PESTLE analysis of Inditex Essay

company has been in existence for a little over 15 years and has made huge strides in the textile,

(4) Cultural and social environment, consumers’ behaviour and life style that have effect on business.

Established in 1975 in A Coruña (North – Eastern Spain) by Amancio Ortega, Inditex has grown rapidly to become one of the largest fashion retailers in the whole world competing with the American Gap and the Swedish Hennes & Maurizt (H&M). “In addition to Zara, the largest of its retail chains, Inditex has another seven commercial formats: Bershka, Stradivarius, Massimo Dutti, Oysho, Pull and Bear, Skhuaban and Zara Home (all of the targeting different age and disposable income segments). The group also includes more than a hundred companies associated with different textile, manufacturer, infrastructure and distribution businesses” (Inditex 2006 p.2). Inditex is listed since 23 May 2001

Next, the essay will concern about five performance objectives that help Zara achieve competitive advantage in business. About quality, beauty, affordable prices and fashion are factors leading to magic success of Zara as well as other brands of Inditex, but it is not easy to do that. Amancio Ortega is president of the corporation with 32,000 employees, but he still has habit of operating as a family company with a clever and simple style. Zara operates with closed model from research, design, production, distribution and retail. Diversity, abundance and frequent changes of clothing design have become the biggest competitive advantage of Zara. The competitors expect to have the attraction like Zara. Most customers feel loss or lack

Zara is a brand widely known across the globe for its unique fashionable cloths .It is a part of inditex which is known as one of the world’s largest distribution group in the world and the owner of the company is Spanish businessman named Amancio Ortega .This company was formed in 1963 as a fashion retailer for women clothes but the company became a success after the addition of a new brand named Zara in 1975 .Today Zara is amongst one of the largest international company producing the fashionable clothes. After the success of the inditex as a successful brand (ZARA) maker, inditex was able to expanded itself with more successful brands across the world in different countries at the end of the 1980.from 1976 to 1983 Zara turned out to be a successful retailing brand and introduced itself with nine new outlets to the biggest cities of the Spain with its first headquarter in Goa. Year 1984 turned out to be the witnesses of first logistics headquarter of Zara covering a large area of 10,000 square metres. New York

This brings us to diversity and communication throughout the world. The social-culture element includes the norms, values, beliefs and behaviors associated with the demographic characteristics of a given area or region. Multinational companies in particular are faced with the challenge of diverse social cultural differences in the countries in which they operate. Social-cultural considerations are subject to change, so domestic firms must be aware of this aspect of the external environment as well as multinational firms. We live in a diverse world where more than ever communication with the world is key to our business and societies success. One should become more familiar with the world that surrounds us, because we do no surround the world. Our global market continues to grow, and we must do everything in our power to keep up.

Inditex founder, Amancio Ortega Gaona, started his fashion business in 1949 at the age of 13, as a delivery boy for a local shirt maker in La Coruña, Spain and in a little over a decade was working as shop manager. With the knowledge and experience gained along the way, he began developing his own designs, after which he left his job to start his own business in the early 1960s. With only $25 in startup capital and working out of his sister’s home, Ortega’s vision was to replicate popular fashions using affordable materials, creating high demand clothing that could be sold at lower prices. He sold his gowns, housecoats, and lingerie to his former employer and other local shops. By 1963 he had opened his

Grupo Sans, a leader in Spanish underwear market in 1970s and 1980s, was founded in 1960 in Mataró. Becoming a part of Sara Lee Corporation, the multinational company with the biggest at that time textile division in the world, in 1991, contributed to the growth and development of the company, and has led to the fact that 9 years later(in 2000) Grupo Sans’ income accounted for more than one-fourth of Sara Lee’ income in Spain.

By  the  end  of  the  1970s,  there  were  half  a  dozen  Zara  stores  in  Galicia,  Spain.  In  1985,  Inditex  S.A.  was  established  as  a  holding  company  atop  Zara.  Since  then,  its  expansion  gathered  momentum:  the first store outside Spain was opened in 1988 (in Portugal), and, between 1989 and 1998,  the  company  expanded  to  18  additional  countries,  developing  or  acquiring  other  fashion  brands, such as Pull and Bear and Massimo Dutti.  Throughout this process, the Group underwent deep structural changes and went from being  an exclusively Spain ‐ based producing chain in 1980 to deploying, by 2005, company audited  and certified production centers and providers in the Americas, Africa, Europe and Asia. This  new  scheme  posed  new  challenges  for  Inditex,  especially  in  terms  of  labor,  social  and  economic  concerns  regarding  its  employees,  its  suppliers  and  outsourcing  shops,  as  the  company  struggled  to  uphold  the  values  and  principles  inspiring  the  Group’s  CSR  strategies.  Zara was a successful store, and success brings visibility. For several, reasons, both the media  and the NGO community had their eyes set on Zara, a fact the company could not ignore.

Amancio Ortego started clothing factories in Spain, in 1963. In an attempt to integrate the manufacturing with the unpredictable customer demand, he opened the first Zara store in La Coruna in 1997. Zara came under Intidex multinational companyin 1985 and Jose Maria Castellano Rios, who shared the same opinion as Ortego that IT was important for their business, joined the company, who later became the CEO of Intidex in 1997. By 2003, Intidex had 1,558 stores in 45 countries, of which 550 were part of Zara chain.

The names Zara, Pull & Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home, and Uterqüe may sound unfamiliar to some but they are the brain child of Amancio Ortiga, founder of Inditex. Amancio Ortega is a native of Spain and is now considered the 4th riches person in the world according to Forbes Magazine (At a Glance, 2014). Starting as a small company that produced women’s night clothes for garment wholesalers, Inditex grew after a large canceled order (Sardar, 2012). The first store Zara was created for canceled items but eventually turned into the company’s flag ship store. Currently Pablo Isla Alvarez de Tejera is now the Chairman and CEO of Inditex after the retirement of Ortega. He started as chairman in 2011 but started

Amancio Ortego started clothing factories in Spain, in 1963. In an attempt to integrate the manufacturing with the unpredictable customer demand, he opened the first Zara store in La Coruna in 1997. Zara came under Intidex multinational companyin 1985 and Jose Maria Castellano Rios, who shared the same opinion as Ortego that IT was important for their business, joined the company, who later became the CEO of Intidex in 1997. By 2003, Intidex had 1,558 stores in 45 countries, of which 550 were part of Zara chain.

The U.S. values and beliefs include equality, achievement, youthfulness, efficiency, practically, self-actualization, and freedom. The changes in a social/cultural environment affect the consumer's behavior, which in turn will affect the sales of products. The trends in social/cultural environmental include individuals that will change view of themselves, others and the world around them while moving toward self-fulfillment.

In other words, it refers to ‘the technology issues that impact on how an organization brings its product or service to the market place’. The role of the internet must also be taken into consideration. A company must ask itself if there are any the technological advancements taking place, or if the government is investing on technology research. It is fundamental to keep in touch with the latest technological improvement in order to be more efficient. Businesses are aware that ‘good technological infrastructure leads to the better production resulting in reduced wastage and lower

The unit of analysis is the Zara Group, which belongs to the Spanish company Inditex. It is a very global company which has been selected due to it does an intensive application of ICTs in its processes, mainly manufacturing and distribution ones, as well as its logistical processes. Because of this, it can stand out among its competitors. (María Teresa GARCÍA-ÁLVAREZ, p.998)