1) Which theory is the best representative of Zara’s (inditex’s) internationalization?
2) Please evaluate the competitive strategy of the three world market leaders. Which of the
three will be the future winner with regard to global retailing in the fashion world?
3) What are the advantages and disadvantages of Zara’s (Inditex’s) multi-brand store
strategy?
4) How successful do you think Zara has been in meeting the risk of cannibalization as a
consequence of multi-brand strategy?
5) What are the advantages and disadvantages of going into a joint venture with Tata in
India?
Introduction
Zara (Inditex) is one of the successful fast fashion retailers under Inditex Group founded in
1975 owned by Ortega a Spanish businessman who owns 1830 stores in 82 countries and it
is a vertically integrated retailer, controlling most of the steps on the supply chain (designs,
produces and distributes itself). Pull & Bear, Massimo Dutti, Berksha, Oysho, Zara Home,
Stradivarius, Uterque are the other multi-brands which come under Inditex itself. Low
inventory cost, short lead time, quick response to the market, store is the main promotional
tool, quick delivery and sales has made Zara’s business model distinguish among other
competitors in the fashion industry
-Inditex’s multi-brand success in 2011
-Sales growth of three giants in the fashion industry (including H&M and Gap Zara’s main
competitors)
Key success factors of Zara
– Short lead time
– More styles
– Pricing strategy
– Sell stocks in short term
– Broad target market through multi brand portfolio
– Quick respond to the market
1) Which theory is the best representative of Zara’s (inditex’s) internationalization?
The internationalization practice of Zara started with the opening of a store in Oporto
(Portugal) in the year 1988, through this establishment Zara acquired international market
experience and knowledge. When analyzing Zara’s international expansion Uppsala model
could be considered as the theory behind Zara’s internationalization strategy. Zara
expanded into international markets after exposing and getting the experience from the
domestic markets, starting their foreign operations from culturally and geographically
close countries and then gradually moved to distant countries regardless of cultural and
geographical proximity which they have followed up the steps in the model so far to reach
the international market. By the end of 2011 Zara was operating in 82 countries with 1830
stores located in Europe, America, Middle East, Africa and Asia with Europe being its
largest market by far.
Internationalization Strategy of Zara
– First store in 1975 in La Coruna, North West Spain (domestic market experience)
– Opening of a store in Oporto in 1988 with the maturity of Spanish market
