Zara Fast Fashion

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1- With which of the international competitors listed in the case is it most interesting to compare Inditex's financial results? Why? What do comparisons indicate about Inditex's relative operating economics? Its relative capital efficiency? Note that while the electronic version of Exhibit 6 automates some of the comparisons, you will probably want to dig further into them.
Background: Inditex is an international fashion retailer that designed, manufactured and sold apparel, footwear, and accessories for women, men, and children through Zara and other five chains around the world. The six retailing chains were organized as separate business units within an overall structure that also included six business support areas and nine corporate
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The geographical close network by keeping the production close to the headquarters in Europe and keeping the whole team working in the same building might also lead to reduction of the lead-time. Making collaborating and meeting less time taking. In addition, they have carefully integrated a good IT- structure. Further, by owning a big part of the facilities they are able to have better control of the production and are always able to reschedule each factories production plan to concentrate on that part of the collection that is most important at that moment.
In the fashion industry the customer's demand changes rapidly, and what the customers finds fashionable today might be impossible to sell tomorrow. Therefore, to base the future revenue on always offering fashionable clothes depends on good predictions of customers future preferences. The chance for a miss prediction is quite big and knowing that there is a chance of ending up selling the whole collection on discount, or not be able to sell it at all, the prediction of the next fashion has to be prepared carefully.
Zara's short lead-time gives a higher chance for a more accurate predicting the next fashion. This makes them able to meet the customers demand and offer a higher level of fashionable clothes in their

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