Zara Case Study

986 WordsJul 31, 20074 Pages
Zara is the flagship brand of the Spanish retail group, Inditex SA, one of the super-heated performers in a soft retail market in recent years. When Indtiex offered a 23 percent stake to the public in 2001, the issue was over-subscribed 26 times raising Euro2.1 billion for the company. Zara is unique model in business world today it has its own principles which may varies from its competitors in the same industry starting from production strategy ending with supply chain management strategy, these strategies has to be examined carefully to analyze the this leading example. At the end of 2001, Zara operated 507 stores around the world, including Spain (40% of the total number of Inditex), with 488.400 square meters of selling area…show more content…
Question 2: How specifically do distinctive features of Zara business model affect its operating economics? Specifically, compare Zara with an average retailer with similar posted prices. In convenient to assume that on average retail selling prices are about twice as high as manfactures 'selling prices. Zara 's business model have many factors each one sure has an affection on operating economics. These model characteristics has affection in operating economics : 1-Distribution management: Zara has the state-of-the-art distribution facility with minimal human intervention. These facilities which is owned by Zara consists of high tech distribution system insure that no styles sits around very long at head office and trucks moves more than twice every week to deliver these styles in to their destination smoothly and safety. This system costs a huge number of money which affect Zara statements and operating economics by increasing assets and non-operating expenses (209 millions in zara). 2-Working in their own outlets: Zara didn 't give any kind of license to any distributor till now .they work in their own outlets that costs them a lot of money to acquire these distinguished internationally stores that affect the fixed assets of Zara . 3-Depend on technology: Technology is at the heart of Zara 's business, starting from machines in their plant , PDA with their showroom mangers to very high sophisticated

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