This report discusses the value chain management of Inditex, one of the leading fashion retailers. It covers the primary and secondary activities, target customers, key suppliers, partners, and competitors. The report also analyzes and evaluates the logistics and supply chain of Inditex.
Contribute Materials
Your contribution can guide someone’s learning journey. Share your
documents today.
Running Head: INDITEX0 Value Chain Management INDITEX (Student’s Details) 9/5/2019
Secure Best Marks with AI Grader
Need help grading? Try our AI Grader for instant feedback on your assignments.
INDITEX1 Contents Executive Summary.........................................................................................................................2 Introduction......................................................................................................................................3 Value Chain of Inditex.....................................................................................................................3 Primary Activities........................................................................................................................3 Inbound Logistics.....................................................................................................................3 Operations................................................................................................................................3 Outbound logistics....................................................................................................................4 Marketing and sales..................................................................................................................4 Services....................................................................................................................................4 Secondary Activities....................................................................................................................4 Firm Infrastructure...................................................................................................................4 Human Resource Management................................................................................................5 Technology development.........................................................................................................5 Procurement..............................................................................................................................5 Target Customers.............................................................................................................................5 Key suppliers...................................................................................................................................5 Partners............................................................................................................................................6 Competitors......................................................................................................................................6 Logistics and Supply Chain Analysis..............................................................................................6 Conclusion.......................................................................................................................................7 Recommendations............................................................................................................................7 References List................................................................................................................................8
INDITEX2 Executive Summary Value chain is the process which includes every stage between the manufacturing of product and reaches the product to the end user. The following report described about the value chain management, supply chain, logistics, target customers, key suppliers, partners and competitors of the Inditex. The report also evaluated the performance of the logistics and supply chain of Inditex. Value chain management has nine stages which are distributed in two parts. First part is primary activities which involve the inbound logistics, operations, outbound logistics, sales and marketing and services. Second part is secondary or support activities which involve human resource management, firm infrastructure, technology development and procurement. The report comprised of all this information.
INDITEX3 Introduction Value chain management refers to a process of produce the good and it is comprises of all the information about the activities of company such as financial flow, human resource department, logistics, supply chain and stores. The following report will describe about the value chain management of Inditex. Inditex is one of the globe’s leading fashion retailers and it has eight fashion brands. Its most popular brand is Zara and everyone is aware about the popularity of Zara. The other brands of Inditex are Massimo Dutti, Pull&Bear, Bershka, Oysho, Stradivarius, Uterque and Zara Home(Inditex, 2019a).Inditex has more than 7000 stores throughout 96 markets and also selling products through online platforms in 202 markets (Inditex, 2019b). It has very effective value chain. The following report will highlight the stages of value chain management, target customers, partners, key suppliers, and competitors. With all these things, report will also analyze and evaluate the functions of logistics and supply chain. Value Chain of Inditex Value chain is a combination of primary and secondary activities of the company. Primary activities include actions which are directly connected to creation and distribution of products whereas secondary activities are actions which provide support to primary activities (Inditex, 2019c). Primary Activities Primary activities comprise of inbound logistics, operations, outbound logistics, marketing and sales and services. Inbound Logistics Inbound Logistics is a term which refers to the arrival process of raw material. In the context of Inditex, it takes raw materials from different suppliers across 43 countries and its preference of fabric is cotton. Its 50% of the products are manufactured in Spain and 25% of products come from the Europe. Its 10 logistics centres are located in Spain.
Paraphrase This Document
Need a fresh take? Get an instant paraphrase of this document with our AI Paraphraser
INDITEX4 Operations Operation is the process of production of products and services. Inditex produces its products in own factories. In this stage, Inditex starts the process to make the products and launch products in the market. Operations include the activities such as packing, machining, testing and assembling. Outbound logistics Outbound logistics is the way to reach the products to end users or customers. Inditex follows a process after products sent to the centers. Health and safety technicians carefully check the products and send to the stores. Inditex has more than 7000 stores to reach the products to the customers. Inditex refresh the collection in physical and online stores twice a week to deliver the new and stylish products. Marketing and sales Marketing and sales is the next activity in value chain. At this stage, Inditex attract and convince the potential customers to purchase the products. Inditex has a strong hold in the market with the help of Zara because Zara gets more than half of the sales for the Inditex. Its stores are mostly located in the major cities and its advertising expenses are very low. Services Last stage of the primary activities is services. It focuses on the way in which company provides the assistance to the customers. Attend every customer and provide products as per the choice of customer are the very good service of Inditex. Secondary Activities These activities are known as support activities because these are not directly involved in the making and evaluation of product. But these activities support the secondary activities. These activities include the infrastructure of firm, human resource management, technology and procurement. Firm Infrastructure First stage of secondary activities is firm infrastructure and it refers to the way in which firm is organized. Decentralized and quick decision making is essential business model of
INDITEX5 Inditex because it leads to the short time to introduce more stylish outfits. IT technology is also an important part of the Inditex organizational structure. Human Resource Management Human resource department of the Inditex id well developed in every country. All brands of Inditex have different HR directors which support and handle every issues in particular brand. Inditex follows the pyramid hierarchy to develop the products. The most interesting thing of HR department of Inditex is that the store managers work in their autonomy. The owners of Inditex develop this idea to motivate the managers and give an opportunity to manage the stores with freedom and feel like owners of their own store. Technology development Inditex uses the technology very effectively. Every step of supply chain is connected by the continue flow of information and it also developed the method to transfer all the information through technology. Inditex invested a higher amount in expansion of business through internet. Inditex takes help from the technology to design the new market trends(Dehmer & Niemann, 2018). Procurement Inditex takes fabrics and other materials from the external suppliers and design the products by own. It has many internal manufacturing factories and it purchase raw materials by the regional offices of company which are located in UK, Holland and China(Presutti & Mawhinney, 2013). Target Customers The target customers of Inditex is people who are very trend conscious and fashion forward as well as residing in urban areas. Inditex has different product lines for women, men and kids. Customers of Inditex are very sensitive about the fashion, latest clothing and accessories designs.
