Zara Distribution Strategy Summary

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Logistics and Distribution Strategy Zara has two week orders per week from its stores around the world on specific days and hours, so with shipments from logistic center in La Coruna. All products are labeled and priced and spend by buses and air-planes. This is one of the biggest advantages of Zara from other competitors, because usually it takes about 5-6 months to get new collection, but Zara has new collection twice per one week. Follow the leader Imitating a leading competitor’s strategy may be a good idea, unfortunately it ignores a firm’s strengths and weaknesses, but not in our case. There is only one competitor for Inditex and it is H&M. Alongside with H&M, they are both dominant in Europe, growing steadily in the Americas and now…show more content…
As I have mentioned before, Zara is opening 10 new stores a week and of course it means that sales are going up. Do the increasing sales lead to the falling of net income? In some cases yes, for example, the television program “Who wants to be a millionaire?” spent 750$ million to build new theme parks and buy a cruise line and a hockey team. By 2000, even the corporate sales had continuing to grow, net income was falling. Now let’s return to Inditex, sales of Zara is growing rapidly that’s lead to the growing of net income. For example, according to official date, Zara’s net income for 2011-2012 was 1.9€ bn. (comparing with previous years it increases to…show more content…
In addition to this, 8.7% store growth, the company recorded space growth of 11.4% as it continues to reconstruct and increase storefronts. Related to this growth, this past year Inditex’s operating expenses including start up costs for new stores grew by 14%, along with a 14% increase in personnel expenses and a 9.3% increase in rental expenses. Ordinary capital expenditures reached $1.44 billion, driven by new stores. Despite expansion, the company’s EBITDA margin and net income margin increased from 2011 to 2012, as did return on equity. Inditex essentially has no debt and strong cash reserves, allowing it to self - finance expansion projects with cash from operations and even increase dividends during this rapid

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