Contemporary Strategy Analysis, 10th Edition

Case 15Zara: Super‐Fast Fashion*

With sales of €25.3 billion in the 12 months to January 31, 2018, Inditex, based in Arteixo, Galicia, in the north‐west corner of Spain, was the world's biggest apparel supplier. Its founder and controlling shareholder, Amancio Ortego, was estimated by Forbes to be the world's sixth richest person (after Jeff Bezos, Bill Gates, Warren Buffett, Bernard Arnault, and Mark Zuckerberg).

Inditex is famous mainly for its biggest business, Zara, which accounted for 66% of the Group's sales in 2017. In January 2018, there were 2251 Zara stores—the great majority company‐owned and operated—in 96 different countries. The Group's other businesses (ranked by sales) were Pull & Bear, Massimo Dutti, Bershka, Stradivarius, Zara Home, and Oysho. Except for Zara Home (furnishings and tableware), all the businesses are engaged in the design, manufacture, and retailing of fashion clothing (together with footwear and accessories), although each operates independently with a distinctive brand personality and a different target customer segment.

As well as being the core business of Inditex Group, Zara is also the primary exponent of Amancio Ortega's unique approach to the fashion clothing business. Zara's strategy defies most of the fashion world's conventional wisdom: it spends almost nothing on advertising, employs no super‐star designers, seeks no celebrity endorsements, and undertakes most of its manufacture in Spain rather than offshoring it to low‐wage locations. ...