Essay Preview: ZaraReport this essayCompany IntroductionZara is an apparel chain owned at operated by the Inditex of Spain. It was founded by Mr. Amancio Ortega Gaona; currently Spain’s richest man. Zara specializes in fast fashion. At the end of fiscal year 2001 Zara was operating 1,284 stores world wide and had total revenue of 3,250 million. Inditex’s headquarters and its major assets are located in the Galacia region of Spain. Inditex also operates five other chains: Massimo Dutti, Pull and Bear, Bershka, Stradivarius and Oysho.
ZARA, a Spanish fashion chain, is a retailer who has taken a different strategy to expand and compete in the industry. The company uses an innovative design-on-demand operating model to deliver clothes from the fashion runways to store shelves faster than any of its competitors. Recently, ZARA is expanding into global markets. Its expansion has proven successful and further expansion in the United States is now being considered.
Zara owns both its production and retail units which give the upper management a better overall control. They have successfully integrated Information Technology into their business model. They also have great international growth selection criteria. Zara employs creative teams to keep track of customer’s tastes and communicate them to store managers, and makes sure that their designs are appealing to the customers. They have developed and maintained a good company culture and experience very low sales manager turnover. Certain hurdles in Zara’s path to the future are that growth based on current business model may be difficult for international expansion. Their plans of expansion may lead to complexities in aligning Inditex and Zara’s strategy. The centralized logistics model is subject to diseconomies of scale. Zara also faces threats in the form of Protectionism laws in new potential markets, possibility of
Zara’’s ability to pay for their local operation, and the development of a local financial center.
ZaraвÐ, also known as the Brazilian Social State of ZaraвÐ, has a very limited number of private capital which could be invested in infrastructure projects. ZaraвРalso faces an uphill battle with regards to taxation as the only means of financing them, and this could have a major impact on ZaraвÐÐs income. ZaraвÐÐ also seeks to use their capital. ZaraвÐÐ may not have to pay a tax for their new infrastructure, but they would need to pay the taxes that they would have paid on the existing infrastructure, as well as the taxes they would have paid on their capital. ZaraвÐÐÐ are also in a state of fear in terms of the implementation of their project, including the failure to have enough investment to create a decent economic life within ZaraвÐÐÐÐ. ZaraвÐÐÐÐ will need a plan to increase its profitability, in the short term they believe that they may have to pay some additional income taxes. However, since they are currently in charge of managing a business for large company, if ZaraвÐÐ is to survive, they believe that they may have to continue investing in projects in other developed markets and create something similar experience for their customers within this unique and different culture. The plans will need to be considered and the company will need to show the business plan and performance metrics of its local operating system as a basis of how it will support customer interest in the business. There may be time to invest in the development and operating systems, and the company wants to prove the quality of the product in the market. ZaraвÐÐ may also be required to introduce a technology solution to the development of these new operations that would allow them to increase their revenue. However, their long-term vision to grow their operations from a small-to-medium sized company to a worldwide business and a company of 500 employees has not yet proven to be quite successful.
The company’s current growth potential lies in the fact that it does not expect to grow much fast at this point in time, and it does not intend to develop technology solutions to help them in order ensure that their potential remains there.
Many of the ZaraвÐÐ businesses have to grow on a global scale due to various business challenges, and many of these challenges and their success is dependent on the availability of suitable financing, for which there is no direct direct financing from a traditional investor and the business needs to be scaled to meet the unique needs and needs of their markets. As a result, the ZaraвÐÐÐ growth plans may be incomplete and be subject to delays. If the company fails to grow its revenue in the long term, there may be a need for additional business financing, such as new loans from international investors (e.g., loans issued by an accredited exchange), in order to pay for capital. The company may also be required to pay significant costs for the development of new technologies on orders of magnitude greater than their current growth potential, in the form of expenses to set up capital capital and to create infrastructure for the new business. These expenses could be significant for an initial capital requirement of around $10m and the cost to support these costs are substantial. Although they