Zara Fashion Essay

2489 Words 10 Pages
ZARA Fashion
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?

The four companies shown above have very different business models. Inditex owned much of the production and most of its stores. Inditex is thus a vertically integrated company. This made Inditex gain a competitive advantage, which is quick response to the market requirements. On the other hand, The Gap and H&M have a different business model. They
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Despite its famous history, as tailors for the aristocracy; Galicia lacked strong local demand for the apparel industry, technical institutes and universities that would help in the education and training of its citizens as well as the absence of an industry association that monitors such activities.
The only advantage of this region was its geographical proximity to Europe, as it lies in the corner of Europe, hence reducing transportation costs.

6) How well does Zara’s advantage travel globally?
Until the writing of the case study, Zara’s advantage succeeded in traveling globally. However, with the upcoming expansion into additional countries and new markets, such advantages should be adopted to the special circumstances relevant to these areas. This would assist in decreasing additional expenses in addition to meeting the direct demand of the consumers; hence, achieving more success.

7) What do you think of Zara’s past international strategy? Evaluate, in particular, its past strategy for (product) market selection, its mode of entry, and its standardization of its marketing approach
Zara’s international strategy was excellent because it adopted a balanced mixture of standardization and customization:
• It followed standard procedures in selecting and entering a certain market, which made

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