How close are they to achieving that advantage?
The Chinese entrants’ core strategy is to obtain competitive advantage by using Cost Leadership Strategy. Not only with the huge amount of resources they attracted from Chinese and foreign investors but with the vast size of investments from Chinese government, they could possibly sell their products at much lower prices than other competitors
costs for physical assets: 37.8%. Higher level of PPE/sales ratio puts downward pressure on capital turnover, thus, ROIC, but thanks to active use of IT and just-in-time inventory system, Inditex has a distinctive competence in inventory management. Compared to other companies’ net working capital ratios of 13%(GAP), 47.5%(H&M), 21.3%(Benetton) which measure efficiency of inventory management,
FINANCIAL MODEL STRUCTURE
ILIA Financial Projections - DRAFT CONFIDENTIAL Page of
ASSUMPTIONS
TOGGLES
REVENUES
ONLY INCLUDE ITEMS WITH 100% PROBABILITY 0 (1=YES, 0=NO)
APPLY PROBABILITIES TO REVENUE FORECASTS 0 (1=YES, 0=NO)
ONLY USE 50% OF ALL NON-100% USER-PROVIDED VALUES 0 (1=YES, 0=NO)
COSTS
INCLUDE PRODUCT DEVELOPMENT COSTS OF WHAT PRIORITY? 4 (1=HIGHEST, 4=LOWEST, 0=NONE)
INCLUDE CAPITAL