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Analysis Of The Inditex Company (Zara)

2565 words - 11 pages

The Inditex Company is a company based in Spain known as one of the most successful fashion companies in the world. Inditex’s brands include Bershka, Massimo Dutti, Oysho, Stradivarius, Pull & Bear, Uterque, Zara Home, and most commonly known, Zara. Zara is the oldest and biggest brand that Inditex owns. The company started as a small shop in La Coruna first named Zorba. The name was later changed to Zara because there was already a bar nearby with the name Zorba. “It wasn’t long before the brand became a huge success known for its fast fashion. Inditex is a pioneer amoung “fast fashion” company, which essentially imitate the latest fashions and speed their cheaper versions into ...view middle of the document...

It is important that they consider all factors when making these decisions. The cost-benefit analysis will help them to decide whether or not it is worth it to open a store.
​Purchasing decisions help the company understand their customer and provide the merchandise the customer wants. “They also monitor customers’ reactions, on the basis of what they buy and don’t buy, and what they say to the sales clerk: “I like this scooped collar” or “I hate zippers at the ankles” (Hansen, 2012). According to Inditex its sales staff is trained in understanding the importance of the customer and to tell the managers the trends they notice. By working for Massimo Dutti, a brand that Inditex owns, I am aware of this and I do tell my manager the customer’s reactions to the merchandise. I am also aware of the focus on new shipment and keeping the stock fresh. We don’t have a lot of stock because we are always getting new shipments of merchandise. “Merchandise moves incredibly quickly, even by fast-fashion standards” (Hansen, 2012). The central plans for Zara work along the lines of what the customers want. They coordinate with customer reactions and produce merchandise inspired by these reactions, which eventually get distributed out to the stores. This allows customers to buy what they really want. If they really want it and they see it at such good prices they will impulse shop and buy it right away.
​Customers who shop at Zara and other Inditex brands have high demand for the products being sold within these stores. There are many reasons for this great demand; one would be the low price of merchandise. Customers see the merchandise they desire to have for a low price and they know it will not be there much longer. They automatically buy it due to the demand they have for it. The demand chart would be downward sloping; meaning that if prices went up the demand would go down. This is referred to as Law of Demand. The Law of Demand is an important term when it comes to Zara. Most people know that the reason for much of their success is their ability to create decent quality merchandise for low prices and still remain fashion forward, also known as fast-fashion. Income effects are the reason demand is more at lower prices. People feel that their dollar buys more than if they bought it somewhere else. They are getting more for their money in their minds. People naturally love increasing the value of their money.
​According to the article, Zara wanted to maintain its own manufacturing business in La Coruna. This means they must ship over merchandise when expanding their brand globally. This affects their business model and makes it more unique than other typical business models. As a read an article, “Zara’s owner bucks the economic gloom to outgrow Spain’s retail banks,” I learned more about how Zara and the Inditex company keeps its economic prosperity. “Inditex's global reach, broad appeals to shoppers at the top and bottom of...

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