Leong, Andree Paul E.

January 16,

2016
BS-ME

Case Study of Zara: Fast Fashion

Zara is one of the six apparel retailing chains owned by Inditex of Spain. Zara
was founded in 1975 in La Coruna, Spain and is also one of the most renowned and
famous fashion icon. A year after the Initial Public Offering in May 2001, Initex stock
price has increased by half. Because of this increase, Amancio Ortega, the founder
of Intex, became the richest man in Spain after half a century of working as an
errand boy in the apparel trade. Zara has proven its success through the
satisfaction of its customers. Zara has been able to provide the needs of the people
for so many years. One of most significant factors that lead to Zaras success is the
decision made by the management. Such decisions lead to success are possible
after a deep thoughtful process that requires environmental analysis, external and
internal analysis and rational logical decision making process provides plans and
objectives. Hence, Zaras expansion was being considered.
Just like any other business entities, Zaras management was very careful
with regards to expanding. There were a lot of factors that was critical in Zaras
expansion. One of them is the environment, the opportunities and potential risks
prevailing in an environment had to be examined thoroughly. Another factor is the
politics or the government. It is inevitable that political parties meddle in businesses
which was not a problem in Spain, but if in other countries the question is yet to be
answered. Next important factor that needed to be considered is the state of
economy of the targeted country because demands in other countries could be
unpredictable. Business environment is where costumers, competitors and internal
corporate factors are all present at once. Overall business growth is favorable for
new businesses but for Zara its time to invent new domains and to cross
boundaries.
Since the expansion is a risky move for the clothing line, it would be better to
play it safe and not pursue the expansion and just focus on what they already have

in Spain. Yes, they might gain a lot on the expansion but it could also be a loss for
them if things dont go their way.