INDITEX6 Key suppliers The priority of Inditex is creating values for the customers as well as suppliers. All the key suppliers of Inditex follow the code of conduct of company. Its key suppliers are well trained by the professionals. Inditex collaborated with 7500 suppliers in Spain and their revenue is reaching 4.6 billion Euros(Inditex, 2019d). Partners There are many organizations which are working very effectively with the Inditex environmentally and socially. Key partners of Inditex are ACT (Action, Collaboration, and Transformation), Better cotton initiative, Better work, Canopy, Caritas, CEO water mandate, Cotton Campaign and many more(Inditex, 2019e). Competitors Inditex’s top competitors are UNIQLO, PVH, Forever 21, Gap and American Eagle Outfitters. These all competitors are giving the competition in clothing and fashion industry (Craft, 2019). Logistics and Supply Chain Analysis The supply chain and logistics is the biggest strength of Inditex because its concept of company’s supply management is connected with the time to allow sourcing of products at the global level. The process of Inditex’s supply chain is depending on the cross functional teams which cooperate with the design department of company and this is located in La Coruna. The marketing specialists of the Inditex decide the prices, costs and margins of the products which are an important part of supply chain(Christopher, 2011). As discussed above, Inditex refresh its stores twice a week which make brands very trendy and fashion follower. Company is very particular about the time to refresh the stores. To meet the deadlines and volume of production, the policy of global sourcing provide a range of fabrics which are supplied from various nations. Mostly, 40% of the products are produced in Spain(Farooque, Zhang, Thürer, Qu, & Huisingh, 2019). Additionally, the finished garments or products are labeled and price tagged in La Coruna which is a distribution center of company.
Secure Best Marks with AI Grader
Need help grading? Try our AI Grader for instant feedback on your assignments.
INDITEX7 To control the cost the sales and marketing, Inditex chooses the well-developed locations to attract the customers and spending less on the advertising and promotions. The headquarters of Inditex is located in Spain and the 80% of the products manufacture in the Europe. The inventory management uses technology very effectively to communicate and transfer the information( Li, 2011). The manager of company is allowed to work flexibly and successfully with the help of technology. They can check all the deadlines of production and fashion trends to develop the business. The inventory model of Inditex is depending on the three main points: Store inventory Warehouse inventory Demand forecast In the context of transportation, Inditex is very liable to use advanced technologies. Not only finished products, but fabrics and other materials are also distributed very quickly because the headquarters are center point in all the supplying centers. The supply chain and logistics process is very strong but it can face various challenges regarding the system of transportation, excess prominence on technologies, shipment of materials and many more. The transportation system can face problems because of the weather, natural disaster, labor strife, political disturbances and terrorism(Sauer & Seuring, 2017). Conclusion From the above discussion, it can be concluded that the value chain of Inditex is very strong and effective but it has vertical integration system which can leads to the unusual threats to the global expansion of company. The overall business of Inditex is depending on the processes of manufacturing the products but not depend on the functions. Every employee is involved in the business. Hence, human resource is very important aspect of the business of Inditex. It can also be concluded from the above report that supply chain and logistics is the biggest strength of Inditex because its concept of company’s supply management is connected with the time to allow sourcing of products at the global level.
INDITEX8 Recommendations To protect the company from these threats, it should develop and establish other creative departments which can control the certain regions. The competitors of Inditex are also well established. But Inditex can compete with all these competitors by developing its business and store.
INDITEX9 References List Li, P. (2011).Supply Chain Management.Germany: BoD – Books on Demand. Christopher, M. (2011).Logistics & Supply Chain Management(4 ed.). New Jersey: Financial Times Prentice Hall. Craft. (2019, September 7).Inditex Competitors.Retrieved September 7, 2019, from https://craft.co/inditex/competitors Dehmer, J., & Niemann, J. (2018). Value Chain Management Through Cloud-based Platforms. Procedia - Social and Behavioral Sciences, 238, 177-181. Farooque, M., Zhang, A., Thürer, M., Qu, T., & Huisingh, D. (2019). Circular supply chain management: A definition and structured literature review.Journal of Cleaner Production, 228, 882-900. Inditex. (2019a, September 7).Our Brands.Retrieved September 7, 2019, from https://www.inditex.com/en/about-us/our-brands/zara Inditex. (2019b, September 7).Who we are.Retrieved September 7, 2019, from https://www.inditex.com/en/about-us/who-we-are Inditex. (2019c, September 7).Our Model.Retrieved September 7, 2019, from https://www.inditex.com/en/how-we-do-business/our-model Inditex. (2019d, September 7).Our Suppliers.Retrieved September 7, 2019, from https://www.inditex.com/en/our-commitment-to-people/our-suppliers Inditex. (2019e, September 7).Partenrships.Retrieved September 7, 2019, from https://www.inditex.com/how-we-do-business/right-to-wear/partnerships Presutti, W. D., & Mawhinney, J. (2013).Understanding the dynamics of the value chain.New York: Business Expert Press. Sauer, P. C., & Seuring, S. (2017). Sustainable supply chain management for minerals.Journal of Cleaner Production, 151, 235-249.
Paraphrase This Document
Need a fresh take? Get an instant paraphrase of this document with our AI Paraphraser