Zara was founded in 1975 in La Coruña, Spain by Amancio Ortega. It has since expanded to over 1,671 stores across 85 countries. Zara designs and manufactures clothing and accessories for men, women, and children. It is known for its rapid response to fashion trends through a vertically-integrated business model that allows it to design, produce, and distribute new products to stores within 2 weeks. Zara owns factories in Europe to maintain tight control over production while contracting out some garment assembly. It has a highly efficient logistics system that delivers new stock to stores twice per week on average within 24-48 hours. Zara's international success is driven by its focus on local demands

2. General Characteristics
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Founded by Amancio Ortega
Belongs to
First store in La Coruña, Spain in 1975
Expansion into other major cities of Spain
Opening of stores outside Spain in the 1980s
Launch of online shopping in 2010

3. General Characteristics
1,671 stores in 85 countries

4. General characteristics
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Sales: 8,938 million euro
Contributed to the whole Inditex group: 64.8%
Number of employees: 109,512 (INDITEX)
Sector of activity: clothing industry (operating in
textile design, manufacturing and distribution)
In-house production process instead of outsourcing
to low-cost countries

5. Business Model
Design
Sale
Distribution
Manufacture
Logistics

7. Design
• Employing over 200 designers
• Three product lines: men, women and
children
• Zara has people around the world looking for
the new tendencies
• Can produce and distribute new fashion in
two weeks

9. Manufacture
A significant proportion of production takes place in the
group´s own factories.
Subcontracting the garment making
stage to specialist forms located
predominantly in the North-West of
the Iberian Peninsula.
Ability to adapt the offer to customer desires in the
shortest time.

11. Logistics
Stock at Zara stays for a maximum od 4 weeks on
the shop floor and includes many more items each
year than its competitors.
Software: Time between receiving an order at the distribution centre
to the delivery of the goods in the store is on average 24h. For
european (48h for American or Asian stores)
The distribution takes place twice a week: includes
new models.

12. Distribution & Sales
The stores act as a market information gathering terminals, providing
feedback to the design teams
The shop window play a major role, acting as an authentic advertisement
for their chains tin the world´s main shopping streets.
Total integration of franchised stores with own managed: global image in
the eyes of customer around the world.

14. INTERNATIONAL OPERATIONS
• OFFSHORE PRODUCTION
- 80% of production in Europe, much in Spain.
- Allows for control and HQ, but 10 times more
costly than Asia
- Only stitching is not owned, but controlled
through network of Spanish and Portuguese
workshops.

15. INTERNATIONAL OPERATIONS
• MULTINATIONAL OPERATIONS
Exporting -> where manufacturing is not
profitable
Franchising -> to avoid development costs
Subsidiaries -> many fully owned for total
control
Joint Ventures -> to absorb partner’s knowledge
of foreign country

16. INTERNATIONAL OPERATIONS
Selling product overseas
- Only one shop initially in each country
- When success is certain, expands in new
market multiplying its stores

17. INTERNATIONAL OPERATIONS
RELEVANT DATA (end of 2011)
• Entered 5 new markets: Taiwán, Azerbaiyán,
Australia, Sudáfrica and Perú
• Presence in 82 markets within the 5 continents
• Opened 107 stores in 2011; 30 in China, where it
now owns more than 100 stores.
• Launched online shop in America and Japan. The
online shop is now available in 18 contries, with
more than a million visits per day.

18. INTERNATIONAL OPERATIONS

19. NUMBER
OF
SHOPS
PER
COUNTRY

21. Organization Structure
• Horizontal differenciation where
communication flows easily
• Internatinal Organization focus on local
demands and trends

22. Grupo_INDITEX_Memoria-Inditex-2011.pdf

23. Culture
• 82.8% of these professionals being young
women ,employee average age 26 years
• Focused on teamwork, open communication,
and a high level of demand, and it offers
employees flexibility .
• Iniciative ,Ambition

24. Social responsibility
All of Inditex’s and Zara’s activities are conducted:
o - Ethically and responsibly
o - Respecting the environment
o - Including actions regarding product health and safety

25. Ethics - CSR
Essential to maintain correct and stable relationships
with its network of external suppliers worldwide
2001: Code of Conduct for External Manufacturers and Suppliers
• Suppliers must comply with the code before embarking on a
business relationship
• Independent external companies regularly audit suppliers.

26. Series of measures that sought to ensure their
Vidya Project India:
compliance with Inditex’s Code of Conduct and
improve control over the supply chain.
- 17 achieved improved ratings.
• Launched in 2009
• 5% of Zara’s total sourcing - 3 were discarded because they failed to
provide sufficient guarantees of compliance
• 24 lowest rated suppliers
with the Code
- 4 were discontinued for commercial
reasons.

27. Environment
4 points in order to promote environmental protection
I.
Taking environmental issues into
encouraging environmental awareness
account
and
II. Having compliance with the environmental laws that
govern activities, prevent pollution and reduce the
environmental impact of the business
III. Achieving constant improvements to the Management
System, to enhance its usefulness and improve efficient
use of resources
IV. Establishing open lines of communication with
government authorities, local communities and other
stakeholders

28. Product health and safety
• Correct implementation at any phase
of the manufacturing process by
carrying out analyses at any point of
their production cycle
• Regulates those substances whose
use is legally limited
• Developed by Zara in accordance
with the most demanding safety
regulations worldwide
• Verify correct implementation at any
phase of the manufacturing process
by carrying out controls at any point
of their production cycle

29. Thanks for listening
• http://www.youtube.com/watch?v=qhCM0F8
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