 23). Inditex has great reach, both globally and within the industry. Also the brand name the higher investment in the Zara name is an asset for Inditex, also their retail formats through association. For example, if people shop at Zara clothing and really enjoy affordable good quality clothes they are more likely to shop at Zara Home for their decor needs because of the positive name association.
Weaknesses …show more content…
The next biggest sale generator is from the Berksha brand, which is about 10%. Even though there are twice as many Zara stores than there are Berksha, Zara makes roughly 6.5 times more sales. While Zara is more popular worldwide than the other brands, this could affect the other 7. This point in time it seems that Inditex has bet too much of its success on one brand, this currently is not a problem but eventually it will become one. Also there seems to be an overdependence on European and domestic markets, back in 2012 Europe accounted for 66% of Inditex sales, with 22% of sales coming from its Spanish home market. Such a large dependency on Europe could leave the company more vulnerable to economic fluctuations in the case of a fiscal