Zara
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Transcript of Zara
General Characteristics
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
General Characteristics
1,671 stores in 85 countries
General characteristics
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
Business Model
Design
Manufacture
LogisticsDistribution
Sale
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
ManufactureA 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.
Logistics
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.
Stock at Zara stays for a maximum od 4 weeks on the shop floor and includes many more items each
year than its competitors.
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.
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.
INTERNATIONAL OPERATIONS
• MULTINATIONAL OPERATIONSExporting -> where manufacturing is not profitableFranchising -> to avoid development costsSubsidiaries -> many fully owned for total controlJoint Ventures -> to absorb partner’s knowledge of foreign country
INTERNATIONAL OPERATIONS
Selling product overseas- Only one shop initially in each country- When success is certain, expands in new
market multiplying its stores
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.
INTERNATIONAL OPERATIONS
NUMBEROF SHOPSPERCOUNTRY
Organization Structure
• Horizontal differenciation where communication flows easily
• Internatinal Organization focus on local demands and trends
Grupo_INDITEX_Memoria-Inditex-2011.pdfGrupo_INDITEX_Memoria-Inditex-2011.pdf
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
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
Social responsibility
Essential to maintain correct and stable relationshipswith 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.
Ethics - CSR
Vidya Project India:
• Launched in 2009• 5% of Zara’s total sourcing• 24 lowest rated suppliers
Series of measures that sought to ensure their compliance with Inditex’s Code of Conduct and improve control over the supply chain.- 17 achieved improved ratings. - 3 were discarded because they failed to
provide sufficient guarantees of compliance with the Code
- 4 were discontinued for commercial reasons.
4 points in order to promote environmental protection
I. Taking environmental issues into account and encouraging environmental awareness
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
Environment
Clear to Wear • 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
Safe to Wear• 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
Product health and safety
Thanks for listening
• http://www.youtube.com/watch?v=qhCM0F81vEg