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REV: MARCH 7, 2014 JOHN R. WELLS GALEN DANSKIN Inditex:-(Answered)

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I need your help in answering the following questions (as much detailed as possible) getting the answers from the attached case study, and from external sources if necessary.

Kindly make sure to use Harvard reference styling in the delivered word document.

  1. In?one?page?can?you?summarize?and?assess?this?case?(10?mark)
  2. What?Inditex?strategic?position?in?term?of?Mission,?objectives?and?strategies?(5?marks)
  3. Identify?the?brands?of?Inditex?and?analysis?the?market?position?of?each?along?with?its?unique?selling?position.?(6?marks)
  4. How?do?you?explain?the?financial?portfolio?of?Inditex???and?how?it?reflect?on?its?business?sustainability?(6?marks)
  5. What?are?the?ingredient?of?success?for?this?company?and?explain?what?lessons?other?companies?in?this?business?sectors?can?learn?from?Inditex?case.?(5?marks)
  6. Develop?the?appropriate?matrix?of?SWOT?analysis?when?analysing?the?history?profile?of?the?company?what?are?the?uniqueness?and?characteristics?of?each?top?management.?(5?marks)
  7. Elaborate?and?assess?the?company?online?strategy?and?suggest?how?it?can?be?improved.??(5?marks)
  8. Identify?the?risk?can?be?associated?with?the?future?expansion?strategy?and?outline?strategy?to?overcome?this?risk.?
  9. Outline?the?business?model?of?the?company?and?critically?analysis?it's.?Elaborate?on?the?input,?process,?output?and?feedback?control.
  10. Develop?the?appropriate?KPI?on?the?bases?on?balance?score?card.
  11. Diversification?across?different?cultures?required?element?of?understanding?explains?the?possible?challenges?company?can?face?in?China.?
  12. Refer?to?the?financial?data?attached?to?the?case?develop?matrix?analysis?across?the?eight?brands?the?company?operates?and?what?recommendations?you?can?suggest?for?each?brand.
  13. Identify?the?appropriate?financial?ratio?along?with?their?interpretation?from?the?data?provided?in?the?case.?
  14. If?you?are?going?to?develop?one?more?brand?beside?the?existing?eight,?what?it?will?be?and?why.?
  15. Explain?the?role?of?information?technology?and?business?intelligence?technologies?on?the?company?strategic?objectives.
  16. Refer?to?the?Michael?portal?competitive?model?and?apply?it?to?this?case.?
  17. Explain?the?relationship?of?the?company?operation?components?design,?supply?chain,?distribution?and?stores?and?products.
  18. Elaborate?and?assess?the?pricing?structure?the?company?adopt?and?how?it?can?be?improved.
  19. What?is?your?concern?regarding?the?future?and?why???If?yes,?what?are?they?



REV: MARCH 7, 2014

 


 

JOHN R. WELLS

 

GALEN DANSKIN

 


 

Inditex: 2012

 


 

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In the 11 years since its public offering, Inditex and its flagship brand, Zara, had expanded into 86

 

countries, achieved $21.6 billion in revenue, and become the largest specialty apparel retailer in the

 

world. In marked contrast to the general malaise of the Bolsa de Madrid, Inditex?s share price tripled

 

from 2008 to 2012 and traded at 25 times expected 2013 earnings, a 15% premium over Swedish rival,

 

H&M.1 From 1,080 stores in 2000, it had expanded to 6,009 locations while sales and operating profits

 

grew 25% p.a. over this period. It had also established online stores across 23 different markets, with

 

plans for launches in Russia and Canada during 2013.2

 

Many analysts and observers were concerned at the breakneck speed of expansion and the

 

proliferation of retail banners; Inditex operated 8 different brands in 2012, although Zara accounted

 

for 66% of sales. CEO Pablo Isla, remained confident of future success. He planned to continue store

 

expansion at 8%?10% per year for the next three to five years. He remarked, ?When you have a global

 

presence, you have plenty of opportunities to open stores.?3

 


 

Company History4,5

 

Amancio Ortega Gaono began Inditex as a way to bring high fashion apparel to the market at an

 

affordable price. After years working in the apparel retail industry in La Coru?a, Spain, Ortega left

 

his job in the early 1960s to begin manufacturing trendy designer pieces in cheaper materials and

 

selling these items to local shops. In 1975, Ortega opened his first retail store, Zara. Women flocked to

 

the store, drawn by its inexpensive, fashionable merchandise, and Ortega expanded the Zara chain

 

quickly.

