Zara and Its International Expansion

Zara is a high-end street store offering the latest tastes in fashion for women, men, and children alike. Amancio Ortego, Zara’s founder, has made the store grow with rapid success in both its home country, Spain, and internationally. One of the distinct reasons why Zara is such a unique company compared to its competitors is its foundation of the quick response system. Today, Zara’s cycle time is six weeks, in which it responds to its customers’ demand very quickly, unlike most stores that take half a year. Overall, Zara is distinct from most apparel stores in its ability to travel globally and from its international strategy.

ZARA in Spain By the early 1980s, the company began spreading beyond the borders of Galicia to the rest of Spain. In 1986, the brand had opened clothing stores in most of Spain 's major cities including Valladolid, Zaragoza, Barcelona, Seville, Valencia, Madrid, Bilbao and Malaga

Zara produces around 1000 new styles every month, which means that fresh fashion trends reach the stores quickly. A typical Zara’s customer visits the store 17 times a year compared to the average of 3 times per year. This high number of styles also means that the commercial teams have more chances to find a winning style.

Zara is established in 1975, as the flagship brand of Inditex group, which founded by Amancio Ortega. In a short period, Inditex group has become one of the world’s top fashion retailers with more than 4000 stores across 82 countries around the world and more than 50% is accounted as Zara’s. Another Inditex brands which operate worldwide are Massimo Dutti, Oysho, Stradivarius, Zara Home, Pull and Bear, and Uterque. By seeing the Inditex’s brands list, it can be concluded that Inditex almost covers all aspect in fashion industry (Zara 2008).

Over the years, what we know as the retail industry has changed. With fast access to information and increasing demand from customers, the retail industry have been fighting to overcome challenges to keep up with the changing times. Zara, a flagship brand under the Inditex Company (Industrias de Deseno Texti S.A) founded in 1975, achieving huge success within the retail industry in most focuses of operation.

Zara is the flagship brand of the Spanish fashion retail giant, Inditex, (Industrias de Deseno Texti S. A.) Founded in 1975 ; this super- heated performers in soft retail fashion market in recent years; is engaged in textile design,

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 brand is well-known for its capability to distribute new clothes to the stores “fast and in a small batch, twice a week”, the store managers order clothes and other items, on a schedule that they follow in all Zara stores, so the new garments arrived just in time. To reach this Zara controls most of its supply chain than the majority retailers do. On opposed to H&M, Zara keeps a nearly all of its production in-house.For Zara, the supply chain is its competitive advantage. In house production allows it to be elastic in the quantity, occurrence, and multiplicity of new products that are gone to be launched. Zara commits only 15 to 25% of a season’s line. And it curls in only half of its line by the launch of the season, sense that up to 50% of its garments are designed and manufactured during the season. If items become highly popular all of the unexpected, Zara respond directly and create a new design in that popular style, so that gets new stuff into stores while the trend is still

Collaboration of chief tasks, strategic use of organizational resources and core competencies contribute to Zara’s competitive advantage. Zara follows vertically integrated supply chain so it exercises control over suppliers. Demand is easily met and manufacturing is easily achieved. It uses Vertical Marketing System (VMS). It has Zara successfully integrate design, production, distribution, and retailing and which has turned it into the world’s fastest-growing fashion retailer. Its design team is having skilled and talented and experienced staff and the designers are regularly updated by stores and sales staff which keep record of moving stock. Its in-house team of production department is also hardworking and producing clothes quickly as it is manufacturing clothes in small batch. The market survey said that people visit Zara often when compared to Zara’s competitors. Its employees wait for one week for selling its stock and meanwhile if stock is not sold then they just take it out from store and then design team try to make better design for customer satisfaction and the design which is not sold their production will be stopped and in this manner it will face only little cost but will be able to attract customers. So its vertical integration system is helping it to gain advantage. Its customers are well aware that its stock will be changing after every week so they visit quite often to this store as they know if they don’t visit regularly then they can miss good stuff and good designer clothes. In the market survey it has been revealed that in Spain top branded fashion store is visited by customers 3 times a year and whereas Zara is visited by its customers 17 times a year so it is clear that Zara is taking advantage of vertical integration (Christopher,

Zara tries to synchronize the supplies to change designs based on customer feedback use Vertical integrating design strategy. Zara designs and manufactures clothes

In 1988, Zara opened its first abroad store in Portugal. The geographic and cultural proximity of the two countries facilitate the business. Later on, more stores were opened regardless of the geographic or cultural distance as the business grew bigger. While there were some areas or countries difficult to enter. For instance, Saudi Arabia, Andorra or Malaysia, countries predicted with small markets and low sales or great culturally distant, Zara franchised as their own subsidiaries regarding the product, store location, interior design, logistic and human resources (Flavian, 2000).

However, Zara control to drop new lines into its stores floor twice in a week. Zara has developed a supply chain which is efficient of getting a trend from the catwalk from their stores in period of one month, while for four to twelve months from its company competitors.

ZARA, a branded Spanish clothing and accessories retailer, was founded in 1975 by Amancio Ortega and Rosalia Mera. It is the flagship retail store of the Inditex group, a fashion group that owns many other brands such as Pull and Bear, Uterque, Bershka, Stradivarius and Massimo Dutti. Amancio Ortega opened the first Zara store in a central street in Galicia, Spain under the name Zorba. Although another store a few blocks away was also named Zorba, the molds of the letters for the sign was already created and it was rearranged, thus coming up with the name Zara. In 1980, the company started its international expansion in Portugal. In 1989, they penetrated the US market and in 1990, they entered the French market. In 2003

Inditex itself is a huge fashion retailer company which owns 8 brands namely Zara, Pull &Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home and last but not the least Uterque. Amancio Ortega is the founder of Inditex, which was established in 1963. Amancio Ortega adapted unique business model, which were innovative and flexible. This made Inditex one of the biggest retailers in the world. In 1975 Inditex established Zara’s first store in downtown A Coruna, Spain. Zara offers fashionable designs for men, women, and kids. They also sell accessories to complete their product lines.

In 1963 a Spanish multinational clothing company known as The Inditex Group, was founded by Amancio Ortega in Galicia Spain. It is made up of 100 companies specializing in textile design, production and distribution. This company started out by introducing a new way of fashion, instead of offering clothing that was long-lasting at an expensive price, they offered clothing in massive varieties at affordable prices. Now Inditex owns worldly famous brands such as, Zara, Massimo Dutti, Bershka, Oysho, Pull and Bear, and Stradivarius, Tempe, Zara Home, and Uterque. These brands have gone on to become corporate owned franchises and have locations all over the world. In 1985 the company had opened 80 Zara stores in Spain alone, and