The Inditex Company is a company based in Spain known as one of the most successful fashion companies in the world. Inditex’s brands include Bershka, Massimo Dutti, Oysho, Stradivarius, Pull & Bear, Uterque, Zara Home, and most commonly known, Zara. Zara is the oldest and biggest brand that Inditex owns. The company started as a small shop in La Coruna first named Zorba. The name was later changed to Zara because there was already a bar nearby with the name Zorba. “It wasn’t long before the brand became a huge success known for its fast fashion. Inditex is a pioneer amoung “fast fashion” company, which essentially imitate the latest fashions and speed their cheaper versions into stores” (Hansen, 2012).
The first article I read,
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This means they must ship over merchandise when expanding their brand globally. This affects their business model and makes it more unique than other typical business models. As a read an article, “Zara’s owner bucks the economic gloom to outgrow Spain’s retail banks,” I learned more about how Zara and the Inditex company keeps its economic prosperity. “Inditex's global reach, broad appeals to shoppers at the top and bottom of the market and highly efficient business model have made its shares a safe haven for Spanish investors” (Butler, 2012). Throughout Spain economic downfall from real estate and debt crisis, Inditex has remained prosperous. This shows that this company knows what they are doing and knows how to run their company. “By sourcing closer to its shops and centralizing distribution in Spain, Inditex is able to take decisions on which clothing to produce and distribute much more quickly than rival stores, many of which source 70% or more of their clothing in the far-off Far East” (Butler …show more content…
Nelson Fraiman, a professor at Columbia Business School who studied the Inditex model says, “They have done process innovation very well. Product innovation? No.” In other words, Inditex creates a substantial business model but they are not original when it comes to their product, their merchandise. According to Suzy Hansen, “Inditex denies that it copies other designers. Yet in The New York Times last March, Alexandra Jacob describes a visit to the new Zara store on Fifth Avenue in New York, where she was reminded of Prada, Alexander Wang, Balmain and many other high-end
Shopping is not simply a chore; it is also an experience. Shopping for clothing is a particularly personal decision, and various motivating factors can cause one shopper to choose a particular store over another store. Some consumers go to the store to confirm that they belong to a certain social stratum, others because they enjoy the thrill of a bargain. According to Daniel Miller in ‘Making Love in Super Markets’, the behavior of consumers in supermarkets tends to fall into two categories: ‘treat’ shoppers and ‘thrift’ shoppers.
... fashion industry. I believe through all of their marketing tactics and great leadership they will continue to thrive. Although I am not a customer of the brand, I have found great interest in completing this product to explore and expand and broaden my fashion in the brand. The company has had consistent sales increase and if it continues to utilize its business plans wisely, I believe it will continue to increase.
Paco Underhill has created a way for stores to draw more customers in and spend more money by getting in the mind of the customers. I found some of Underhill’s theories to be true. Underhill’s theories have helped provide research of the actions of consumers inside of American Eagle, Meijer and Hollister, these theories include, the need for shoppers to acclimate to their surroundings, the way customers turn into stores, and by placing most used products in the farthest places away from the
One of the main costs is to manufacture their products. A major reason the companies are moving manufacturing plants to Asia and South America is to lower manufacturing cost. This will lower the cost for the customer and keep each company competitive and allow them to keep a high margin. Another cost is the inventory cost for each company. Each company needs major capital to store their broad catalog of products. This is especially true for Fastenal because one of their niches is time of delivery. Since Fastenal has more distribution plants we as a company are able to get a customer an order in a shorter period of time. The problem for both companies is since the catalog is so broad many products end up staying in inventory for too long raising inventory costs. Also another cost is product development and management. Each company has many products that need to be developed and the customer seems to always want something else. Both companies spend capital to satisfy their customer’s product needs and each company needs to manage product
The ecommerce industry is growing faster than ever. TJ Maxx needs to start focusing more on ecommerce not only to keep up with competition, but also to make sure they do well during weak economic periods. ecommerce, overall, tends to do very well during lackluster economic times. TJ Maxx will be able to cut costs more easily the more they expand their ecommerce business. Our business idea will allow them to expand their ecommerce as we will take over their website and delivery. TJX Companies’ three ecommerce sites accounts for only about 1.0% of the company’s total sales. However, the online channel is a key growth driver and TJX is taking initiatives to improve its online business. The ecommerce sales
The most interesting company to compare Inditex is The Gap. Although The Gap has much higher revenues than Inditex (almost five times Inditex), it incurred a net loss, as opposed to Inditex, which achieved a 23%, return in investment. This is due to the extremely high costs of good sold for The Gap. This could be caused -at least partially- by the complete outsourcing of the production. They do not have enough control over the production costs. Although The Gap has larger market share than Inditex and has equity almost double that of Inditex, Inditex is much more profitable.
