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ZARA Vision
ZARA is committed to
satisfying the desires of its customers.
As a result we promise
to continuously innovate our business
and
to provide new designs made from
quality materials that are affordable.
His doughter:
Marta Ortega
In 1988 Zaras
company opened the
first store outside
Spain.
p
o
r
t
u
g
a
l
Price
Perceptual Map
X
X
prices
Everyday Low quality
Fashion Value
Sale
Promotion
Feedbac
k
Design
Zara
Display
CONTROL
Cut
Production
Shipment
Sale
Outsource
Outsourc
e
Design
Armani
Display
Co-OP
Outsource
Outsource
Outsource
None
Promotion
Outsource
Hilfiger
Outsource
Outsource
Outsource
Outsource
HeadOffice&
Designlab.
Manufacturing
Logistics
Europe Production
Cost:
$$$$$$$$$$
Asian Production
Cost:
$$
Competitors Copying
Management
Zara
H&M
Target
Benetton
Patagonia
ZARA STORES:
In Zara:
customer
first
ZARA
2
5
4
Onli
ne
store
s
store
in 21
s aro
coun
u
tries
nd th
1947
e Wo
in 20
store
rld in
12
s aro
und
86 co
the W
untr
orld
ies in
in 87
2012
coun
tries
in 20
13
60%
Spain
20%
Europe
20%
Asia
ZARA Summary
Owned by Inditex
Inditex
Inditex Companies
1. Zara
2. Pull and Bear
3. Massimo Dutti
4. Bershka
5. Stradivarius
6. Oysho
7. Zara Kids (Kiddy's Class)
8. Zara Home
9. Uterque
Total Stores (2013)
Number of
Stores (2013)
1781
825
634
910
816
533
166
363
87
6115
Year of
Creation
1975
1991
1995
1998
1999
2001
2001
2003
2008
INDITEX
2012
Revenue
13.79 billion
Operating income 2.522 billion
Profit
1.932 billion
Total Assets
10.95 billion
Total equity
7.455 billion
Employees
120,000
INDITEX Growth
Fiscal Year
2012
2011
12/11
15,946
2,361
6,009
86
120,314
6115
13,793
1,932
5,527
82
109,512
16%
22%
482
4
10,802
Fiscal Year
Net sales (millions of euros)
Gross profit (millions of euros)
Net income (millions of euros)
2013
7,655
4,486
951
2012
7,239
4,313
944
13/12
6%
4%
1%
2013
58.6%
2012
59.6%
2011
58.4%
2013
2,861
2012
2,690
13/12
6%
INDITEX Employees by
Geographical area 2011-12
Employees 2012
INDITEX Employees by
Gender 2012
Waste Management
INDITEX Results
(millions of euros)
INDITEX Stores
INDITEX Markets
2013 13/12
1. Zara
5,004
2. Pull & Bear
530
3. Massimo Dutti 575
4. Bershka
702
5. Stradivarius
463
6. Oysho
152
7. Zara Home
196
8. Uterque
33
4%
13%
17%
5%
2%
6%
30%
-
CAGR
(2 year)
11%
13%
12%
8%
8%
4%
21%
3%
2013
45%
22%
19%
14%
2012
44%
20%
22%
14%
Europe
US
China
Japan
Russian
Federation
Canada
Spain
Portugal
Morocco
Argentina
Brazil
Banglades
h
China
India
Geographical Distribution of
Suppliers to the Inditex Group 2012
ZARA Sales
INDITEX (Business
Structure)
Inditex
Group:
subsidiaries
Inditex
and
its
INDITEX (Business
Structure)
Head office: La Coruna (Spain)
Co-ordinates brands
Manufacturing
Brand Divisions
Logistics (Zara)
Internal
Choolet SA,
Confecciones Fios,
Gonfecciones Goa,
Denlio, Hampston,
Jema Creacione
Infantiles, Samlor,
Stear, Trisko, Zintura,
Glencare, Indipunt
(all based in La
Coruna)
Zara
Tempe, Inditexs
footwear company is
only 50% consolidated
at corporate level, but is
solely responsible for
sourcing,
manufacturing and
distributing footwear
for the group.
External
Inditex works with
around 1,500 external
suppliers around the
world.
