Inditex Sales (million Euros) 1H 2012 1H 2011 % Change 12/11 Sales (Press release) 7239 6209 +17% Online sales (Estimated) 432 310 +40% Table 1: Inditex’s Press release 19.09.2012 Within consideration involving Zara’s proportional business share involving approx. 65% at Inditex sales good financial report 2011, we considered it in this objective. With the online revenue calculation for the second thing 2012 people estimated 6% of sales and often will extrapolate around 7% sales by the end associated with 2013. In attention of Zara’s fresh launched online store in China to the 5th of September 2012 (Inditex press release 2012) efficient estimating a significant increase inside online gross sales. The level of ambition shall be defined inside EUR 840m with the end of 2013.
The design products in Zara are out of the way. Their clothing designers can do a lot of special highlighted works as well as this kind of products will usually limit the quantity. Due to this reason, customers is really want to buy this product. Zara is popular with its fast fashion. Their company said that they can just use 2 weeks to design a new product.
Perhaps the only competitor able to match the growth and Inditex profitability is H & M (Hennes & Mauritz AB) 4. Part of the strategy they use: drag (pull) the market is immediately provide what the consumer wants instead of doing as the other companies in the same sector which seek to impose across fashion aggressive advertising campaigns. In the case of Zara mass advertising it is almost unnecessary as they are shops, strategically located, its best communication with the public. They invest heavily in remodeling its stores level World every 5 years (something the competing brands do
They had to integrate horizontally to open more factories in different countries to ensure maintaining in in low cost too. Zara had 5,300 factories in over 50 countries. However, this integration had made Zara to face challenges in China, the cloths required three to six months to reach to the outlets, from the time of order to storing and finally delivering to the
Zara’s relationship with customers. Zara created and maintained a good relationship with the customers. This was through manufacturing clothes that meets the demand, the clothes were delivered on time and at an affordable price of about $27 (Gallaugher, 2010) and shipped very fast to the stores. The company also engaged the customers in product design by asking them questions regarding color, length of clothes among others. As Azhari Osman pointed out during the discussion, technology played a cardinal role in establishing and maintaining customer relationship.
Inditex is ranked first in Spain, the world's third largest clothing retailer, in 2005 its global sales of EUR 6 billion 741 million, sales of up to 429 million, net profit of $803 million. As of June 2006 it in 64 countries and regions worldwide opened 2899 stores, a total of 8 of its apparel retail brands, including ZARA, Pull Bear, Kiddy and 's Class Massimo, Dutti, Bershka,
The company has a short time frame within which an idea is implemented. For instance, Zara designers may conceive a particular design that may seem fashionable at the current time and ensure that clothes are within the retail outlets within ten days. The speed of innovation and invention favors the versatile customers who love moving with the fashion trends. Zara, however, ensures that it releases few clothes to test the market thus saving the company on huge inventory costs that would lead from a dead stock. Notably, Zara has shied away from the top-down decision-making approach because the company understands that the employees are more inclined to understand the consumer trends.
(Ferdows & co. 2014 p8) Zara also works hand in hand with over 1600 worldwide suppliers (a third from Eastern Europe, i.e. Bulgaria, Turkey, Romania, and the rest from Asia.) Those suppliers appear to have an essential role, and therefore be of extreme importance in preserving the very flexible, and fast supply chain. Most supplier prefer working with Zara, as they are a stable provider of considerate orders. Mr. Alvarez highlighted the importance of trust, and understanding between supplier and Zara, he explained that Zara tries to remain loyal to its supplier as long as good products are delivered, and timing is respected.
(Inditex Group, n.d.) ZARA uses designers as group instead of individual to quick update products at a great extent, besides, company keep low inventory in stock because each new product is supposed to be sold within 10 days. ZARA constitutes around 80% of Inditex business (8 companies) which means a failure in ZARA can put the whole group at a risk. (Inditex Group, 2014) Base on the research, the following is analysis of ZARA by SWOT model. • Strengths: Good enterprise management status and economic status; Good development space; The broad consumer groups (men, women, children); Great brand attractiveness; Powerful design capability; High speed of product renewal; Parity
Successful International Expansion Strategy of Zara The purpose of this paper is to diagnose and comment on the successful international expansion strategy of the Spanish fashion brand – Zara. The paper commences with a brief company introduction which is then followed by examining key aspects of internationalisation undertaken by Zara. The main points discussed in here motives for international expansion, market selection, entry strategies and international marketing strategies. Company Introduction "Zara's aim was to democratize fashion. In contrast to the idea of fashion as a privilege, we offer accessible fashion that reaches the high street…” (Nash, October 27, 1999) With presence in 88 countries through 2,085 stores as of 2014- Zara