 

In the 1980s, Ortega joined with computer expert Jos? Maria Castellano to design a highly

 

responsive supply chain that could quickly produce the latest fashions. A team of designers would

 

replicate popular items, nearby factories would produce them, and they would be shipped from a

 

central warehouse to stores. Sophisticated proprietary information systems would allow designers,

 

factories, warehouses, and stores to communicate with each other rapidly and avoid fashion misses.

 

In 1985, Ortega restructured the company and named it Industria de Diseno Textil S.A., or Inditex.

 

Expansion in Spain continued under the Zara brand and, in 1988, Zara entered Portugal and, in 1989,

 

the United States. By 1990, Inditex managed 85 Zara stores, generating sales of $694.4 million.6

 


 

________________________________________________________________________________________________________________

 

Professor John R. Wells and Research Associate Galen Danskin prepared this case. This case was developed from published sources. Funding for

 

the development of this case was provided by Harvard Business School, and not by the company. HBS cases are developed solely as the basis for

 

class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective

 

management.

 

Copyright ? 2013, 2014 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-5457685, write Harvard Business School Publishing, Boston, MA 02163, or go to www.hbsp.harvard.edu/educators. This publication may not be

 

digitized, photocopied, or otherwise reproduced, posted, or transmitted, without the permission of Harvard Business School.

 


 

Through the 1990s, Inditex expanded internationally and diversified its brand portfolio. By 2000,

 

35% of Inditex?s stores were located outside of Spain. Zara had added childrenswear (1990), and four

 

new brands had been added to the portfolio; Pull & Bear (1991), Massimo Dutti (1991), Bershka

 

(1998), and Stradivarius (1999). In the process, Inditex?s sales had passed those of Italy?s Benetton,

 

and were now two-thirds the size of Sweden?s H&M, which was Europe?s leading specialist apparel

 

retailer. However, Inditex?s revenues were still only 15% of Gap, Inc?s sales. In 1997, Castellano was

 

named Deputy Chairman and CEO, but Ortega remained chairman, shaping the vision for the

 

company. 7

 


 

2000?2004: Jose Castellano

 


 

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On May 23, 2001, Inditex made its first public offering on the Bolsa de Madrid. Twenty-six percent

 

of the company was floated, with the IPO valuing Inditex at $8 billion. Ortega stated, ?The desire to

 

innovate and constantly improve with which we began this project 36 years ago is the guiding idea

 

that has brought us to the present situation. Accumulated experience is not enough to guarantee our

 

leadership. International expansion is the inevitable objective.?8 The offering made Ortega the

 

wealthiest man in Spain, with a fortune estimated to be more than EUR 4.6 billion.9

 

Over the next 12 months, Inditex?s stock price rose by nearly 50% and analysts became concerned

 

that the company couldn?t fulfill expectations. Javier Valverde, a retail analyst at ING Barings,

 

remarked, ?With this valuation, there?s no room for any disappointment. It?s very hard for any

 

company to keep growing at 20 percent each year. This isn?t like the pharmaceutical industry where

 

you can patent ideas. If a retailer is successful, people will start to copy.?10 Others remained

 

unconcerned. Goldman analyst, Keith Willis, stated, ?The underlying growth story remains, but

 

stocks on this sort of premium rating cannot withstand a bad season.?11

 

Inditex continued to expand aggressively, moving across Europe, Asia, the Americas, and the

 

Middle East (see Exhibit 3). However, this rapid expansion began to draw criticism. In London, the

 

rapid withdrawal of childrenswear from the Regent Street store attracted calls for further research

 

before entering foreign markets.12 Profits grew 10% in 2003, a dip from the 59% growth of the prior

 

year, and comparable store sales growth dropped to 1%. Willis noted, ?They need to expand at a

 

slower rate?they?re growing too quickly. If they can do it, there is scope for a profits rebound next

 

year, but there is now a high degree of earnings uncertainty. They don?t have a lot of room for

 

maneuvering.?13 Responding strongly to concerns about profitability, Castellano publically

 

committed Inditex to maintaining a higher same-store growth rate, aiming for like-for-like sales of 6%

 

in 2004 and confidently stating, ?That is the target of the company and we expect to reach that

 

target.?14 In 2004, comparable store sales growth reached 9%.

