Answer the questions only based on the attached file.
1.With which of the international competitors listed in the case is it most interesting to compare Inditex’s
financial results? Why? What do comparisons indicate about Inditex’s relative operating economics? Its relative
capital efficiency?
2.How specifically do the distinctive features of Zara’s business model affect its operating advantage?
Specifically, compare Zara with an average retailer with similar posted prices. In order to express all
advantages / disadvantages on a common basis, you may find it convenient to assume that on average, retail
selling prices are about twice as high as manufacturers’ selling prices.
3.Lay out the linkages among Zara’s choices about how to compete, particularly ones connected to its quick response capability, and the ways in which they create competitive advantage. What does the exercise suggest
about such capabilities as bases for competitive advantage?
4.Why might Zara “fail”? How sustainable would you calibrate its competitive advantage as being relative to the
kinds of advantages typically pursued by other apparel retailers?
5.How well does Zara’s advantage travel globally?
6.What do you think of Zara’s past international strategy? Evaluate, in particular, its past strategy for (product)
market selection, its mode of entry, and its standardization of its marketing approach.
7.What is the best way to grow the Zara chain? How, specifically, do you see prospects in the Italian market?
And more broadly, what do you think about the strategy of focusing on Europe versus making a major
commitment to a second region?
8.What other strategic recommendations would you make to Inditex CEO Jose Maria Castellano?
Sample Solution
