Creativity and Entrepreneurship: A Study of Amancio Ortega and Zara

This paper focuses on the concepts of creativity and entrepreneurship and studies them in the light of the owner of the company Zara “Amancio Ortega”. The paper discusses the life and career of Ortega, his innovative ideas and strategies, and how he used creativity and entrepreneurship to make Zara one of the largest retail companies in the world.

Running head: CREATIVITY AND ENTREPRENEURSHIP
Creativity and Entrepreneurship
Name of the Student:
Name of the University:
Author’s Note:

1CREATIVITY AND ENTREPRENEURSHIP
“This defines entrepreneur and entrepreneurship - the entrepreneur always searches for
change, responds to it, and exploits it as an opportunity.”
The above quoted lines of Peter F. Drucker from his famous work “Innovation and
Entrepreneurship: Practice and Principles” speaks volume not only about the concept of
entrepreneurship but also about the ideas which they believe in. It is significant to note that in
the present times the concept of entrepreneurship has gained prominence with the rise of the
various new business organizations (Crofton & Dopico, 2012). Furthermore, the role of the
various entrepreneurs has undergone rapid transformation since the ancient times with the
“advent of globalization and the recent developments in the field of technology as well as
innovation” (Crofton & Dopico, 2012). Creativity is another concept which has gained
prominence in the recent times and it is a reflection of this that the various business
organizations often take the help of this particular concept to formulate as well as implement
innovative strategies which are likely to help them not “only to outrival their competitors in
the same field of operations” (Bridge & O'Neill, 2012). In the opinion of creativity is not the
process of developing or coming up with new ideas or innovations rather it is the process by
means of which the various business organizations as well as the entrepreneurs use the same
concepts or ideas in an innovative or creative manner (Crofton & Dopico, 2012). Therefore, it
would be apt to say that in the present times the concepts of entrepreneurship and creativity
have become an important part of the business world. This paper will focus on the concepts
of creativity and entrepreneurship and try to study them in the light of the owner of the
company Zara “Amancio Ortega”.
In the opinion of many people an entrepreneur is a person who “sets up a business or
businesses, taking on financial risks in the hope of profit” (Bridge & O'Neill, 2012). On the
other hand, the concept of entrepreneurship is “the process of designing, launching and
running a new business, which is often initially a small business” (Kuratko, 2016). The life as

2CREATIVITY AND ENTREPRENEURSHIP
well as the career of Amancio Ortega provides a penetrating insight into the concepts of
entrepreneur and entrepreneurship (Kuratko, 2016). The life as well as the career of
“Amancio Ortega Gaona” is a “rag to riches story” (Schaper et al., 2014). He was born in
the year 1936 in “Busdongo de Arbás, León, Spain” and spent most of the part of his early
childhood in the area of Leon itself (Schaper et al., 2014). He was forced to drop out of
school at the age of 14 years on account of the poor financial condition of his family (Schaper
et al., 2014). It is significant to note that his first job was as a “shop hand for a local
shirtmaker called Gala, which still sits on the same corner in downtown A Coruña, and
learned to make clothes by hand” (Schaper et al., 2014). This job played a significant role in
the later part of the life of Ortega as it was here that he learnt about the cloths industry which
was to play a significant role in the later part of his life. The year 1972 was a very significant
one for Ortega as it was in this particular year that he started his “Confecciones Goa to sell
quilted bathrobes” (Schaper et al., 2014). This particular venture played a significant role in
his life as after this particular venture he started the “first Zara store with his wife Rosalía
Mera” in the year 1975 (Zarahome.com, 2018). The innovative idea used by him for the
establishment of this particular venture soon caught the imagination of the people and
gradually the business of Ortega began to gain popularity. It is significant to note that within
a very short time the business organization has emerged as one of the largest business
organizations not only of the nation of Spain but also of the world (Schaper et al., 2014). It is
a reflection of this that the company currently “is part of the Inditex group (Industrias de
Diseño Textil Sociedad Anónima), of which Ortega owns 59.29%, and aside from over 6,000
stores includes the brands Zara, Massimo Dutti, Oysho, Zara Home, Kiddy's Class, Tempe,
Stradivarius, Pull and Bear, Bershka and has more than 92,000 employees” (Zarahome.com,
2018). In the opinion of many people the leadership skills as well as the innovative ideas used
by Ortega were one of the primary reasons for the enormous success attained by the business