 

Analysts also questioned the global viability of Inditex?s supply chain. David Oliver, a principal at

 

a retailing-industry consulting firm, asked ?The question going forward is: how durable is the model

 

as it gets bigger and goes international??15 John Gallaugher, a professor of information systems at

 

Boston College, asked, ?One interesting question is: are they locked in? For Zara for penetrate the

 

United States on a large scale, it would probably have to duplicate its manufacturing and distribution

 

system in North America, perhaps in Mexico.?16

 

Inditex also continued its brand diversification. In 2003, Inditex opened a Zara Home store which

 

offered high-fashion, reasonably priced home and textile pieces. An Inditex spokesman noted, ?The

 

bulk (of Zara Home) is textiles . . . at the end of the day we?re moving with the market we know.?17 In

 

the same year, Inditex launched an intimate apparel brand, Oysho, and hired Sergio Bucher, former

 

head of purchasing and acquisitions at Cortefiel?s lingerie brand, Women?s Secret, to lead it.18 Retail

 

2

 


 

Week commented, ?It seems that wherever opportunities for growth exist, Inditex is getting in on the

 

act.?19 Other analysts, however, exhibited more concerns. One Madrid-based analyst stated, ?They?ve

 

already got eight concepts and to reach the same levels of profitability as before is going to be more

 

and more difficult.?20 The Financial Times asserted in 2003 that the proliferation of multiple store

 

concepts has led to the cannibalization of stores sales.21

 

On February 3, 2005, Castellano announced that he would be stepping down as CEO. A

 

spokesperson from the company stated, ?He will remain in a position of strategic vision for the

 

company, together with the chairman. What is wanted is to reinforce the management.?22 From 1998

 

to the end of 2004, Inditex had grown from 748 stores to 2,244 stores and increased its sales from $1.8

 

billion to $7.3 billion.

 


 

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In July 2005, Inditex announced that Pablo Isla would be replacing Castellano. Isla had previous

 

worked in logistics/international expansion with Altadis, a tobacco company. A spokesman for the

 

fashion group stated, ?We were looking for a young chief executive to head a new generation of

 

managers who will be in charge of Inditex?s expansion plans.?23 Ortega maintained his position as

 

Chairman. Although Castellano had committed to staying on the board, in September 2005, he

 

resigned over a separate financial conflict with Ortega.24

 


 

2005?2012: Pablo Isla

 

As the new CEO, Pablo Isla was committed to bringing costs under control and increasing the rate

 

of international expansion. His first strategic plan, ?Reduce three,? intended to expand margins by

 

reducing the rate of cost growth to below the rate of sales growth within three years. Inditex achieved

 

this plan within 12 months but refused to declare the project completed. Marcos Lopez, the director

 

of capital markets of Inditex, remarked ?We want to send a very clear, transparent message to the

 

market, and that is of stability. There is a series of objectives, it?s not just closing a factory, it?s

 

micromanagement. We can?t complete a three-year plan in its first year.?25 The market applauded

 

Isla?s moves. Javier Amta, an analyst with Banesto Bolsa, wrote, ?Isla is a good manager and team

 

coordinator, and will certainly leave his stamp on the company.?26

 

Isla also worked to refine the supply chain and increase Inditex?s ability to respond to shifting

 

market trends. In 2005, flat like-for-like sales during one quarter were transformed into 7% growth

 

when a renewed collection hit shelves and stoked customer demand. Isla stated proudly, ?We were

 

able to react early with the introduction of new collections.?27

 

Isla also pledged to increase international expansion. By 2006, Inditex has grown to 3,131 stores.

 

The Asia-Pacific region had grown by 73% over the past year, the Americas, by 19%, and the Middle

 

East/Africa region, by 15% (see Exhibit 3).

 

By 2006, Inditex had overtaken H&M as Europe?s largest specialty clothing retailer. Buoyed by

 

this success, Isla increased the dividend 40% in 2006, bringing dividend payments to 52% of net

 

profit. Isla also pledged to distribute 50% of total net profits as dividends on an annual basis.28

 

The economic downturn of 2007?2009 did not affect Inditex significantly. Isla stated, ?We are not

 

seeing this weakness up to now. . . . We have lived in this kind of environment before.?29 Luca Solca,

 

an analyst at Sanford Bernstein, wrote, ?Right now, people are only going to spend on the right

 

product and Inditex is better at supplying the right styles and products than rivals.?30 Sales dropped

 

by 5% in 2008, compared to 7.8% at Gap and 11% at H&M. In 2009, Inditex?s sales rebounded and the

 

company passed Gap as the largest specialty apparel retailer in the world.

