<Zara: Fast Fashion Case>
1. With which oftheinternational competitors listed inthe case is it most interesting to compare Inditex’s financial results? Why? What do comparisons indicate about Inditex’s relative operating economics? Its relative capital efficiency?
GAP H&M BenettonInditex
ROIC -0.15% 24.16% 11.20% 27.24%
Return on sales -0.06% 9.60% 7.05% 10.46%
COGS/sales 7
ZARA's Three principles
1. Close the communication Loop
InZara stores, customers can always find new products. But they’re in limited supply. There is a sense of tantalizingexclusivity, since only a few items are on display even though stores are spacious. Zara’s retail concept depends onthe regular creationand rapid replenishment of small batches of new goods.
The "fast fashion"syste
in Numbers
Instead of more quantities per style, Zara produces more styles, roughly 12,000 a year. Thus, even if a style sells out very quickly, there are new styles already waiting to take up the space. To produce many styles according to customers’ demand, it keeps its lead time short. Thus, it means information technology, communications infrastructure, distribution management, and design a
onthe most recent fashion trends presented at Fashion Week in both the spring andthe fall of every year. These trends are designed and manufactured quickly and cheaply to allow the mainstream consumer to take advantage of current clothing styles at a lower price. This philosophy of quick manufacturing at an affordable price is used in large retailers such as H&M, Forever 21, Zara, and GAP. The
isto enhance the customers’ lives by providing them low-priced and high-quality products andthe basic clothing line suitable for Koreans. The final goal ofthe company isto positionitself as a national brandandthe best fast fashion brandin Korea andto launch overseas branches in China, the United States and Europe.
b. Sales and Current Marketing Position
After its launching on Novemb