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Zara: Fast Fashion

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Kristyn Mark

on 2 December 2013

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Transcript of Zara: Fast Fashion

Zara: Fast Fashion

H&M compares best to Inditex’ financial results
They are Inditex's closest competitor
Similar backgrounds- Large international european apparel brands
Net operating revenues are similar when compared to Gap and Benetton
Inditex has lower net operating revenues but has resulted in keeping their operating income higher than H&M
H&M declined to levels comparable to Inditex because of a fashion miss that reduced net income by 17% in 2000 & also because of an announcement that the effort to expand in the US was being slowed down.
H&M has slightly lower prices than Zara
H&M differs from Zara- Outsource production, spend more money on advertising and are price orientated

Business Comparison
Low cost, high control, quick turnaround
Low cost production
Main raw materials externally
Barcelona vs. Hong Kong
Warehouse --> Retail stores
Frequent shipments = Faster turnover of inventory = More control
The Gap (US), Benetton (Italy), and H&M (Sweden)

rapid production of clothing.
capability to design and produce in quickly
competitor take up to 6 months to come out with new styles.
low quantity - chance to buy more of different styles.
Always developing and changing
Reasonable prices.
Compete with prices
Kristyn Mark, Katie Wilkinson, Mae Wojcicki, Miranda McCrea, Maura Treanor, Hillary Brown
extremely visible locations
strategy: hire more designers
strong connections
adding stores
delivery costs cheaper, more familiar
Positive market?
three different modes of market entry
company owned stores, joint ventures and franchises.
How to Grow
more countries
increase shops
growth potential
explore the new markets
avoid danger of competitors growing
ZARA Travels Globally
Fast deliveries
Little time in warehouse
shipments scheduled by time zone
Can only be successful for so long

Men's Zara
How Might ZARA Fail?
Background Information
Amancio Ortega
Textile Design Industries
Backwards vertical Integration
Zara fast fashion
Fast response (trends)
Short supply chain
Quick turn around
"We sell medium quality fashion clothing at affordable prices."
Zara's Core Concept
France, Italy, Germany
India, China
Spain (no outsourcing)
For younger customers
Zara Home
Zara Kiddies
Zara Home Kids
Market Segmentation
"Each of Inditex's chains is
designed to meet the demands
of a different market segment"
Lack of Stores in US
80 countries, 5,500 stores in total
Only 35 stores in 2001
Now 45
Powerful country
$ to be made

No Plus-size
Don't take part in plus-size market
Woman's waist is changing, 25 lbs heavier than 60's
$17 billion in sales LY, only 9% of $190 billion
H&M offers plus size
sizes 1-16
Plus sized swim shoot

"We've had girls come out of the dressing room and start to cry because they finally have clothing that fits them and makes them feel good,"

1. The Gap:
San Francisco
Unpretentious real clothes & Smart casual work clothes
2. H&M:
Off the runway cheap clothing
3. Benetton:
Brightly colored knitwear
Work Cited
"Amancio Ortega." Forbes. Forbes Magazine, n.d. Web. 05 Nov. 2013.

The Associated Press. "Fashion Industry, Retailers May Be
Missing an Opportunity in Plus-size Clothes." The Oregonian. N.p., 21 Oct. 2012. Web. 01 Dec. 2013. <http://www.oregonlive.com/business/index.ssf/2013/10/fashion_industry_retailers_may.html>.

Dishman, Lydia. "The Strategic Retail Genius Behind Zara."
Forbes. Forbes Magazine, 23 Mar. 2012. Web. 29 Nov. 2013. <http://www.forbes.com/sites/lydiadishman/2012/03/23/the-strategic-retail-genius-behind-zara/>.

Ghemawat, Pankaj, and Jose Luis Nueno. ZARA: Fast Fashion. N.p., 21 Dec. 2006. Web. 1 Dec. 2013.

"The History of Zara." - InfoBarrel. N.p., n.d. Web. 02 Nov. 2013.

Stark, Betsy. "Fashion Industry Goes After Plus-Size Market."
ABC News. ABC News Network, 1 Apr. 2013. Web. 01 Dec. 2013. <http://abcnews.go.com/Business/story?id=87259>.
Full transcript