1) For the exclusive ve use ot Y. Sherhan, 2018 Publishing W16431 WHAT BUSINESS
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1) For the exclusive ve use ot Y. Sherhan, 2018 Publishing W16431 WHAT BUSINESS ESS IS ZARA IN? handling of amanagerl suation The aeuthor may have dsgused certain or by any means without the rights opyight hoider Reproduation of his matenial is not covered under authorizabon permission to reproduce materials, contact Ivey Publishing. Ivey anslon, Ondario, Canede NeG ON (519.001.320 (e cases@lvey ce:www.veycases.com e School of Business Foundlation Whiat would 2016 have in store for Inditex and its flagship brand Zara with is -fast fash with z ft had taken years for new competitors to build business modcls that could cffectively Zara's approach. Many would recall the carly deference many had towards Zara and its counter-intuitive busine sthe high Why would anyonc invest in a fashion manufacturer and retailer who produced their clothes in the high cost labour market of Spain (versus Asia), spent very little on advertising, ostensibly overspent on positioning high-end stores in chic retail districts across Europe, carried substantially less inventory thn competitors, manufactured clothes that were, arguably, of a lesser quality and finally, c Iess at the cash register. By all accounts, this approach was viewed as a formula for disaster competitive retail fashion industry harged 15 per in the highly t, the time, most observers were just not forward thinking cnough And, over timnc, Indiextooin proving them wrong By 2014,as uy far, the numbor to sce the value in Zara's approach. unique business model that enabled most obscrvers were just not one fashion retailer in the world by many measures.' It really was its this astounding success. Inditex, however, cou ld not dwell on past successes, as the future was full of significant challenges ith the many new upstart and copyeat competitors who had infiltrated the market. These new firms would, more than likely, also enjoy a good degree of success. Disruptive innovations, such as Zara's business model, inevitably were copied. Examples of how industries evolved around disruptive business models included Southwest Airlines leading the discount airline industry and Wal-Mart dominating the Perhaps it was time for Inditex to reinvent the industry business model, once again. y huet Sherhan in Service Operations Management (MGT 3121) taught by Cory Labanow, CUNY-Baruch College trom JaExplanation / Answer
Zara is successful for the following reasons.
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