Tuesday, August 19, 2008

Strategy Snapshot: Inditex/Zara

Spanish clothing retailer Zara may be larger than the Gap as of 2008, partially due to a weak dollar, but also due to a strong strategy:
  1. Build a culture focused on hard work
  2. Control key points in the supply chain (raw cloth, pattern cutting, distribution, retailing)
  3. Manage logistics as a core competency. Reduce warehousing time and space, and understand your profit margins and per item contributions
  4. Spend lots on good geography. Build flagship stores in high-end areas to launch the brand, rather than spending lots on advertising. This shortens your time to profitability and frees you from having to scale up
  5. Brand image: safe, chic, low-stress
  6. Generate lots of products. Produce more of the successes, replace the failures
  7. Allow local managers to select product lines, sizes & quantities for their stores. Use the good geography you've purchased and the local knowledge of your managers to positively affect sales

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