Zara

General Characteristics

Founded by Amancio Ortega Belongs to First store in La Coruña, Spain in 1975 Expansion into other major cities of

Spain Opening of stores outside Spain in the

1980s Launch of online shopping in 2010

General Characteristics

1,671 stores in 85 countries

General characteristics

Sales: 8,938 million euro Contributed to the whole Inditex group:

64.8% Number of employees: 109,512 (INDITEX) Sector of activity: clothing industry

(operating in textile design, manufacturing and distribution)

In-house production process instead of outsourcing to low-cost countries

Business Model

Design

Manufacture

LogisticsDistribution

Sale

Design

• Employing over 200 designers• Three product lines: men, women and

children• Zara has people around the world looking for

the new tendencies• Can produce and distribute new fashion in two

weeks

ManufactureA significant proportion of production takes place in the

group´s own factories.

Subcontracting the garment making stage to specialist forms located

predominantly in the North-West of the Iberian Peninsula.

Ability to adapt the offer to customer desires in the shortest time.

Logistics

Software: Time between receiving an order at the distribution centre to the delivery of the goods in the store is on average 24h. For european (48h for

American or Asian stores)

The distribution takes place twice a week: includes new models.

Stock at Zara stays for a maximum od 4 weeks on the shop floor and includes many more items each

year than its competitors.

Distribution & Sales

The stores act as a market information gathering terminals, providing feedback to the design teams

The shop window play a major role, acting as an authentic advertisement for their chains tin the world´s main shopping streets.

Total integration of franchised stores with own managed: global image in the eyes of customer around the world.

INTERNATIONAL OPERATIONS

• OFFSHORE PRODUCTION- 80% of production in Europe, much in Spain.- Allows for control and HQ, but 10 times more

costly than Asia- Only stitching is not owned, but controlled

through network of Spanish and Portuguese workshops.


• MULTINATIONAL OPERATIONSExporting -> where manufacturing is not profitableFranchising -> to avoid development costsSubsidiaries -> many fully owned for total controlJoint Ventures -> to absorb partner’s knowledge of foreign country


Selling product overseas- Only one shop initially in each country- When success is certain, expands in new

market multiplying its stores


RELEVANT DATA (end of 2011)• Entered 5 new markets: Taiwán, Azerbaiyán,

Australia, Sudáfrica and Perú• Presence in 82 markets within the 5 continents• Opened 107 stores in 2011; 30 in China, where it

now owns more than 100 stores.• Launched online shop in America and Japan. The

online shop is now available in 18 contries, with more than a million visits per day.


NUMBEROF SHOPSPERCOUNTRY

Organization Structure

• Horizontal differenciation where communication flows easily

• Internatinal Organization focus on local demands and trends

Grupo_INDITEX_Memoria-Inditex-2011.pdfGrupo_INDITEX_Memoria-Inditex-2011.pdf

Culture

• 82.8% of these professionals being young women ,employee average age 26 years

• Focused on teamwork, open communication, and a high level of demand, and it offers employees flexibility .

• Iniciative ,Ambition

All of Inditex’s and Zara’s activities are conducted:

o - Ethically and responsibly

o - Respecting the environment

o - Including actions regarding product health and safety

Social responsibility

Essential to maintain correct and stable relationshipswith its network of external suppliers worldwide

2001: Code of Conduct for External Manufacturers and Suppliers

• Suppliers must comply with the code before embarking on a business relationship

• Independent external companies regularly audit suppliers.

Ethics - CSR

Vidya Project India:

• Launched in 2009• 5% of Zara’s total sourcing• 24 lowest rated suppliers

Series of measures that sought to ensure their compliance with Inditex’s Code of Conduct and improve control over the supply chain.- 17 achieved improved ratings. - 3 were discarded because they failed to

provide sufficient guarantees of compliance with the Code

- 4 were discontinued for commercial reasons.

4 points in order to promote environmental protection

I. Taking environmental issues into account and encouraging environmental awareness

II. Having compliance with the environmental laws that govern activities, prevent pollution and reduce the environmental impact of the business

III. Achieving constant improvements to the Management System, to enhance its usefulness and improve efficient use of resources

IV. Establishing open lines of communication with government authorities, local communities and other stakeholders

Environment

Clear to Wear • Correct implementation at any phase

of the manufacturing process by carrying out analyses at any point of their production cycle

• Regulates those substances whose use is legally limited

Safe to Wear• Developed by Zara in accordance

with the most demanding safety regulations worldwide

• Verify correct implementation at any phase of the manufacturing process by carrying out controls at any point of their production cycle

Product health and safety

Thanks for listening

• http://www.youtube.com/watch?v=qhCM0F81vEg

http://www.youtube.com/watch?v=qhCM0F81vEg

http://www.youtube.com/watch?v=qhCM0F81vEg

Marketing

Zara