Zara and Inditex Flashcards
How many brands does Inditex have?
8 brands, incl. Zara
What are fast fashion retailers?
- respond quickly to fashion trends
- use less expensive materials to copy latest runway
- allowing them to offer bargain prices
Is Zara a family company
yes
Does Zara manufacture most of its inventory?
yes
Why is 60% of manufacturing located in Europe?
- react more quickly to fashion trends
- reduce transportation costs (from factory to shops)
Sourcing
sources fabric and other raw materials
much funneled through Comditel (100% owned subsidiary):
- dyeing, patterning, and finishing of gray fabric
manufacturing
40% internally
remainder: 2/3 Europe and North Africa, 1/3 Asia
most price-sensitive (basic items): Asia
most time-sensitive (fashionable and risky): internally or close by
Competitors
All have a narrower vertical scope than Zara
Gap and H&M: owned most of their stores, but production outsourced
Benetton: produces internally, but licenses its stores
Manufacturing system
Just-in-time
Central distribution center (in which all merchandise passed through) in Arteixo
low inventory level (thanks to vertical integration which reduced bullwhip effect, and because products shipped to stores twice a week)
Just in time system
- factories heavily automated and focused on capital-intensive pattern design and cutting (and final finishing and inspection)
- all garments (also the ones manufactured internally) sent to 450 workshops in Galicia and North Portugal to do labor-intensive, scale-insensitive SEWING
Flat Management Style
no chief designer and little hierarchy: freedom to respond quickly
Location of stores
- few big stores in high-end urban areas
closing small stores because of online presence
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low spending
word-of-mouth
Retailing
- medium quality for affordable prices
- rapidly changing product lines, rapid turnover, deliberate undersupply, attractive ambience around them
