Analyse how strategy needs to be integrated with products/ services and customers.

You can analyse the vertical and horizontal integration with strategy to achieve organisational goals.
Think about the outcomes of strategic planning tools such as SWOT and PESTLEE. You can discuss
how strategy is formulated and how it links with products/ services and customers. Analyse: to break
something into its component parts and show how they relate to one another. In this case, think about
the link between organisational strategy and its products, services and customers with strategy. How
organisational strategies are shaped by the business and external contexts; organisational insights and
organisational performance; models of strategy formulation and implementation; concept of vertical
and horizontal integration of strategy and how it connects with products, services, customers.
Types of strategy:
1.Classical strategy
2.4 E Model: explore, enable, evangelise and exploit: Inditex
Inditex’s global success as a fashion retailer is based on first producing its clothes in small batches,
then scaling up production rapidly if they sell well.
3. blue-ocean approach: generate a compelling new idea—a whole new market, with you at its centre.
Apple
4. the shaping approach: working with partners to create new markets. Apple and Google
5. for companies on the brink—is renewal: refocus the business decisively, preserve capital, free
resources to apply to areas of growth.
6. “ambidextrous”, that is, being able to skip nimbly from one strategy to another, or to pursue
several of them simultaneously. Some companies, such as PepsiCo, have two separate groups of
people in each division: one whose strategy is to maximise the efficiency of the business in its current
form, and another that looks for ways to disrupt it (before someone else does).
REFERENCES:
https://www.inditex.com/itxcomweb/en/home
https://www.inditex.com/itxcomweb/en/press/news-detail?contentId=10da31b6-0c12-43e4-9e33-
103766d27821
https://www.economist.com/business/2021/01/16/how-inditex-is-refashioning-its-business-model
https://www.forbes.com/sites/kevinrozario/2023/06/07/inditex-stock-spikes-by-7-as-zaras-fast-
fashion-strategy-flies/?sh=547357066c88
https://hbr.org/2022/10/how-to-gain-a-competitive-advantage-on-customer-insights
https://www.forbes.com/sites/kristenclassi-zummo/2024/03/05/why-every-brand-should-be-
worried-about-shein/?sh=66438b5b4723
https://www.forbes.com/sites/walterloeb/2023/12/11/shein-global-fashion-manufacturer-will-go-
public-in-2024/?sh=6eb67c3d3220
https://hbr.org/2004/11/rapid-fire-fulfillment
https://www.forbes.com/sites/forbestechcouncil/2022/12/29/exploring-vertical-integration-in-the-
supply-chain/?sh=578e4d3f3c5b
https://www.businessinsider.com/zara-inditex-brand-list-2018-10#bershka-1
 1.

Zara is one of the biggest international fashion companies, and it belongs to

Inditex, one of the world’s largest distribution groups.The customer is at the
heart of our unique business model, which includes design, production,
distribution, and sales, through our extensive retail network.

