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3.1: Introduction

  • Page ID
    4518
  • Learning Objective

    After studying this section you should be able to do the following:

    1. Understand how Zara’s parent company Inditex leveraged a technology-enabled strategy to become the world’s largest fashion retailer.

    The poor, ship-building town of La Coruña in northern Spain seems an unlikely home to a tech-charged innovator in the decidedly ungeeky fashion industry, but that’s where you’ll find “The Cube,” the gleaming, futuristic central command of the Inditex Corporation (Industrias de Diseño Textil), parent of game-changing clothes giant, Zara. The blend of technology-enabled strategy that Zara has unleashed seems to break all of the rules in the fashion industry. The firm shuns advertising and rarely runs sales. Also, in an industry where nearly every major player outsources manufacturing to low-cost countries, Zara is highly vertically integrated, keeping huge swaths of its production process in-house. These counterintuitive moves are part of a recipe for success that’s beating the pants off the competition, and it has turned the founder of Inditex, Amancio Ortega, into Spain’s wealthiest man and the world’s richest fashion executive.

     

    Figure 3.1

    Zara stores in Tokyo and Canada

    Zara’s operations are concentrated in Spain, but they have stores around the world like these in Tokyo and Canada.

    Alberto Garcia – Zara – CC BY-SA 2.0; bargainmoose – Zara Store Canada – CC BY 2.0.