INDITEX (ZARA) Jordi Llena Vila 90892 Operations Strategy PÃÂ¤r ÃÂ hlstrÃÂ¶m Stockholm School of Economics Index Index 2 History and description 2 The resource perspective 3 How does Inditex reach its customers? Different brands 4 Management 5 Marketing 5 Decision Areas 5 Capacity 5 Supply networks 6 Process technology 6 Development and organisation 7 The market perspective 7 Market Requirements 7 Competitors and market positioning 7 Importance-performance matrix 8 Performance Objectives 9 Recomendations 10 Transition 10 Cannibalisation in commercial areas 10 Logistic plant in Arteixo 10 Sources 10 History and description Armancio Ortega Gaona started as a businessman in the beginning of the sixties creating his own firm of lingerie. He did both the design and the production, first in his own house and later in a rented store. He took advantage of his knowledge and relations from his background as employee in the textile sector in order to obtain: ? Good prices when buying clothes ? Optimization of the clothes.
? Confection y distribution without intermediaries.
? Selling to old customers.
? Lower prices than their competitors.
The first Zara shop opened its doors 26 years ago in La CoruÃÂ±a (Spain), the city which saw the Group's early beginnings and which is now home to its central offices. It was a shop where clothes for women, men and children were sold. This was a market segment already attended by other firms (Gap, C&A or The Next) who offered quality clothes at a reasonable price. With this shop Zara was also taking responsibility of the distribution of its own production, which represented an innovation in the sector. With this strategy, Zara was able to have better margins than its competitors and coul also have lower prices.
At the beginning of the eighties it was necessary an expansion process in order to...