Inditex’s global presence not only includes its physical stores but also extends to its online presence.
The company has invested in digital transformation, seamlessly integrating its physical and online
stores to provide customers with a seamless shopping experience. By embracing e-commerce and
incorporating digital technology, Inditex stays at the forefront of the ever-evolving retail
landscape.Inditex’s commitment to understanding its customers, embracing innovation, and adapting
to market trends has played a crucial role in its continued success. In the following sections, we will
delve deeper into Inditex’s business strategy and explore the key factors that contribute to its
achievements. Inditex, a global leader in the fashion industry, has established a successful business
strategy that sets it apart from its competitors. This strategy encompasses several key elements,
including the fast-fashion approach, vertical integration and supply chain management, and a strong
emphasis on sustainability. Inditex’s business strategy revolves around the concept of fast-fashion,
which involves quickly responding to fashion trends, shortening production cycles, and frequently
updating product offerings. This approach allows Inditex to adapt to changing customer demands and
reduce the risk of excess inventor. Inditex’s success is also attributed to its strong focus on vertical
integration and supply chain management. The company maintains a vertically integrated production
system, which means it controls every stage of production from design to distribution. This
integration allows for greater control over quality, costs, and speed.
Inditex story:
Zara, founded by Amancio Ortega in 1975, is the largest company in the Inditex Group. Ortega's
experience in clothing as a delivery boy helped him understand the two major gaps in the clothing
industry: no direct linkage between consumer and producer; and a thin profit margin. These led
to Zara's inception.
How Ortega Bridge the Gap?
Ortega outlined Zara's strategy on vertically integrating value chain from design to retail stores. This
offered Zara in fast-cycle new-product development and tight integration between its retail stores,
designers, and manufacturers. Direct access to consumer feedback: Zara feeds market information
from its directly owned and managed retail stores to its designers and in-house production and
distribution.
Speed and flexibility: Zara replenishes its stock twice a week across its stores. As Zara has a
shortened product life cycle that differentiates Zara, un-sold designs are withdrawn from shops,
further orders are cancelled, and a new design is pursued, Zara attained this high consumer
responsiveness through vertical integration.
Supply Chain & Logistics Strategy :Zara has developed a highly responsive supply chain that helps it
offer 11000+ unique designs (i.e., > 5x more than its competitors) to its 6000+ global retail stores and
replenishment within two days. The heart of Zara’s supply chain is "The Cube", a highly automated
distribution center (DC). The 11 owned factories, which are within a 16-kilometre radius of the cube,
are connected to the cube by underground tunnels with high-speed monorails.
Finished Garments ---> The Cube (Spain) ---> Logistic Hub (Zaragoza) ---> Stores
The Cube: Zara's automated distribution center in Spain, known a The Cube, controls the entire
production process. The just-in-time model, inspired by Toyota Motor Corporation, minimizes costs
and eliminates excess inventory.
2. Speed and Agility: Stores receive orders within 2 days of placing them, and items are shipped and
arrive at stores already on hangers with tags and prices on them, so they go directly onto the sales
floor.
relied on building strong processes, skilled people, and technology.
3. Information Technology: highly accurate demand forecast, use of PDAs (personal digital assistants)
to capture real-time consumer data not only on transactions but on preferences, and "H" connection,
i.e., information from each store is parallel and connected to the HQ in Spain.
4. Location: Despite the higher cost, Zara located its facilities in Spain and Portugal to respond
quickly to changing fashion trends. While in Asia, it has products with a longer shelf life.All suppliers
are within 16km of "The Cube".
The ‘oil stain’ strategy is pursued by Zara’s international expansion, developing and gaining
experience to operate locally and then proceeding to other areas.
5.Economics of scale: Zara buys large quantities of only a few types of fabric (4~5). This way, it gets
quick delivery from the suppliers and reduces the tiers of lead time.
Marketing Strategy
Since the days of Ortega, Zara’s marketing strategy starts with choosing the location of the stores and
ends with advertising that the sales period has started. Also, its marketing expenses are significantly
lower than the industry average. <0.5% of its budget is spent on promotion and advertising. Zara
Target Audience: fashion-conscious individuals who appreciate high-quality clothing, with a strong
focus on the women 18–35 age group. Zara locates its stores in urban cities. Limited Edition: creating
limited quantities of certain products, which creates a sense of exclusivity and scarcity among
customers. This strategy has been successful in creating buzz and generating demand for Zara’s
products. Also, it helps Zara sell its >80% products at their full price.
The in-store experience : involves creating a unique and memorable shopping experience for
customers. Area exceeding 930 sq. ft. So, this enhances consumer convenience.
Social Media: The company posts artistic photos of clothing, creating a unique aesthetic that captures
the attention of its target audience.
Going further, Zara is working to promote itself as an eco-friendly brand, with a focus on reducing its
carbon footprint to zero by 2040.
"Zara's success stems from strategy, customer focus, and a skilled team."
**********************************************************************************
*88
Business strategy: vertically integrated supply chain, a quick response manufacturing system, and a
decentralized decision-making process.
Business model: refashioning: after Covid 19
Instead, Zara is chasing its young clientele to where they spend the most time: on their phones,
shuffling between Instagram and TikTok. The shift to online sales, which has been turbocharged by
lockdowns, will require some agile refitting of the way fashion brands do business. Inditex’s signal
that it is reducing its store numbers is a wake-up call in the industry. Inditex has managed to keep
operating margins at a plump 17%. New technology, such as rfid chips, tracks where items are,
allowing Inditex to fulfil an order from either a shop or a warehouse. It is testing an app to tell
shoppers if a particular item in a particular size is available in a given outlet—and even on which of
the outlet’s racks to find it.
But it can also be applied in older industries. Inditex’s global success as a fashion retailer is based on
first producing its clothes in small batches, then scaling up production rapidly if they sell
well.Another is the visionary, blue-ocean approach: generate a compelling new idea—a whole new
market, with you at its centre.
Zara was on top form in the fast fashion market in the quarter ending April, enabling Spanish owner
