Glo bal expansio n will pro vide the f irm with a mix

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Unformatted text preview: ro m vertical integratio n f all as the partners that supply rivals have mimicked its techniques and have beco me f ar mo re ef f icient.T. Friscia, K. O’Marah, D. Ho f man, and J. So uza, “The AMR Research Supply Chain To p 25 f o r 2009,” AMR Research, May 28, 2009, http:/ / www.amrresearch.co m/ Co ntent/ View.aspx?co mpURI=tcm:7-43469. In terms o f the number o f new mo dels o f f ered, clo thing is actually mo re co mplex than co mputing, suggesting that Zara’s value chain may be mo re dif f icult to co py. Still, H&M has increased the f requency o f new items in sto res, Fo rever 21 and Uniqlo get new lo o ks within six weeks, and Renner, a Brazilian f ast f ashio n rival, ro lls o ut mini co llectio ns every two mo nths.M. P f eif er, “Fast and Furio us,” Latin Trade, September 2007; and C. Ro hwedder and K. Jo hnso n, “P ace-Setting Zara Seeks Mo re Speed to Fight Its Rising Cheap-Chic Rivals,” Wall Street Jo urnal, February 20, 2008. Rivals have a keen eye o n Inditex, with the CFO o f luxury go o ds f irm Burberry claiming the f irm is a “f antastic case study” and “we’re mindf ul o f their techniques.”C. Ro hwedder and K. Jo hnso n, “P ace-Setting Zara Seeks Mo re Speed to Fight Its Rising Cheap-Chic Rivals,” Wall Street Jo urnal, February 20, 2008. Finally, f irm f inancial perf o rmance can also be impacted by bro ader eco no mic co nditio ns. When the eco no my f alters, co nsumers simply buy less and may mo ve a greater share o f their wallet to less-stylish and lo wer-co st o f f erings f ro m deep disco unters like Wal-Mart. Zara is also particularly susceptible to co nditio ns in Euro pe since that market acco unts f o r ro ughly two -thirds o f f irm sales.M. Baigo rri, “Inditex 2011 P ro f its Rise 12% o n Asian, Online Expansio n,” Blo o mberg, March 21, 2012. Glo bal expansio n will pro vide the f irm with a mix o f lo catio ns that may be better able to endure do wnturns in any single regio n. Recent Spanish and Euro pean f inancial dif f iculties have made clear the need to decrease dependence o n sales within o ne regio n. Zara’s winning f o rmula can o nly exist thro ugh management’s savvy understanding o f ho w inf o rmatio n systems can enable winning strategies (many tech initiatives were led by Jo sé Maria Castellano...
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This document was uploaded on 01/31/2014.

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