Zara Inc Success - Research Paper Example

In 1963-74 Amancio Ortega Gaona, chairman, and founder of Inditex, begins his business activities in the textile manufacturing sector. The business grows steadily throughout the decade to include several manufacturing centers distributing products to various European countries. The first ZARA shop opened its doors in 1975 in A Coruña (Spain), the city that saw the Group's early beginnings and which is now home to its central offices. Its stores can now be found in the most important shopping districts of more than 400 cities in Europe, the Americas, Asia, and Africa which is indeed a remarkable achievement.

Interesting as it may seem, its first store featured low-priced lookalike products of popular, higher-end clothing fashions. This was of course an instant success as it enabled the people to have copies of the more luxurious clothes at a reasonable price and so Mr. Ortega opened more stores all over Spain.

“ZARA was a fashion imitator. It focused its attention on understanding the fashion items that its customers wanted and then delivering them, rather than on promoting predicted season's trends via fashion shows and similar channels of influence, which the fashion industry traditionally used” – Businessworld. Therefore the business model initially focused on providing people with less costly alternatives to expensive brands. This was primarily done by effectively managing the business with innovative marketing understanding and low-cost distribution systems.

ZARA Stores has 5 basic product lines: Men, Women, Casual, Kids, and Fragrances. As of 2007, these lines consist of 5 sub-sections. These sub-sections are Lower Garment, Upper Garment, Shoes, Cosmetics, and Complements. ZARA offers considerably more products than similar companies. It produces about 11,000 distinct items annually compared with 2,000 to 4,000 items for its key competitors. ZARA currently has stores in more than 70 countries across the globe. Countries with the most number of stores are Spain, France, Italy, Portugal, the UK, Germany, Japan, Mexico, Greece, the US, China, and Russia. It should be noted that in the latest research which covers the brands in 2009, ZARA ranks 50th in the top 100 Brands of the World which is an improvement from its ranking of 62nd in 2008 Top 100 Brands of the World.