Inditex to lift global net revenue by 15% to €7.6 billion ($8.1 billion) on a like-for-like basis, with
operating income surging by 43% to €1.5 billion ($1.6 billion).
Zara’s fast fashion business model exploits consumer and cultural changes, with dramatically
improved financial results. The key is the familiar Agile technique of “postponement:” transforming a
product into its final form at the latest possible moment.“Fast fashion is a business model tailor-made
for the multi-channel ‘I want it now’ Internet-driven buyer of today. It offers significant business
value to a range of retail companies whose product cycles are accelerating and influenced by
celebrities, luxury brands, and media hype. The long and guarded industry process of translating
fashion design into street wear—or from elite runway shows to department store floors—is now
completely transparent to sophisticated ‘fashionistas,’ young people whose purchase influence is 24/7
mobile access to stores, stars and sources that truly reflect demand- driven impulses.”
Zara has built the perfect mix of customer feedback, data, and a world-class supply chain to secure its
market-leading global position in high street fashion, so how can others keep up?
This approach enables Inditex brands to quickly set new trends and create what the customer actually
wants and not just what their designers, buyers and merchandisers think they want.
The future for all brands and retailers is to adopt this same principle of co-creation with their
consumers but this either involves rebuilding their entire culture and approach or finding ways to
introduce the customer into their decision-making process at a much earlier point.
Weakness: “Despite the stellar performance, it’s worth noting Inditex’s fashion has a relatively high
price point compared to other high street chains. If inflation remains sticky at current high levels,
Inditex could see consumer demand for the latest fashion take a back seat as the cost-of-living
pressures mount.”
Strength: Zara has also pushed forward with its sustainability efforts. On the retail side, a big advance
has been with the Zara Pre-Owned resale platform which first launched in the U.K. in November
2022. Plans are now in place to expand the service into France, Germany and Spain by the end of
2023. “This will allow Zara to capitalise even more on the outperformance of the secondhand apparel
market and improve its perceptions among the ever-growing number of eco-conscious consumers,”
said Stephens.
Customer insights: Consider fast fashion company Inditex, owner of the Zara brand. Its retail
employees are trained to serve as its frontline eyes and ears, tracking data, observing customers, and
gathering informal impressions — all while helping customers find the styles that suit them best. The
stores compile information about the choices customers make, their inquiries about missing items, and
their suggestions. Are shoppers looking for skirts or trousers? Bold or subtle colors? These
impressions are sent directly to a group of designers and operational experts at headquarters, together
with detailed daily data on exactly what is selling and where. The combination with deep insights
from what people are searching for and buying online puts them at a clear advantage over online-only
fashion companies. All these insights are rolled up, aggregated, scaled, and analyzed almost in real
time and turned into designs for new garments or into improved production, logistics, and marketing
practices.The key is in the flexibility to adapt to customer preferences and the precision to create and
produce what customers are asking for, at the moment they are asking for it. At the end of the year,
Inditex’s more than 700 designers will have come up with 60,000 different creations, and the stores
worldwide will have received new waves of collections twice per week.
Competitors analysis: Shein and Temu
1. SHEIN’s apparel sales experienced double-digit growth in 2023, versus 2022, according to
Circana’s consumer tracking data. The retailer’s ability to deliver on the immediate trends at
rock bottom prices has been winning over Gen Z and social media. For example, a trendy
satin midi skirt that, on average, costs $39-$49 can be purchased on SHEIN.com in a similar
style for under $10.
2. This activity is not going unnoticed by fast fashion giant Inditex, which owns Zara amongst
other brands. Zara, which focuses its business on a high-fashion aesthetic at an affordable
price, recently expanded their lower-priced Gen Z focused brand, Lefties, to offset SHEIN.
3. Courting new customer: While SHEIN’s meteoric rise was initially due to Gen Z attention,
the retailer’s low prices are becoming appealing to additional demographics. In 2023, while
Gen Z made up the majority of dollar sales for SHEIN, Millennials and Gen X were actually
the fastest-growing buyers on SHEIN’s website, according to Circana. The retailer’s
proliferation on social media and Gen Z ‘s ability to influence up (remember how fast we
stopped wearing skinny jeans?) has resulted in SHEIN’s growing adoption by consumers over
30-years-old.
4. It’s perfect timing, as SHEIN recently rolled out their marketplace expansion earlier last year.
While some brands have entered into partnerships with the retail giant, there are growing
complaints of unauthorized sellers on SHEIN; however, this is usually unbeknownst to the
buyer.
Vertical integration:
Zara subverts this logic. It produces roughly half of its products in its own factories. It buys 40% of its
fabric from another Inditex firm, Comditel (accounting for almost 90% of Comditel’s total sales), and
it purchases its dyestuff from yet another Inditex company. So much vertical integration is clearly out
of fashion in the industry; rivals like Gap and H&M, for example, own no production facilities. But
Zara’s managers reason that investment in capital assets can actually increase the organization’s
overall flexibility. Owning production assets gives Zara a level of control over schedules and
capacities that, its senior managers argue, would be impossible to achieve if the company were
entirely dependent on outside suppliers, especially ones located on the other side of the world.Zara
can ramp up or down production of specific garments quickly and conveniently because it normally
operates many of its factories for only a single shift. These highly automated factories can operate
extra hours if need be to meet seasonal or unforeseen demands. Specialized by garment type, Zara’s
factories use sophisticated just-in-time systems, developed in cooperation with Toyota, that allow the
company to customize its processes and exploit innovations. For example, like Benetton, Zara uses
“postponement” to gain more speed and flexibility, purchasing more than 50% of its fabrics undyed so
that it can react faster to midseason color changes.
Horizontal integration involves acquiring a competitor or a similar business to expand the customer
base and grow its market share. This benefits the company, as they would buy market share and add
more customers to increase their profit at a higher economy of scale. The benefit of horizontal
integration is that you increase market share and have a high chance of diversifying the company’s
product or service portfolio, reducing competitors in the marketplace.

