PESTLE analysis of Inditex Essay

Established in 1975 in A Coruña (North – Eastern Spain) by Amancio Ortega, Inditex has grown rapidly to become one of the largest fashion retailers in the whole world competing with the American Gap and the Swedish Hennes & Maurizt (H&M). “In addition to Zara, the largest of its retail chains, Inditex has another seven commercial formats: Bershka, Stradivarius, Massimo Dutti, Oysho, Pull and Bear, Skhuaban and Zara Home (all of the targeting different age and disposable income segments). The group also includes more than a hundred companies associated with different textile, manufacturer, infrastructure and distribution businesses” (Inditex 2006 p.2). Inditex is listed since 23 May 2001

Next, the essay will concern about five performance objectives that help Zara achieve competitive advantage in business. About quality, beauty, affordable prices and fashion are factors leading to magic success of Zara as well as other brands of Inditex, but it is not easy to do that. Amancio Ortega is president of the corporation with 32,000 employees, but he still has habit of operating as a family company with a clever and simple style. Zara operates with closed model from research, design, production, distribution and retail. Diversity, abundance and frequent changes of clothing design have become the biggest competitive advantage of Zara. The competitors expect to have the attraction like Zara. Most customers feel loss or lack

Zara is a Spanish brand of clothing founded by the visionary Amancio Ortega Gaona and Rosalia Mera in Artexio, Galicia. Zara was founded in the year 1975. It is one of the major selling brands of one of the biggest fashion retailer "INDITEX". Zara is now available in 86 countries with total of 1,763 stores worldwide.

The formal legal structure is essential for any organisation who wishes to use the community right to build.(as per localism act 2011).To become a corporate body there are certain rules .

This brings us to diversity and communication throughout the world. The social-culture element includes the norms, values, beliefs and behaviors associated with the demographic characteristics of a given area or region. Multinational companies in particular are faced with the challenge of diverse social cultural differences in the countries in which they operate. Social-cultural considerations are subject to change, so domestic firms must be aware of this aspect of the external environment as well as multinational firms. We live in a diverse world where more than ever communication with the world is key to our business and societies success. One should become more familiar with the world that surrounds us, because we do no surround the world. Our global market continues to grow, and we must do everything in our power to keep up.

Inditex has a total of 1,558 stores operating in 45 countries out of which 550 stores are of Zara. Inditex’s major sales contribution is Zara accounting for 73.3%. Zara presents new style clothes for Men, Women, and Children

Grupo Sans, a leader in Spanish underwear market in 1970s and 1980s, was founded in 1960 in Mataró. Becoming a part of Sara Lee Corporation, the multinational company with the biggest at that time textile division in the world, in 1991, contributed to the growth and development of the company, and has led to the fact that 9 years later(in 2000) Grupo Sans’ income accounted for more than one-fourth of Sara Lee’ income in Spain.

Inditex founder, Amancio Ortega Gaona, started his fashion business in 1949 at the age of 13, as a delivery boy for a local shirt maker in La Coruña, Spain and in a little over a decade was working as shop manager. With the knowledge and experience gained along the way, he began developing his own designs, after which he left his job to start his own business in the early 1960s. With only $25 in startup capital and working out of his sister’s home, Ortega’s vision was to replicate popular fashions using affordable materials, creating high demand clothing that could be sold at lower prices. He sold his gowns, housecoats, and lingerie to his former employer and other local shops. By 1963 he had opened his

By  the  end  of  the  1970s,  there  were  half  a  dozen  Zara  stores  in  Galicia,  Spain.  In  1985,  Inditex  S.A.  was  established  as  a  holding  company  atop  Zara.  Since  then,  its  expansion  gathered  momentum:  the first store outside Spain was opened in 1988 (in Portugal), and, between 1989 and 1998,  the  company  expanded  to  18  additional  countries,  developing  or  acquiring  other  fashion  brands, such as Pull and Bear and Massimo Dutti.  Throughout this process, the Group underwent deep structural changes and went from being  an exclusively Spain ‐ based producing chain in 1980 to deploying, by 2005, company audited  and certified production centers and providers in the Americas, Africa, Europe and Asia. This  new  scheme  posed  new  challenges  for  Inditex,  especially  in  terms  of  labor,  social  and  economic  concerns  regarding  its  employees,  its  suppliers  and  outsourcing  shops,  as  the  company  struggled  to  uphold  the  values  and  principles  inspiring  the  Group’s  CSR  strategies.  Zara was a successful store, and success brings visibility. For several, reasons, both the media  and the NGO community had their eyes set on Zara, a fact the company could not ignore.

Amancio Ortego started clothing factories in Spain, in 1963. In an attempt to integrate the manufacturing with the unpredictable customer demand, he opened the first Zara store in La Coruna in 1997. Zara came under Intidex multinational companyin 1985 and Jose Maria Castellano Rios, who shared the same opinion as Ortego that IT was important for their business, joined the company, who later became the CEO of Intidex in 1997. By 2003, Intidex had 1,558 stores in 45 countries, of which 550 were part of Zara chain.

This client center reinforces an operational structure that includes all phases of the style worth chain (outline, assembling, appropriation and deal in restrictive stores) (Sustainable Business Model, 2014). The client guarantee is additionally the main impetus behind the incorporation of our economic and ecological approaches utilized all through the Group 's production network. Inditex’s biggest competitors are Gap, H&M, and Benetton internationally (Sardar, 2012). Headquartered in Arteixo, Spain, Inditex has emerged as a leader in the fashion world.

Amancio Ortego started clothing factories in Spain, in 1963. In an attempt to integrate the manufacturing with the unpredictable customer demand, he opened the first Zara store in La Coruna in 1997. Zara came under Intidex multinational companyin 1985 and Jose Maria Castellano Rios, who shared the same opinion as Ortego that IT was important for their business, joined the company, who later became the CEO of Intidex in 1997. By 2003, Intidex had 1,558 stores in 45 countries, of which 550 were part of Zara chain.

The U.S. values and beliefs include equality, achievement, youthfulness, efficiency, practically, self-actualization, and freedom. The changes in a social/cultural environment affect the consumer's behavior, which in turn will affect the sales of products. The trends in social/cultural environmental include individuals that will change view of themselves, others and the world around them while moving toward self-fulfillment.

In other words, it refers to ‘the technology issues that impact on how an organization brings its product or service to the market place’. The role of the internet must also be taken into consideration. A company must ask itself if there are any the technological advancements taking place, or if the government is investing on technology research. It is fundamental to keep in touch with the latest technological improvement in order to be more efficient. Businesses are aware that ‘good technological infrastructure leads to the better production resulting in reduced wastage and lower

The unit of analysis is the Zara Group, which belongs to the Spanish company Inditex. It is a very global company which has been selected due to it does an intensive application of ICTs in its processes, mainly manufacturing and distribution ones, as well as its logistical processes. Because of this, it can stand out among its competitors. (María Teresa GARCÍA-ÁLVAREZ, p.998)