The Zara Business Model

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Introduction

Zara is the most popular and profitable brand of Inditex SA, the world’s largest retail group. The first Zara store was launched in 1975 in La Coruña, Spain; a city which eventually became the central headquarters for Zara’s global operations. In the beginning the store was named Zobra, but after a while the founder and CEO Amansio Ortega has renamed it to ZARA. The first international Zara store was opened in 1988 in Oporto, Portugal. Since then Zara has expanded its operations into 87 countries with 1900 stores located in the most important shopping districts of more than 400 cities in Europe, the Americas, Asia, Africa and Middle-East . During this rapid international expansion Zara has stayed focused on its core concept that creativity and quality design together with a rapid response to market demands will lead them to profitable results and further growth. In order to achieve these results Zara has developed a unique for fashion retail business model that incorporated the following three goals: developing a system that requires short lead times, decreasing quantities produced to decrease inventory risk and number of items in stock, and increasing the number of available styles and/or choices in outlets. Those initiatives helped Zara to formulate a unique value proposition: the combination of the reasonable prices with the ability to offer new/trendy clothing styles faster and more often than its competitors. Let’s take a closer look at the Zara’s business model that helped this brand to get a worldwide success.

Zara Business Model

Customer Segments

The main bases for segmenting consumer market for Zara are geography, demographic, psychographic (interests, life-style etc.).

Geographical segmentation ...

... middle of paper ...

...fashion edge”, Bloomberg Buisness Week, 2013

5. A. Pearson, “The story of Zara-The speeding bullet”, Unique Business Strategies,2012

6. “Zara: IT for fast fashion”, Harvard Business School

7. Bradley Richard Yim ,“High Fashion Low-prices and Logistic in Apparel Industry”, Massachusset Institute of Technology, 2003

8. Amalia Paola Palladino , “Zara and Benetton: Comparison of two business models”, 2011

9. S. Steventhon, “Polka Dots Are In? Polka Dots It Is!”

10. “Inditex. Global Fashion Powerhouse”, MarcetLine Case Study, 2013

11. Suzy Hansen, “How Zara Grew Into the World’s Largest Fashion Retailer”, < http://www.nytimes.com/2012/11/11/magazine/how-zara-grew-into-the-worlds-largest-fashion-retailer.html?pagewanted=all&_r=1&>

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