Horizontal integration enables companies to scale quickly, which is vital in today's fast-paced market.
Another key benefit is the acquisition of top talent from competing or like-minded businesses, which
often leads to increased synergy, creative problem-solving and better product development.
Comparatively, vertical integration is when a company increases its profits by obtaining better control
of its operation through purchasing manufacturers within the supply chain. There are different kinds
of vertical integration, such as backward integration, where a firm owns its upstream suppliers, and
forward integration, where a firm owns downstream buyers. Companies do this to secure supplies,
distribution points or other parts of the transaction necessary to produce or market products or
services at a lower and more competitive price.
Horizontal integration: google
Later that year, the company also acquired a 65 per cent share in the upscale Massimo Dutti
brand. In 1995, Inditex purchased the remaining Massimo Dutti shares and began expanding the
brand to include a women's line.[22] The company bought Stradivarius in 1999, a youthful female
fashion brand.[9]

In September 2018, Inditex announced to sell all its brands online by 2020, even in places where
it does not own any stores.[54][55]
Massimo Dutti : acquired in 1995

and Stradivarius : acquired in 2005

Oysho: acquired in 2001

Marketing strategy[edit]
Inditex avoids magazine advertising, with print campaigns only occurring on billboards in certain
regions like U.S. and in-store. Endorsements for celebrities to wear its labels are budgeted
instead. The company also invests heavily in a prime commercial location with fashion-forward
window displays for optimum high street visibility and product turnaround.

