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Published date
01/15/2009
Language
documents in English
Format
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Type
presentations
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13 pages
Level
Advanced
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What are the reasons of Zara's success?

  1. Introduction.
  2. Inditex group.
    1. Localisation all around the world.
    2. Global strategy.
  3. A particular case: Zara.
    1. Zara's success story.
    2. Zara's strategy.
    3. Zara's competitors.
  4. Conclusion.
  5. Bibliography.

In 1973 Amancio Ortega Gaona, Inditex Group president and main shareholder, created a textile company, which specialised in producing dressing gowns and underwear. Two years later he opened the first Zara store in La Coruña. Nowadays, the Inditex Group is the most successful in the Spanish textile sector. It is a thriving multinational and one of the largest multinationals in Spain. Inditex group is located in most countries, in particular, Europe and North America. Its success is due to its original strategy which is explained in this motto: open the doors of the fashion world to everybody by affordable prices. Its presence in most of the countries and its strategy are aiming to attract as many customers as possible. Indeed, inditex group has grown quickly that is why we chose to analyse the main reasons of Inditex and Zara success. Firstly, we will discover the group Inditex through its presentation and history, then the most famous brand of this group which is Zara and especially how it managed to become a top brand all around the world.

[...] 1988: The opening of the first ZARA store outside Spain occurs in December 1988 in Oporto (Portugal) 1989 - 1990: The United States and France are the next market in which the group targets along with the opening of outlets in New York (1989) and Paris (1990). 1991: The birth of the PULL&BEAR chain and the purchase of 65 per cent of the MASSIMO DUTTI group 1994: INDITEX continues to open new international markets: Mexico in 1992, Greece and Belguim in 1993 and Sweden in 1994. [...]


[...] To keep a high level of reactivity, Zara’s production is in Europe, even if the salaries are higher. The need to reduce prices is high to keep competitive advantage. That is why the production in Zara’s factories is highly automated, to reduce workforce cost. - Zara’s retail strategy The production cost is also reduced with an original retail strategy. Zara organised the distribution sector as a global and integrated activity. The retail chain is vertically organised, from the production to the supply of the stores. [...]


[...] As clothes are kinds of products which are very visible, consumers’ personality is highly involved in the choice process. Clothes can be used by customers to display their personality and the person that they are or that they wish to be. That is why Zara is, like its competitors, positioned on some specific market segments. Trafaluc: Young woman fashion addict Basic: Seeker for low prices Woman: Urban woman seeking for well designed clothes To synthesise these three different consumer personality traits, Zara is aiming to produce fashion and high quality clothes at low and middle prices. [...]

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