Zara Essay

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Report on Zara Rohit Ram BBA+MBA(IB) SEM 5 A1823209007 Zara Zara is the largest and most internationalized of Inditex’s chains. At the end of 2001, it operated 507 stores in countries around the world, including Spain (40% of the total number for Inditex), with 488,400 square meters of selling area (74% of the total) and employing €1,050 million of the company’s capital (72% of the total), of which the store network accounted for about 80%. During fiscal year 2001, it had posted EBIT of € 441 million (85% of the total) on sales of € 2,477 million (76%of the total). While Zara’s share of the group’s total sales was expected to drop by two or three percentage points each year, it would continue to be the principal driver of the group’s growth for some time to come, and to play the lead role in increasing the share of Inditex’s sales accounted for by international operations. Zara completed its rollout in the Spanish market by 1990, and began to move overseas around that time. It also began to make major investments in manufacturing logistics and IT, including establishment of a just-in-time manufacturing system, a 130,000-square-meter warehouse close to corporate headquarters in Arteixo, outside La Coruña, and an advanced telecommunications system to connect headquarters and supply, production, and sales locations. Development of logistical, retail, financial, merchandising, and other information systems continued through the 1990s, much of it taking place internally. For example, while there were many logistical packages on the market, Zara’s unusual requirements mandated internal development. The business system that had resulted was particularly distinctive in that Zara manufactured its most fashion-sensitive products internally. (The other Inditex chains were too small to justify such investments but generally did emphasize reliance on

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