Ethics:
The company makes use of Uyghur forced labour provided by the China based
supplier Beijing Guanghua textile group, according to Uyghur Rights Monitor, Sheffield
Hallam University, and the Uyghur Center for Democracy and Human Rights.[11]

https://www.reutersagency.com/en/reutersbest/article/investors-push-zara-owner-inditex-to-
publish-full-supply-chain/
us eof child labor
Strategy of company:
Inditex continues to focus on four key areas: A unique product proposition, enhancing the
customer experience, sustainability, and the talent and commitment of our people.
Strategic initiatives: To the next level:Inditex continues to see strong growth opportunities. Our key
priorities are to continually improve the product proposition, to enhance the customer experience, to
increase our focus on sustainability and to preserve the talent and commitment of our people.
Prioritising these areas will drive long-term organic growth.
Product Proposition:We will continue focusing on the creativity, quality and design of all our products
and reinforcing the commercial initiatives of all our concepts. Zara Woman The Leather Edition,
Massimo Dutti Venetian Veil, Pull&Bear the Summit, Bershka TBTailoring, Stradivarius Poplin,
Oysho Back to training and Zara Home Linens are just some of the proposals that will be available
throughout 2024.The collections show our strong commitment to creativity, with a team of 700
designers and a 630-person prototype team utilising a meticulous design process that attends to every
small detail of our garments and collections, while striving to provide quality fashion to more and
more customers around the world.
Customer experience:We will continue to offer the best shopping experience to our customers, both in
our stores and on our online platforms. Regarding our stores, Zara will launch in new locations (Zara
Palazzo Verospi Roma, Hamburg-Überseequartier, The Grove-Los Angeles and Caesars Palace-Las
Vegas). Additionally, we will make important enlargements and refurbishments in some of our most
emblematic stores (Zara Corso Vittorio Emanuele Milan and Zara Nanjing Road Shanghai).Massimo
Dutti will open a store in the US at Aventura Mall, Miami and Oysho will open its first store in
Germany (Hamburg) in 2024. In India, Bershka will open its first store in Mumbai Palladium, and
Zara Home will open in Bangalore.In terms of new markets in 2024, our concepts have opened their
first stores in Uzbekistan.Over 2024, we expect to reopen around 50 Inditex stores in
Ukraine.Regarding our online experience, we will start weekly livestreaming services in the US and
UK over 2024. The Group continues to explore new ways of communicating in order to improve the
customer experience, via channels such as Shuffle for Pull&Bear.We continue introducing the new
security technology in our stores. This new technology provides a significant improvement in
customer experience, facilitating interaction with our products and improving the purchasing
process.The new system will be fully operational in Zara in 2024. It will be progressively
implemented in all the concepts and will be the basis for us to continue deepening the digitalisation of
stores and their integration with online platforms in the coming years.
Sustainability:In terms of circularity, the Zara Pre-Owned platform is currently available in 16
European markets, and will reach new relevant markets, starting with the United States. Through this
platform, we will continue helping our customers to extend the life cycle of their Zara garments
through donation, repair or resale.Regarding innovation, our Sustainability Innovation Hub is
currently working with more than 350 start-ups. Some of these projects are now contributing to our
current collections. An example of this is LOOPAMID® x ZARA. ZARA Studio has developed a
single-material jacket made entirely with LOOPAMID®, a polyamide created entirely from textile
waste. We have also seen commercial collaborations with CIRC. Furthermore, we have recently
strengthened our commitment to Infinited Fiber with a direct investment in the capital of the
company.
People:We will continue to promote the talent and commitment of our teams in order to reinforce our
attractiveness as a benchmark employer.Hola! is our welcome training program for everyone joining a
Zara store for the first time. This is an itinerary for the first 4 weeks, combining hands-on and digital
sessions on our Tra!n platform. We highlight the figure of Zara Coach: the person in charge of
welcoming, guiding, supporting and involving the rest of the team during the process. The Hola!
programme is already available in 50 markets, where we have about 2,800 Zara Coaches so far.In
addition, throughout the 2023 financial year, more than 12,700 people have been promoted, resulting
in 72% of the Group's vacancies being filled internally. Additionally, 2.8 million hours of training
have been provided to the teams.
Numbers:Strong execution in 2023:In 2023, the execution of the business model was very strong.
Gross profit increased 11.9% to €20.8 billion. The gross margin reached 57.8% (+77 bps).Strong sales
growth:In 2023, the collections have been very well received by our customers. Sales grew +10.4% to
reach €35.9 billion, showing very satisfactory development both in stores and online. Store sales:In
2023, store sales grew 7.9% reflecting incremental footfall and increasing store productivity. Our
ongoing store optimisation and digitalisation programme continues to be key.In 2023, Inditex opened
stores in 41 markets. At the end of FY2023 Inditex operated 5,692 stores.Online sales:Online sales
also grew satisfactorily at 16% to reach €9.1 billion.Customer engagement remains very
high. Active App’s reached 152 million. Online visits in FY2023 have grown 10% to 6.5
billion visits. The Group has 251 million followers on social media.