Geox’s distribution network is one of its key successes, which has been developed in accordance to each country’s respective distribution structure and calibrated to serve a widespread network of multibrand clients. Additionally, Geox’s marketing technique makes it special in that it does not use models of even celebrities to market. Instead Geox chooses to use images of the product, alone which emphasizes its product’s unique technology. Geox markets itself as an organization that is based upon innovative technology as well as research and development. Another factor that Geox owes its competitive advantage too is its group structure, which helped maintain and expand its impressive distribution network, recognizable brand name, and quality with the use of third part producers. Another factor that Geox owes to its competitive advantage was the fact that it is a one-stop-shop for families and the fact that its brand is so
The fundamental business strategy of Zara is very simple which is linking customer demand to manufacturing, and liking manufacturing to distribution. Zara has been running their business in fashion industry which is susceptible to seasons and quick changing customer tastes. Zara has been approached to and considered their business as a perishable commodity business just like a fresh baked cake or bread to be consumed quickly.
H&M is the world’s second largest retailer, only behind its main rival Zara of Inditex (Petro, 2012). The company currently has 3006 stores in 53 countries. The company does not own any factories. H&M outsources production to network of 800 independent suppliers; 75% in Asia and 25% in Europe. In order to increase the efficiency and productivity of its supply chain, the company strategically locates its network of 20 to 30 production offices close to its suppliers. According to Stockholm Newsroom, the pretax profit of the company for the month of June to August of 2013 is $907 million, which indicates an 11 rise in turnover (Pollard, 2013). The company continuous development plan facilitates its goal for both brick and mortar, and online stores expansion worldwide. The target segments for H&M, a category specialist store, are trendsetters and fashion/money conscious males and females ranging from 16 to 40 years old with income ranging $15,000 to $60,000 annually.
...ame period of 2012. (Inditex, 2012) The solid growth from Zara shows that Zara is successful in building its own brand identity. The high degree of recognition of Zara makes people choose Zara instead of other brand. One of customers who are interviewed said: “Zara is the name naturally came into my mind when I want to go shopping. It just came.”
The business model that sets Zara apart from other clothing retailers is how rapidly the company changes stocks and releases new product lineups. The company averages 12-16 collections annually which equates to more than one lineup a month. Due to stock being limited and the rapid production Zara brings forth, their items are viewed as exclusive promoting further business. Their customers are happy knowing that their specific article of clothing is more “rare” due to only having an average of a two-week window to purchase the clothing. The company specifically targets current trends and has them in the store within 30 days. This maintains the brand’s uniqueness and relativity in fashion.
store managers and frontline personnel, play a critical role in the context of Zara’s business model. Using customised PDAs, store managers constantly communicate customer feedback, either hard data such as orders and sales trends or soft data like customer reactions to a new style or the “buzz” around a new design, to Zara’s HQ where the feedback is used by designers to quickly develop new garments based on customers’ wishes (Ferdows et al., 2004). Frontline employees assist their superiors in collecting the feedback. Zara’s store managers and shop assistants thus close the communication loop between shoppers and Zara’s HQ (Ferdows et al., 2004) and therefore contribute hugely to Zara being able to first understand what customers like and then design and produce it (Buck, 2014). Accounting for their key role, Zara pays store managers an above-average salary and up to 100% of their salary in bonuses if they hit sales targets (Ruddick,
Zara retail’s stores normally placed in the center area or the best location on streets to attract their targets customers. Their target customer is obviously high fashion interested and shop frequently. For example, Zara in Thailand is located in the middle of town and in the center of the mall, which is easy to get by the sky train, bus or car. Everyday Zara has many shoppers coming to the store looking for the new product and some of the people, who is passing because Zara’s store has located in front of the escalator. Especially on the weekends there are crowded and hard to get into the store. The store has decorated with clean and wide atmosphere so it gives customer a good experience when shopping at Zara. Moreover, Zara’s stores design are always have a big window displays and attractive layout to advertise the products to customers because Zara does not spend much on advertisement. Furthermore, the stores are combined with the big entrance that customers are easy to access to the shop. Zara’s stores also decorated with yellow light that effect to the customers shopping time because yellow light provide comfortable feeling and make customers stay longer. In addition, store’s materials are decorated with the classy and glossy tones that refer to the Zara’s position of classy and fashionable brand. In term of weakness, even though he area, which Zara is located is the best area, there are a lot of competition.
Thirdly, the company is committed to delivering superior quality of products and services. It earned a reputation of a convenient and reliable brand that offers the lowest prices, one of the fastest and lowest shipping, widest selection of goods, and many additional features with its services.
Shopping is something that has to be done whether you enjoy it or not to get essentials needed. We all go places where merchandize is being sold for a specific reason. Whether you go to the mall, shopping centers, or your local grocery store, you 'll always encounter many types of shoppers. Shopping isn’t always as fun as it sounds to everyone, but it is something we often do. This is the only way we get products we need, by personally buying them. You have three main shoppers including impulse buyers, list makers, and bargain hunters.