INTERNATIONAL BUSINESS ASSIGNMENT ON:
The Internationalization Process of
Submitted to: Prof. J.K. Pattanayak
HOD - Dept. of Management Studies
Submitted by :
Roll No. - 10226
Branch - Mining B. Tech. with MBA (5 yr. DD)
Zara is a Spanish clothing and accessories retailer based in Arteixo, Galicia, and founded in 1975 by Amancio Ortega and Rosalía Mera. It is the flagship chain store of the Inditex group; the fashion group also owns brands such as Massimo Dutti, Pull and Bear, Oysho, Uterqüe, Stradivarius and Bershka.
It is claimed that Zara needs just two weeks to develop a new product and get it to stores, compared to the six-month industry average, and launches around 10,000 new designs each year. Zara has resisted the industry-wide trend towards transferring fast fashion production to low-cost countries. Perhaps its most unusual strategy was its policy of zero advertising; the company preferred to invest a percentage of revenues in opening new stores instead. This has increased the idea of Zara as a "fashion imitator" company and low cost products. Lack of advertisement is in also contrast to direct competitors such as Uniqlo and United Colors of Benetton.
Zara was described by Louis Vuitton Fashion Director Daniel Piette as "possibly the most innovative and devastating retailer in the world." Zara has also been described as a "Spanish success story" by CNN.
The success of the Zara concept is reflected in the impact that the company has created in the fashion industry that brought changes in the organizational methods of other clothing retailers, namely Benetton and Mango (Cinco Dias, 2003), and has even obliged luxury fashion brands like Gucci and Burberry to increase the rotation of their goods and develop sister brands to expand their customer base (Fernie, et al., 1997; Foroohar, 2005).
The Concept of Zara:
Zara’s aim, according to Amancio Ortega, founder of Inditex, is to democratize fashion by...