3CREATIVITY AND ENTREPRENEURSHIP
organization within a very short span of time. Furthermore, “Ortega had a net worth of $66.6
billion, making him the wealthiest person in Europe following the death of IKEA founder
Ingvar Kamprad, and the fourth-wealthiest in the world” (Zarahome.com, 2018). In addition
to this, “Ortega is also the wealthiest retailer in the world” (Zarahome.com, 2018). In his
personal life Ortega keeps a very low profile and does not like to take the help of lavish
lifestyle (Schaper et al., 2014). It is interesting to note that till the year 1998 no photographs
of Ortega were available.
In the opinion of Ortega articulated in the “Inditex's 2009 annual report”, “The
customer has always driven the business model… The customer must continue to be our
main centre of attention, both in the creation of our fashion collections and in the design of
our shops, of our logistical system and of any other activity” (Zarahome.com, 2018). In the
opinion of many people this is one of the primary reasons for the rapid success of the
business organization Zara within a very short time (Kirzner, 2015). Therefore, it would be
apt to say that the philosophy of Ortega was to “Obsess over what your customers want”
(Zarahome.com, 2018). The business organization under consideration here places its main
emphasis on the “satisfaction of the customers and also catering to the various diverse needs
as well as the requirements of the customers in the most effective manner” (Kirzner, 2015).
Furthermore, the business organization believes in the concept that “Speed is everything”
(Zarahome.com, 2018). Therefore, with this particular objective the concerned business
organization “Ortega upended the retail world with an aggressive schedule meant to get new
clothes on the rack faster than anyone else in the market” (Kirzner, 2015). Moreover, as per
an article of the CNBC “Ortega's strategy was to refresh the stock in Zara stores twice a week
and receive orders within 48 hours” (CNBC, 2018). Therefore, a particular dress launched at
a fashion week which takes months to reach the other stores takes only a few days to reach
the stores of the Zara business organization (Kirzner, 2015). In the opinion of many people it

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was this speed of service which the concerned company provided to its customers helped it to
“outrival its major competitors in the same field of business” (Kirzner, 2015). Another
important idea used by the business organization is to “Control the supply chain”
(Zarahome.com, 2018). It is a reflection of this that “While other fashion firms have their
clothes made in China due to the cheap labor costs, Inditex sources most of its products from
Spain, Portugal and Morocco” (Zarahome.com, 2018). The business organization taking the
help of the local suppliers significantly reduces the time of transport and therefore is able to
provide very fast services to the customers (Drucker, 2014). Another significant policy which
Ortega used for the business process of the concerned organization was “Stay true to your
roots” (Zarahome.com, 2018). Therefore, the entire mechanism of business process followed
by him was a native one and he did not believe in having a separate office for himself and
liked to work with the employees (Drucker, 2014). It is significant to note that since the
initial days of the organizations he emphasized on the need of innovation and thus he used to
say “Never stop innovating” (Zarahome.com, 2018). He is one of chief believers in the
famous Spanish sayings of “Grow or die…..If you want to innovate, don't focus on the
results” (Forbes Welcome, 2018). These in short are some of the key innovative as well as
creative ideas used by the entrepreneur Ortega which lead to the rise of the organization Zara
as one of the major retail companies of the world.
In the opinion of many people the first job of Ortega in the cloths store helped him in
a significant manner to learn about the various precepts of the cloths industry. Furthermore,
he hailed from a very poor family and thus he was much used to the concept of window
shopping (Parker, 2018). Furthermore, his early stint at the cloths shop also provided him
with the much needed information about the various kinds of cloths and the preferences of
the people when it comes to the various kinds of cloths. Moreover, the brief stint at the cloths
shop also helped him to learn about the various tricks of the trade of the cloths industry and at

