THE MAN OF FROM ZERO TO ZARA

ZARA
 SYNOPSIS
Don Amancio Ortega Gaona was born in 1936 in Busdongo de
Arbas, Spain just as the Spanish Civil War was erupting. By the age
of 14, he started working as an errand boy that delivers fabrics for
a local clothing retail store. When he was 16, he started dealing
with the store’s customers and suppliers and eventually became a
senior manager. He also designed clothes and practice to make
them out of the left over fabrics from the retail store and sell them.
By 16, he started to run his first company, GOA, with the help of his
family members as workers and some women who would work for a
little money. With enough cash, Ortega opened his first storefront in
1975 and named it Zorba but later on, he changed it to Zara
because it was already taken.
 SYNOPSIS
Zara stores refresh their stocks twice a week and receive
orders within 48 hours forcing him to open his first Zara stores
near La Coruña (Ortega’s hometown). Ten years later, he
founded his holding company Inditex and opened his first
international store in Portugal and followed by New York and
Paris. In the factory, restocking continue at top speed that the
designers create about three items a day. Because Zara only
have one manufacturing centre, distributing the clothes may not
be on time in countries are farther from La Coruña. How long
can Zara maintain its relentless expansion?
 TIME CONTEXT

4th Quarter of 2012

 TIMELINE
 1936- Ortega born in Busdongo de Arbas
 1970- Ortega imposed the 48 hours rule, forcing him to
open his first Zara store near La Coruña
 1975- Ortega opened his first storefront
 1980- He founded his holding company Inditex and opened
his first international store in Portugal
 Late 1980’s- He followed the store in New York and Paris
 TIMELINE
1990’s- Zara proliferated across Europe although much of the
production was kept close to home
 2010- Net profits matched at $2.71 M
 2011- Inditex produced 835,000 garments
July 2012- Ortega overtook Warren Buffett to become the
world’s 3rd richest man
 9 months of 2012- Zara’s sales revenue amounted to $14.6 B,
Company’s growth shows no signs of slowing
 VIEW POINT
DON AMANCIO
ORTEGA GAONA
(Spanish Billionaire Businessman,
Founder and Former Chairman of
Inditex Fashion Group and Zara
Clothing and Accessories Shops)
 STATEMENT OF THE PROBLEM

 How can Zara distribute their orders

in time especially in countries that is far
from Manufacturing Center ?
 STATEMENT OF THE OBJECTIVE
 To give efficient courses of action that will
solve the problem regarding the timely
distribution of Zara.
 AREAS OF CONSIDERATION
STRENGTHS
 Research and Development skills and
leadership
 Cost of differentiation advantage
 Well developed corporate strategy
WEAKNESSES
Narrow product line
 Poor Marketing Plan
OPPORTUNITIES
 IT continues to become cheaper
and have more practical
applications
 Expand into foreign markets
THREATS
 Increase in foreign competition
 Change in demographic factors
 Change in consumer taste
 ALTERNATIVE COURSES OF ACTION
ACA 1
Zara should establish Manufacturing Centers in
emerging countries.
ACA 2
Zara should increase the number of their shipping
services.

ACA 3
Zara should find and hire strong human resource team.
 LEGENDS
3- MOST OBTAINABLE

CONCLUSION 2- MORE OBTAINABLE

1- OBTAINABLE

INDICATORS ACA 1 ACA 2 ACA 3

ACCESSIBILITY 3 2 2

CONSISTENCY 3 2 2

EFFECTIVENESS 3 3 2

DURABILITY 3 3 2

TOTAL 12 10 8
Definition of Terms
Accessibility- the ACA is able to reached or used
Consistency- the ACA is able to move in a persistent and firmness
manner
Distribution- means to spread the product throughout the market place
such that a large number of people can buy it (THE
ECONOMIC TIMES)
-the act of delivering something to a store (MERRIAM
WEBSTER)
Durability- the ACA is able to exist in a good condition over a long
period of time
Effectiveness- the ACA is able to produce a result that is wanted
 DECISION MATRIX / ACA SELECTION
Alternative Courses of Action number 1 is about establishing
manufacturing centers in emerging countries. It was the most
accessible, consistent, effective and durable among all because it
will resolve the occurrence of problem in timely distribution of
orders across its stores in the world.
If Zara will use this action there’s also a possibility that they
can maintain its good performance as well as relentless
expansion for being the most popular fashion empire in the
world.
 RECOMMENDATION AND ANALYSIS OF ACA
Zara struggling in distributing products that is far from its
manufacturing center that it almost took 1 to 2 days before they
assort their product.
Therefore, we highly recommend that the most attainable way
to resolve the stated problem is to establish manufacturing centers
in emerging countries that might shorten the hours or days and to
boost the distribution process of Zara rapidly. Also it can help the
consumer to get their orders in a fastest scheme and to Zara itself
owing to convenience to get the demand and give the purchased
product to its customers through it not practices their 48 hours rule.
 OPPORTUNITY SEEKERS
ARANDUQUE NANAGAD
BOSOTROS PANGILINAN
DE LARA PIAMONTE
SUBYAGA
DORUELO
TAMAYO
LU VITAN
THANK YOU!