Technology: SINT, our integrated stock management system, allows us to fulfill online orders from
both store warehouses and online stockrooms, resulting in efficiency, a smaller carbon footprint with a
low level of leftovers and shorter wait times. And with the full development and deployment of our
open and modular digital architecture, Inditex Open Platform, we can move forward with real-time
customer adaptation, offering them new fashion and brand experiences.
Ethics: The Ethics Line is the communication channel made available by the Inditex Group for the
purposes of:/ Raising questions or submitting enquiries about the Group’s Codes of Conduct and other
internal rules of conduct.

/ Reporting breaches of the Group’s Codes of Conduct and other internal rules of conduct.
The Ethics Committee is made up of the General Counsel and Secretary of the Board of Directors, the
Chief Compliance Officer, the Chief Internal Audit Officer, the Chief Sustainability Officer, the Chief
People Officer and the Ethics Line Manager. Its mission is to ensure that the entire staff is compliant
with the Code of Conduct and familiar with its contents and manage the Ethics Line, being the
preferred reporting channel, and the remaining internal reporting channels.
Sustainability:
2025 / 100% linen and polyester from preferent sources
2025 / 25% reduction of water consumption in our supply chain
2025 / Reaching three million people in our supply chain with our Workers in the Centre strategy
2030 / Protecting, restoring, regenerating or otherwise improving biodiversity across 5 million
hectares
2030 / Reducing our emissions by over 50% (including the design and manufacture of our products,
their distribution and their end-of-life management)
2030 / Using only textile raw materials that deliver a lower impact on the environment, so-called
preferred fibres
2040 / Achieving zero net emissions by reducing our carbon footprint by at least 90% by comparison
with 2018
Sustainability Innovation Hub —a platform that identifies and promotes the best in new materials,
approaches and processes in collaboration with start-ups, innovation accelerators and partners.Clothes
Collection Bin and Automated Order delivery point
Brands: Zara, Zara Home, Stradivarius,Oysho, Pull and Bear, Massimo Dutti, Bershka

People: What do we offer

Opportunities to Grow: When our employees grow, we grow. We’ve made it a priority to provide the
resources and opportunities that allow every individual to learn, advance and develop to their fullest
potential.
Continuous Learning: In addition to on-the-job training, we provide a multitude of programs to
expand your skills and satiate your curiosity, via e-learning, vocational training and language classes.
Open Communication: Inditex is a horizontal organization with a flat hierarchical structure. We are
committed to collaborative work and empower employees at every level to play a part in our success.
Innovative Technologies: From the beginning, we’ve embraced the latest technology to optimize
operational efficiency and effectiveness, which is why we’re considered best-in-class among fashion
retailers.
OUR VALUES
/ Teamwork: We grow together. As a team, we solve problems with deeper perspectives and
answer questions with open hearts and minds.
/ Curiosity: We’re moved by the constant search for different ways of doing things.
/ Diversity: Our teams are made up of different identities, cultures, origins and experiences, and
everyone is accepted for who they are.
/ Sustainability: Our aim is to work in a sustainable and transparent way, with the goal of
creating attractive, ethical and quality fashion.
/ Creativity: We are motivated to make our customers happy and we do not put limits on our
teams’ imagination.
/ Humbleness: We rely on our teams’ ability and instinct; we have come this far thanks to the
people who have told us where we could improve.
Anyone, anywhere, always yourself.

Balanced Scorecard

The balanced scorecard—developed in 1992 by HBS Professor Robert

Kaplan and David Norton—is a tool that tracks and measures non-financial
variables.