5CREATIVITY AND ENTREPRENEURSHIP
the same time helped him to understand the “changing needs as well as the requirements of
the customers in the most effective manner” (Parker, 2018). In addition to these, Ortega
thoroughly analyzed the market of the cloths industry before the launch of this particular
business organization. His early venture in the year 1972 “Confecciones Goa” which aimed
to provide quality bathrobes to the customers can be seen as the experimental phase when he
tried to explore the cloths industry (Zarahome.com, 2018). The failure of this particular
venture was a pivotal point in his career as it was due to this particular venture that he was
able to learn many valuable things about the business market of the cloths industry (Parker,
2018). Furthermore, Ortega was quick to learn from the failures of the various business
organizations operational in the same field of business. However, the major breakthrough for
Ortega came with the association of his nascent company with the already established giant
of the cloths industry “Inditex group (Industrias de Diseño Textil Sociedad Anónima)” which
specialized in the various world renowned brands like “brands Zara, Massimo Dutti, Oysho,
Zara Home, Kiddy's Class, Tempe, Stradivarius, Pull and Bear, Bershka” (Zarahome.com,
2018). Furthermore, Ortega found out that the major reason of dissatisfaction of the
customers with the cloths industry was its lack of speed (Parker, 2018). It was seen that the
various branded cloths which appeared in the diverse fashions took more than six months to
reach the various stores. Therefore, Ortega entered into collaborations with the major fashion
brands of the world in a bid to deliver fast services to the customers (Parker, 2018). It is a
reflection of this that presently the cloths which appear in the various fashions weeks takes
only 48 hours to reach the diverse stores of the organizations (Zarahome.com, 2018).
Moreover, Ortega after an analysis of the various organizations of the nation of Spain found
out that the major problem which the major business organizations of the nation faced was
that they depended on the manufacturers who either belonged to the nation of China or to the
nation of Russia (Parker, 2018). Therefore, the time required to get the products was a very

6CREATIVITY AND ENTREPRENEURSHIP
significant one and thus they were unable to “cater to the various needs as well as the
requirements of the customers in the most effective manner” (Parker, 2018). Thus, in a bid to
overcome this particular problem he relied on the local suppliers and this particular feature
enabled him to significantly reduce the time of transportation of the products from the place
of its manufacture to its various stores (Hansen, 2012). It is significant to note that this
particular strategy not only helped him to significantly reduce the time of transportation but
also helped him to deliver quality products to the customers. Another significant detail which
Ortega found out after an analysis of the various companies related to this particular industry
was their lack of dependence on the concept of innovation (Hansen, 2012). Therefore, with
the particular objective to “bring about the overall growth as well as the development of his
business organization he took the help of the concepts of innovation and creativity to outrival
the major competitors of his business in the nation of Spain” (Hansen, 2012).
The first Zara store was opened in the year 1974 by Ortega and his wife as a one man
shop (Zarahome.com, 2018). However, it is significant to note that with the “eventual growth
as well as the development of the concerned business organization” the structure and the
staffing of the organization underwent a rapid transformation (Briscoe, Tarique & Schuler,
2012). It is interesting to note that the first store of the organization was named “Zorba after
the classic film Zorba the Greek, but after learning there was a bar with the same name two
blocks away, they rearranged the letters molded for the sign to Zara” (Zarahome.com, 2018).
Furthermore, the first store of the organization “featured low-priced lookalike products of
popular, higher-end clothing fashions” (Zarahome.com, 2018). The success of this particular
store made Ortega realize the importance of the concept of expansion and he opened his
various stores subsequently in almost all the parts of the nation (Briscoe, Tarique & Schuler,
2012). The decade of the 1980s was a very crucial one for the concerned organization and it
was during this particular time that “Ortega changed the design, manufacturing, and