 

3

 


 

Inditex continued expansion during the economic downturn, growing from 3,691 stores in 2007 to

 

4,607 stores by 2009. In 2008, Inditex launched Uterq?e, an accessories and footwear chain that

 

specialized in leather goods. Thirty stores across Spain, Portugal, and Greece were planned for the

 

first year of the launch.31 Pablo Isla commented on expansion and growth during a recession, ?We

 

continue to see many growth opportunities. There are markets where we?re just beginning, and there

 

are markets which remain very fragmented, where we?ve been present for many years but where our

 

market share is very low.?32

 


 

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In 2010, Isla opened Inditex?s 5,000th store, and he increased Inditex?s global footprint by 9% p.a.

 

between 2010 and 2012. Growth focused in Asia and Europe, with China receiving the most

 

investment. Isla noted, ?Thinking about the next five to ten years, China will be a very relevant part

 

of our expansion. The Chinese people like fashion very much. The opportunity is very big.?33 In 2010,

 

Inditex also expanded into India, in association with Tata Group.34

 

In 2008, Inditex began expanding online. The first portion of the company to go online was Zara

 

Home.35 In 2009, Inditex announced that Zara would begin to sell its clothes online by 2010. Anne

 

Critchlow, an analyst at Soci?t? G?n?rale, noted ?Zara going online will be taken as a strong positive

 

by the market. It had been falling behind in ecommerce.?36 In 2010, Zara rolled out online store access

 

in six European countries and, in 2011, it launched its U.S. store online. Inditex had spent 24 million

 

euros and two years in preparation for the US launch.37 In addition to a webpage, Inditex also

 

launched a Zara app for the iPhone, which received more than one million downloads in its first

 

three months.38 H&M, Zara?s closest competitor, had not announced a launch date for its U.S. site.

 

Of his online expansion plans, Isla stated, ?It basically follows the same model as our regular store

 

expansion. For us to enter a new country has a very small cost because with our twice-a-week

 

delivery model we have few start-up costs. We don?t need large logistical infrastructures, marketing

 

departments, or big central operations.?39 Soci?t? G?n?rale analyst, Anne Critchlow, spoke favorably

 

of Inditex?s digital expansion strategies. She noted, ?Inditex has low penetration in the vast majority

 

of its 85 markets, which means that online is giving customers access to Inditex?s concepts for the first

 

time as large numbers of them won?t be able to access a store easily.?40

 

In the beginning of 2011, Amancio Ortega handed over the chairmanship to chief executive, Pablo

 

Isla.41 Isla described the shift in power as representing ?the complete professionalization of the

 

company.?42 However, some insiders, speaking on conditions of anonymity, worried that Ortega

 

represented the ?muse? of the production team and that Inditex?s fashion tracking would fall off

 

without his support.43

 

The European economy continued to struggle in 2012, but Inditex?s international scope allowed

 

the company to continue posting strong sales growth. In 2012, Spanish sales only accounted for

 

around a quarter of total sales.44 Analysts at Chevreux noted, ?Our feeling is that Inditex has

 

managed to offset weak sales in southern Europe with online and Asian sales growth.?45 However, a

 

weaker purchasing climate in Spain still translated to a 1% sales growth from Inditex?s Spanish stores

 

over 2011.46

 

In 2012, Inditex rolled out online platforms for all eight of its brands and extended its Zara

 

platform to more than 20 countries, including China.47 Plans for 2013 included an online launch in

 

Russia.48 In 2012, the Zara website claimed two million daily hits while the other brands achieved a

 

combined one million daily hits.49 Additionally, Inditex began investing in larger store formats in

 

order to frame its physical locations as showrooms for later digital purchases. The company increased

 

capital spending in 2013 by 14% in order to achieve this end.50

 


 

4

 


 

Brands in 2012

 

In 2012, Inditex operated eight different brands: Zara, Pull & Bear, Massimo Dutti, Bershka,

 

Stradivarius, Oysho, Zara Home, and Uterq?e.

 


 

Zara

 

Zara sold high-fashion apparel, footwear, and accessories for women, men, and children. Stores

 

were sectioned into areas for each demographic and a dedicated store manager ran each section.