E-commerce
ITX Fashions Ltd
100% (Ireland)
Plataforma Europa SA
(Zaragoza, Spain) 50% of Zara women
and menswear, serving
non-Iberian Europe,
Russia and Asia
Plataforma Logistica
Leon SA (Leon, Spain)
Zara Home and Zara
distribution
Plataforma Logistica
Meco SA (Madrid,
Spain) manages Zara
childrenswear
Inditex model
Customer
Store
Design
Sourcing
that
requires
ZARA Objectives
Maximize Profit:
Transform
Objective/Expectation
+ Price
+
-
ZARA fashion
+
Fashion
ZARA
(New)
ZARA Objectives
ZARA Objectives
Shipping: From
Logistics centres to
stores, road and air
Finishing: Garments
are pressed, dressed
and quality checked
Design, Product
and market Cycle;
1. Final design : 1 day
2. Manufacture : 3-8 days
3. Transport
: 1 day
4. Selling
: 17-20 days
TOTAL : 22-30 days
Samples: Prototypes
made in-house and
by suppliers
Spreading: Material
for garments laid out
in layers and marked
Cutting: A machine
cuts the fabric according
to the patterns
ZARA Strategies
MIS
Production
&
distribution
Objectives
Design
Marketing
ZARA Strategies
Production & distribution
Maintain quality
Cost leadership
High bargaining power to suppliers
Fast distribution system
Design
Coordinate with R & D and stores
to get the new trends
Ability to produce new trends
ZARA Strategies
MIS
Product distribution system
Improving inventory system
Order information flow stores
ordering system
Marketing
R&D
Market penetration
Market , location of stores , consumer
behavior analysis
MIS
Store
Store
Store
Store
Inventory
Store
Check the
Material availability
then deciding
How much this
product will be
Produce
Design
Close watch
On trend and
Buying Behaviors
Marketing :
Commercial Team
& designer
Market Research
and Analysis
MIS
MIS
Strengths
Ability to recreate fashion
Owned 1947 stores and Active use
of stores
Cost leadership strategy
Differentiated in high price fast
fashion industry
Dedicated supply chain process
Vertical
systematization
of
production process
Efficient distribution and High
Weaknesses
Centralized distribution system
Doesn't spend much money on
advertising
Lack of online stores in many
countries
Repeated sales of out-of-stocks
Low quality
Opportunities
Growth of fashion market
Diverse cultural area
Constant use of social media
marketing strategy
Online marketing strategy
Global market penetration
Distribution center in US
Expanding into potential new market
e.g. China, Australia
Threats
Emerging new comers
Local and Global competitors
Cheaper alternatives may be available
in economic downturn
Zara based in Spain and has a great no
of stores in Europe will dent in revenues
Limitation of design copies
Product Cannibalism
ZARA International
Strategy
Market Selection
Market
Entry
International
Strategy
Marketing
Approach
ZARA International
Strategy
Market Selection:
ZARA International
Strategy
Market Selection:
ZARA International
Strategy
Market Selection:
Consideration
Characteristic or behavior of
Consumers
Country
Character of Consumers
French
German
Price Sensitive
Italian
More Fashionable
USA
Less Trend
Japan
More Trendy
British
ZARA International
Strategy
Market Entry:
Economics
Factor
Market Entry
Consideration
Market Entry
Barriers Factors
Government
ZARA International
Strategy
Market Entry:
Consideration
Economics
Macroeconomics Factor :
tax, political condition, export
tariff
Microeconomics Factor :
Local Competitors
Demand
Location of Store
Government
Regulation from Government
Barriers
Local producers protection issues
ZARA International
Strategy
Marketing Approach:
Consideration
4 P consideration Product, Price,
Promotion
and Placement. Each Country has
different
marketing approach.
Product local preferences, design,
trends
Price different pricing strategy for
each
country. For example: Italy and Paris
has no
problem for price but qualityoriented, but
German has sensitive price.
H&M
-0.06%
9.60%
7.05%
10.46%
1.82
1.96
0.74
1.25
ROA
-0.11%
18.78%
5.25%
13.05%
ROE
-0.27%
24.85%
11.93%
22.88%
Net Margin
Asset
Turnover
Benetto Inditex
n
Focus
on
reducing
response time
Approximately
11,000
new
items per year,
compared
with
2,000-4,000 for
H&M and Gap.
ZARA Forecasting
Near-term forecasts
Customer feedback
ZARA Procurement
Factories:
Single-shift
Change quickly according to
demands
ZARA Warehousing
Stores: Electronically
connected to headquarters
Products:
Selected
Sorted
Routed
Delivered
Local distribution centers
Retail store stockrooms
ZARA Transportation
Distribution: 2 weeks
Transportation network:
Effective and efficient
6-month
Pre-season
Traditional
Industry
Model
Zara
45-60%
15-25%
Start of season
In-season
80-100%
0-20%
Advertisement
Advertisement
+
Markdowns
50-60%
40-50%
Fresh items
Sales%
Not at full
price
30-40%
15-20%
Recommendations to ZARA
KEY PROBLEMS:
Emphasize on high efficiency and fast
production processes
Demotivation of workers
Quality drops
Recommendations to ZARA
ZARA SHOULD:
Recommendations to ZARA
Recommendations to ZARA
INCREASE ADVERTISEMENT
Part of marketing
Recommendations to ZARA
Improve IT Infrastructure
Insufficient
technology
with
modern
Ineffective in future as
continues
to
grow
and
internationally
company
expand
to
deal
References
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ANY QUESTION?