7CREATIVITY AND ENTREPRENEURSHIP
distribution process to reduce lead times and react to new trends in a quicker way, which he
called instant fashions. The improvements included the use of information technologies and
using groups of designers instead of individuals” (Zarahome.com, 2018). The use of the
“recent technologies as well as innovations” further paved the way for the growth of the
organization under consideration here. Ortega was quick to realize the importance of the
concept of expansion and in the year 1988 Portugal became the first country of the world in
which the business organization expanded (Zarahome.com, 2018). It is significant to note that
post its success in the nation of Portugal, Ortega opened new stores in the nations of “the
United States, and France in 1990. During the 1990s, Zara expanded to Mexico (1992),
Greece, Belgium and Sweden (1993). In the early 2000s, Zara opened its first stores in Japan
and Singapore (2002), Russia and Malaysia (2003), China, Morocco, Estonia, Hungary and
Romania (2004), the Philippines, Costa Rica and Indonesia (2005) South Korea (2008), India
(2010) and South Africa and Australia (2011)” (Zarahome.com, 2018). The expansion policy
of the business organization was solely the brain child of Ortega and he is often considered to
be solely responsible for transforming a local cloths store of the nation of Spain into the
global giant which the business organization Zara is at the present moment.
The business organization Zara takes the help of various kinds of staffing methods
for the stores not only in the nation of Spain but also in the other nations of the world. The
major kinds of staffing methods are available to the concerned company are “ethnocentric,
polycentric and geocentric” (Briscoe, Tarique & Schuler, 2012). It is generally seen that the
business organization takes the help of the staffing method as per the needs and the
requirements of the business in that particular nation (Briscoe, Tarique & Schuler, 2012). It is
significant to note that in the most of the nations of the world the business organization takes
the help of the method of polycentric kind of staffing which the various kinds of important
positions are provided to the employees as per their qualifications and also their capabilities.

8CREATIVITY AND ENTREPRENEURSHIP
In the opinion of Ortega, this kind of staffing method is the best one not only in terms of the
services which they render to the concerned business organization but also in terms of the
values which they render to the employees who are related to the particular business
organization (Forbes Welcome, 2018). This particular method of staffing significantly
reduces the dissatisfaction level of the employees and helps in the creation of a team culture
at the workplace.
The business organization of Ortega has drastically transformed the way the various
cloths are being perceived in the world presently. It is significant to note that in the earlier
part of the 20th century the various cloths were perceived just as garments which were used to
cover up the body (Cuadros, 2012). However, the innovations as well as the creativity used
by Ortega not only for the designing as well as the manufacturing of the various kinds of
cloths have drastically changed the perception of the people about the various kinds of cloths
which they wear (Cuadros, 2012). This becomes evident the association of his business
organization with the other leading fashions designers as well as manufacturers of the world.
Furthermore, the concepts of speedy delivery of the cloths to the customers, is another factor
which has not only been appreciated by the various customers of the business organization
but has also formed one of the major reasons for the recent success attained by the business
organization (Cuadros, 2012). However, in the opinion of the majority of the people the
primary reason for the rapid success attained by the business organization was the effective
leadership of Ortega.
To conclude, entrepreneurs play a significant role in the business process of the
various business organizations. It is important to note that almost every year thousands of
business organizations come into existence however they fail to sustain themselves in the
competitive business world because of the lack of effective leadership and other factors.
Therefore, it is seen that in the present times the various business organizations often take the

9CREATIVITY AND ENTREPRENEURSHIP
help of the diverse entrepreneurs to “bring about the overall growth as well as the
development of their overall business process”. This becomes significant when the recent
success attained by the Spanish company Zara and the role which its entrepreneur Ortega
play in the process is taken into consideration. It is significant to note that the effective
leadership of Ortega was on e of the primary reasons for the success attained by the business
organization.

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