 

As of 2012, Zara had 1,925 stores and sales reached $14.3 billion, comprising 66% of Inditex?s total

 

revenue. Zara?s stores averaged 11,238 square feet and 1,465 (75%) of them were located outside of

 

Spain. In 2011, Zara entered the southern hemisphere, a traditionally difficult market due to the

 

reversed seasons. Inditex planned to expand Zara by 110?115 stores in the coming fiscal year.51

 

Zara?s main competition included: Next, Gap, French Connection, Monsoon, Kookai, H&M, and

 

Top Shop.52

 


 

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Pull & Bear

 

Pull & Bear sold casual, lower-priced clothing for young men and women. Inditex described Pull

 

& Bear as ?free-and-easy fashion.?53 In 2011, Pull & Bear began opening a new store design inspired

 

by New York City lofts. These casual stores had integrated technology hubs to encourage customers

 

to share new outfits and their retail experiences. To celebrate the 20-year anniversary of Pull & Bear

 

and the customers who have grown with them, the brand launched a ?Heritage Collection? and ?Pull

 

& Bear for Kids.?54

 

By 2012, Pull & Bear had 816 stores, averaging 3,356 square feet, and revenue reached $1.5 billion.

 

538 stores, or 65% of its total stores, were located outside of Spain. Inditex planned to expand Pull &

 

Bear by 40?45 stores in the coming fiscal year.55 In 2011, Pull & Bear had an online presence in 13

 

European countries.

 

Pull & Bear?s main competition included: Green Coast, Abercrombie & Fitch, Urban Outfitters,

 

and Quiksilver.56

 


 

Massimo Dutti

 

Massimo Dutti focused on ?contemporary, fashionable clothing for business, evening and casual

 

needs.?57 The brand?s main consumer was 25 to 45 and more affluent than Inditex?s other brands. In

 

addition to its internet launch in 2011, Massimo Dutti also launched ?MD Journal,? a

 

?communications platform with recommendations, lifestyle keys, cultural events, and news.?58

 

Massimo Dutti also expanded its product line to offer made-to-measure suits and shoes.

 

By 2012, Massimo Dutti had expanded to 630 stores, averaging 2,940 square feet and sales reached

 

$1.5 billion. 387 stores, or 61.4% of its total stores, were located outside of Spain. Inditex planned to

 

expand Massimo Dutti by 45?50 stores in the coming fiscal year.59 By 2011, ten European countries

 

could purchase Massimo Dutti online. .

 

Massimo Dutti?s main competition included: Hugo Boss, Zegna, Polo Ralph Lauren, Donna

 

Karan, Banana Republic, and Jigsaw.60

 


 

Bershka

 

5

 


 

Bershka?s targeted demographic was girls and women aged 13 to 23, the youngest focus of all

 

Inditex?s brands. In order to attract this group, Bershka designed its stores to be lively social spots,

 

with music, food, movies, and hairdressing.61 In 2011, Bershka opened a four-floor store in Toyko

 

that incorporated a glass fa?ade and a large audiovisual display. This was followed by another store

 

in Berlin which also emphasized the avant-garde brand spirit through visual displays.62

 

By 2012, Bershka claimed 885 stores, averaging 4,116 square feet, and sales reached $2 billion. 617,

 

or 70% of its total stores, were located outside of Spain. Inditex planned to expand Bershka by 75-80

 

stores in the coming fiscal year.63

 

Bershka?s main competition included: H&M , Forever 21 and Top Shop.64

 


 

Stradivarius

 


 

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Stradivarius offered clothing for young women aged 15?17 who were ?informal and

 

imaginative.?65 In 2011, Stradivarius launched its online store after heavy promotion through

 

Trendtation, a fashion centered social networking site. Stradivarius also launched Stradivas Magazine

 

in 2011, an online lifestyle and fashion magazine.

 

By 2012, Stradivarius had 780 stores, averaging 2,851 square feet, and revenue reached $1.3 billion.

 

489 stores, or 63% of total stores, were located outside of Spain. Inditex planned to expand

 

Stradivarius by 95?100 stores in the coming fiscal year.66

 

Stradivarius?s main competition included: Pimkie, Promod, and Top Shop.67

 


 

Oysho

 

Oysho was founded in 2003 and marketed itself as a small enchanting boutique, simple and

 

welcoming? which sold lingerie, intimates, casual wear, and accessories.68 It aimed to provide

 

women with fun, sexy, and trendy undergarments at reasonable prices. In 2011, it launched a sports

 

line with Adidas marked as the ?GYM collection? that included specialty shoes, apparel, and

 

accessories for fitness activities.