“The balanced scorecard combines the traditional financial perspective with

additional perspectives that focus on customers, internal business processes,
and learning and development,” Simons says in Strategy Execution. “These
additional perspectives help businesses measure all the activities essential to
creating value.”

The four perspectives include:

 Financial: Do your plans and processes lead to desired levels of

economic value creation?
 Customer: Does your target audience perceive your product,
services, and brand in the desired way?
 Internal business process: Do your organizational processes create
value for customers?
 Learning and growth: Does your organization support and utilize
human capital and infrastructure resources to meet goals?
To ensure you get the most out of your balanced scorecard, it’s crucial to use
a strategy map as well. A strategy map is a visual representation of the
relationships that directly impact your business strategy.

“A strategy map gives everyone in your business a road map to understand

the relationship between goals and measures and how they build on each
other to create value,” Simons says in Strategy Execution.

Inditex SWOT Analysis

Strengths
 Strong brand portfolio: Inditex owns several well-known brands such as
Zara, Pull&Bear, and Massimo Dutti. This diversified brand portfolio allows
the company to cater to different consumer segments and minimize risks.
 Fast fashion expertise: Inditex is widely recognized for its fast fashion
business model, which enables it to quickly respond to changing fashion
trends and deliver new collections to stores within a short time frame. This
agility gives the company a competitive edge over its rivals.
  Efficient supply chain management: The company's vertically integrated
supply chain allows it to have full control over the production process,
resulting in shorter lead times and reduced costs. This efficiency helps
Inditex to maintain competitive pricing while ensuring high-quality
products.
 Global presence: Inditex operates in over 96 countries, with a strong
presence in Europe, the Americas, and Asia. This extensive global footprint
not only provides the company with access to a large customer base but also
helps it withstand regional economic fluctuations.

Weaknesses
 Overreliance on Europe: While Inditex has a global presence, it is heavily
reliant on the European market, which accounts for a significant portion of
its revenue. This dependence exposes the company to risks associated with
economic downturns or political instability in the region.
 Ethical concerns: Inditex has faced criticism regarding labor conditions in
its supply chain, particularly in low-cost manufacturing countries. These
concerns can negatively impact the company's reputation and brand image,
leading to potential customer boycotts or legal consequences.
 Limited online presence: Although Inditex has made efforts to expand its
online presence, it still lags behind some of its competitors in terms of e-
commerce capabilities. This could hinder the company's ability to capture
the growing online retail market share.

Opportunities
 E-commerce growth: The rapid growth of e-commerce presents a significant
opportunity for Inditex to expand its online sales and reach a broader
customer base. By investing in its online platforms and enhancing the digital
shopping experience, the company can capitalize on the increasing trend of
online shopping.
 Emerging markets: Inditex can further tap into emerging markets, such as
China and India, where there is a growing middle class with increasing
purchasing power. By tailoring its products and marketing strategies to these
markets, the company can leverage the potential for higher sales and market
share.
  Sustainable fashion: With the increasing consumer demand for sustainable
and environmentally friendly products, Inditex has an opportunity to
strengthen its position as a leader in sustainable fashion. By adopting eco-
friendly practices and promoting transparency in its supply chain, the
company can attract environmentally conscious customers.

Threats
 Intense competition: The fashion retail industry is highly competitive, with
numerous global and local players vying for market share. Inditex faces the
risk of losing customers to competitors who offer similar products at
competitive prices or have stronger brand appeal.
 Economic downturns: Inditex's performance is susceptible to economic
downturns, as consumers tend to cut back on discretionary spending during
tough economic times. A global recession or regional economic instability
could negatively impact the company's sales and profitability.
 Changing consumer preferences: Fashion trends and consumer preferences
are constantly evolving. Inditex must stay ahead of these changes to remain
relevant and appealing to its target market. Failure to anticipate and adapt to
shifting consumer preferences could result in declining sales and loss of
market share.
 The mission statement of Inditex is to "create sustainable value for
society, customers, employees, and shareholders through innovation
and continuous improvement."

VISION OF ZARA
The vision statement of Zara is: "To become the global leader in
sustainable fashion."
MISSION OF ZARA
"To give customers what they want, and get it to them faster than anyone
else."

beauty, clarity, functionality, and sustainability