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Zara fashion Industry. INTRODUCTION Zara's ... cycle. This allows Zara to react
to current fashion trends, rather than predict them. In ...
Zara fashion. ... In short, this centralized distribution system contributes to the quick
response to fashion which in turn brings more customer visits to Zara. ...
Zara Fashion. ZARA Fashion 1) With which of the international competitors listed
in the case is it most interesting to compare Inditex’s financial results? ...
Zara Fashion. ZARA Fashion ... sensitive. Zara rather competes on fashion. They can
only do that by having that quick response capability. Comditel ...
zara fashion. "What Works?"?Sex Offenders and Community Protection By jack
mehoff CJA 531 Probation and Parole MTW: 7:00pm to 9:40pm ...
Submitted by Mandy1234 on May 26, 2008
Category: Business
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ZARA Fashion
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?
The four companies shown above have very different business models. Inditex owned much of the production and most of its stores. Inditex is thus a vertically integrated company. This made Inditex gain a competitive advantage, which is quick response to the market requirements. On the other hand, The Gap and H&M have a different business model. They owned most of the stores, but outsourced all the production. Benetton had a third business model. It invested heavily in the production, but licensees ran its stores.
The most interesting company to compare Inditex is The Gap. Although The Gap has much higher revenues than Inditex (almost five times Inditex), it incurred a net loss, as opposed to Inditex, which achieved a 23%, return in investment. This is due to the extremely high costs of good sold for The Gap. This could be caused -at least partially- by the complete outsourcing of the production. They do not have enough control over the production costs. Although The Gap has larger market share than Inditex and has equity almost double that of Inditex, Inditex is much more profitable.
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2) How specifically do the distinctive features of Zara’s 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 manufacturers’ selling prices.
Zara sources fabric, other inputs, and finished products from external suppliers. It...
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