 

By 2012, Oysho had 524 stores, averaging 1,534 square feet, and revenue reached $426 million. 328,

 

or 63% of total stores, were located outside of Spain. Inditex planned expand Oysho by 35?40 stores

 

in the coming fiscal year.69

 

Oysho?s main competitor was Victoria?s Secret.

 


 

Zara Home

 

Zara Home opened in 2003 and offered textiles, furniture, and dishware for the home. Collections

 

were offered under four themes: Contemporary, Classic, Ethnic, and White.

 

By 2012, Zara Home had 375 stores, averaging 2,809 square feet and revenue reached $475

 

million. 213 stores, or 60% of the total, were located outside of Spain. Inditex planned to expand Zara

 

Home by 35?40 stores in the coming fiscal year.70

 


 

Uterq?e

 

Uterq?e was Inditex?s youngest chain and sold ?accessories, fashion extra, and a carefully chosen

 

selection of top-quality fabric and leather garments.?71

 


 

6

 


 

By 2012, Uterq?e had 92 stores, averaging 1,445 square feet and revenue reached $100 million. 51

 

stores, or 55% of the total, were located outside of Spain. Inditex planned to expand Uterq?e by 5?10

 

stores in the coming fiscal year.72

 


 

Operations in 2012

 

Design

 

Each brand had a dedicated design team. Zara employed around 200 designers while the other

 

brands, with smaller and less fashion-sensitive collections, employed around 20 designers each.

 

Inditex?s designers drew inspiration from runway trends, street wear, current events, and other

 

sources to develop 12,000 different designs every year.73 Designers also tapped into Inditex?s

 

sourcing specialists, to ensure that the product could be developed at a competitive price, and

 

Inditex?s store managers, to keep close track of shifts in consumer preference. More than 80% of

 

designs were produced in response to data culled from stores.74 None of Inditex?s labels held to strict

 

seasonal collections. Rather, designs were produced year-round.

 


 

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Supply Chain

 

Of Inditex?s brands, only Zara was back integrated into manufacturing, although it still

 

outsourced more than 50% of its needs. Less time-sensitive pieces were outsourced while more

 

fashion-forward or detailed items were produced in-house. All of Zara?s footwear was outsourced to

 

different factories in Europe and all of its accessories and fragrances were purchased from third

 

parties.75 Even for its own manufacturing, Zara subcontracted some stages of the process. More

 

capital intensive production stages such as cutting were done internally while sewing was

 

subcontracted. Zara?s in-house manufacturing network was comprised of 18 local factories and 400

 

sub-contracted workshops.76 Where most competitors committed to 40%?60% of their product line six

 

months before a season started and had locked in 80% of their line at the start of the season, Zara

 

committed only 15%?25% of its product line six months in advance and had only 50%?60% of its line

 

set by the start of a season.77 Zara also reserved 85% of its in-house factories? production capacity for

 

in-season adjustments.

 

The other seven brands outsourced all of their production.78 In 2011, Inditex operated a network

 

of 1,398 suppliers; 625 in Asia, 457 in the European Union, 130 in non-EU Europe, 122 in North

 

Africa, and 64 in South America.79 Products sourced to Asia were estimated to be 20% cheaper to

 

produce than those sourced locally.80 Inditex did not require contractual commitment from its

 

suppliers, which left the company free to leave suppliers at will if they did not deliver to Inditex?s

 

standards.81

 

In 2011 and 2012, Inditex began promoting and organizing seven major business clusters, in

 

Portugal, Morocco, Turkey, India, Bangladesh, China, and Brazil, which collectively represented 87%

 

of Inditex?s production. Inditex described these clusters as ?spaces of co-operation made up of

 

suppliers, manufactures, trade unions, business associations, and international purchasers with the

 

common objective of promoting a sustainable productive environment in a strategic geographic area

 

for the development of the Inditex business model.?82

 


 

Distribution

 

All the brands followed the same central distribution center model delivering products to stores

 

twice weekly, but each brand operated its own distribution center. If a store was out of a particular

 

7

 


 

item, Inditex could...

 

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