Category winner: Zara: The World’s Largest Fashion Retailer
Who – the protagonists
The top management team including Pablo Isla, CEO of Inditex; Jesús Echevarría, Chief Communications & Corporate Affairs Officer; Jose M. Álvarez Gallego, Director of Corporate Development; and Miguel Díaz, Zara’s Finance Director.
Zara is the flagship brand of the Spanish retail conglomerate Inditex and the world’s largest fashion retailer.
During the last decade, Zara had repeatedly defied predictions that it had reached the limit of its business model. In 2014, it seemed to be continuing its phenomenal growth into the future. Nevertheless, many observers still wondered whether it needed to modify its business model and operating systems to account for its increasing size and global footprint.
Amancio Ortega Gaona began working as a delivery boy for a shirtmaker when he was only 13 years old. In 1963, when still in his 20s, he started Confecciones GOA in La Coruña, Spain, to manufacture women’s pyjamas for sale directly to wholesalers. In 1975, when a German customer cancelled a sizable order, the firm opened its first Zara retail shop in La Coruña.
Zara established retail operations in all the major Spanish cities during the 1980s, and in 1988 opened its first store abroad, in Porto, Portugal, followed by New York City in 1989 and Paris in 1990. By 2014, Zara had over 6,600 stores in 88 countries worldwide.
‘We know that this business is an art, we try on a daily basis to add science to that art, but it is still an art.’ - Miguel Díaz, Finance Director
How can such a large company continue to react to fast-moving global markets so accurately and rapidly? Could it continue to design, produce, distribute and sell new products in as little as two weeks when many firms in the industry took several months? And was it possible for Zara to continue to grow at such a phenomenal pace?*This is an updated and extended version of the authors’ Zara case that came 15th in our list of bestselling cases compiled in 2013.
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Kasra Ferdows, Jose A.D. Machuca,