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ZARA - A Case Write-upSubmitted by Saurabh Sao, MBA 2014-16, Jindal Global Business School.BUSINESS OVERVIEWZARA is a Spanish clothing and accessories retailer based in Arteixo, Galicia. Founded in24 May, 1975 by Amancio Ortega and Rosalía Mera. Zara needs just two weeks todevelop a new product and get it to stores, compared to the six-month industry average,and launches around 11,000 new designs each year. Zara was described by Louis Vuitton Fashion Director Daniel Piette as "possibly the mostinnovative and devastating retailer in the world. Zara has over 2,100 stores strategicallylocated in leading cities across 88 countries. Zara's designers and customers areinextricably linked. Specialist teams receive constant feedback on the decisions itscustomers are making at every Zara store. Zara's approach to design is closely linked totheir customers. This feedback inspires Zara's creative team which is made up of over200 professionals.Zara has continually maintain its mission to provide fast and affordable fashionableitems. Inditex (Industria de Diseño Textil) of Spain, the owner of Zara and five otherapparel retailing chains, continued a trajectory of rapid, profitable growth by posting netincome of €€ 340 million on revenues of €€ 3,250 million in its fiscal year 2001. Around the world:Zara1.763 Pull & Bear817 Bershka899 Oysho529 Uterqüe91 Zara Kids171 Massimo Dutti630 Stradivarius794 Zara Home364 TOTAL6.058 Inditex is a global specialty retailer that designs, manufactures, and sells apparel,footwear, and accessories for women, men and children through its chains around theworld. Zara is the largest and most internationalized of the six retailers that Inditexowns. By the end of 2001, Zara operated 507 stores around the world, including Spain. Competitors of inditex:Gap, H&M and Benetton are considered Inditex's three closest comparable internationalcompetitors. Zara, is relatively perceived as more fashionable than all the other threeand prices less than Benetton and Gap but higher than H&M. In these four competitors,Benetton and Gap place at relatively less fashionable and higher price, while Zara andH&M is more fashionable and price lower.
Zara has developed a highly responsive supply chain that enables delivery of newfashions as soon as a trend emerges. Zara delivers new products twice each week to its1,763 stores around the world. Rather than subcontracting manufacturing to Asia, Zarabuilt 14 highly automated Spanish factories, where robots work around the clock cuttingand dyeing fabrics and creating unfinished “gray goods,” the foundations of their finalproducts. Zara has also created a partner network of more than 300 small shops inPortugal and Galacia to handle the finishing work where, the gray goods aretransformed into dresses and suits. Inditex SA grew revenue 10% to $19.15 billion for