Zara's International Business Expansion Strategy: A Case Study

International
Business

International Business 1
Question-Answer
0.
Inditex’s is a Spanish multinational clothing company in Galicia. It designs the clothes in
a unique way due to which it became the biggest fashion group in the world. The company
traded apparel, footwear, and accessions of children, women, and men through Zara as the Zara
is the flagship store of Inditex’s. It has been seen that there are six retailing chains that were
established as the distinct business units within the structure. There are various separate chains
that are responsible for strategy, sourcing, product design, manufacturing, distribution, and
financial results. Inditex was established in Spain with the 20 manufacturing and distribution
stores in the region.
In the case study, there are four competitors of Inditex’s has been discussed in terms of
revenue and expansion of the business. The major competitor of Inditex’s is Gap that has the
largest market capitalization among all competitors. The company has a large amount of revenue
and number of stores in the worldwide. By comparing the financial result of both the
organization such as Gap and Inditex, it has been found that the Gap attain the growth and
profitability since the last year. It was one of the biggest apparel retailers in the world. It retained
the name as the most of their stores but outsourced all production. Gap and Zara follow a similar
business model to operate the business with time and technology. It has been evaluated that Zara
gains a competitive advantage by adopting the market changes in creating fashion and satisfying
customers. Zara did not face two barriers such as cost and logistics. Zara does not require to
invest the high cost while entering the new market. Logistics include the curve, volume, SKUs
and delivery points all are similar in every store that helps the organization to gain a competitive

International Business 2
advantage. Thus, Gap is the top competitors of Inditex’s but Inditex’s has high revenue as
compare to the others. Gap has high operating expenses as compared to the Inditex’s due to
which the revenue of Gap is reduces©.