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Prize winner
Case
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Reference no. 612-006-1
Authors: Felipe Caro (University of California at Los Angeles)
Originally published in: 2012
Version: 19 October 2011

Abstract

Zara, the flagship brand of the Spanish retail conglomerate Inditex, was one of the leading retailers of fast-fashion, churning out frequent in-season assortment changes of knockoffs of popular runway styles and trendy fashions. The company had received a lot of attention for its centralized distribution model. In the past 10 years, Inditex and more specifically Zara had been studied by MBA students, the world over, to understand its success in distribution and supply chain efficiency. Numerous cases had been written to better understand Zara's operations, marketing, information systems, and overall strategy, but most authors alike had questioned Zara's long-term sustainability. Nevertheless, Zara's net sales reached 8,088 million Euros in 2010, representing an increase of 14% over the previous year and right in line with the average growth it had shown over the last decade. The 'Zara way' proved itself resilient even through an adverse economic scenario and the company sustained ten years of organic growth, but can it do it again? Where should Zara focus its efforts and what should drive its expansion from here? Should Zara localize its operations in China given that it will quickly become its second largest market? Would opening a major warehouse outside Spain jeopardize Zara's success with a centralized distribution model?

Teaching and learning

This item is suitable for postgraduate and executive education courses.

Time period

The events covered by this case took place in Early 2011.

Geographical setting

Region:
World/global
Country:
Spain

Featured company

Zara
Turnover:
EUR 8 billion in sales (2010)
Industry:
Retail, apparel

About

Abstract

Zara, the flagship brand of the Spanish retail conglomerate Inditex, was one of the leading retailers of fast-fashion, churning out frequent in-season assortment changes of knockoffs of popular runway styles and trendy fashions. The company had received a lot of attention for its centralized distribution model. In the past 10 years, Inditex and more specifically Zara had been studied by MBA students, the world over, to understand its success in distribution and supply chain efficiency. Numerous cases had been written to better understand Zara's operations, marketing, information systems, and overall strategy, but most authors alike had questioned Zara's long-term sustainability. Nevertheless, Zara's net sales reached 8,088 million Euros in 2010, representing an increase of 14% over the previous year and right in line with the average growth it had shown over the last decade. The 'Zara way' proved itself resilient even through an adverse economic scenario and the company sustained ten years of organic growth, but can it do it again? Where should Zara focus its efforts and what should drive its expansion from here? Should Zara localize its operations in China given that it will quickly become its second largest market? Would opening a major warehouse outside Spain jeopardize Zara's success with a centralized distribution model?

Teaching and learning

This item is suitable for postgraduate and executive education courses.

Settings

Time period

The events covered by this case took place in Early 2011.

Geographical setting

Region:
World/global
Country:
Spain

Featured company

Zara
Turnover:
EUR 8 billion in sales (2010)
Industry:
Retail, apparel

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