Analysis

SWOT
Strengths Weaknesses

1. Quality and design: fashion with the latest designs at very reasonable prices. With instant 1. Market saturation: by having products of good quality and good prices, everyone has them so

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purchase culture: customers know that if they like something they have to buy at the moment. that with them no differentiation is acquired.
2. Cannibalism between brands: The brands become the competition between them.
2. Just in time: production of garments that they will be sold and fast distribution to the stores
thanks to an important system of Logistics. Allows for high rotation product and have no stocks. 3. Centralized distribution in Spain: Disadvantage in its international expansion because it is
more expensive and slower product distribution.
3. Mini-collections all year: great variety of models and all adapted to the tastes and weather of

the moment Avoiding having products that are not sold 4. Weak personnel policy: unmotivating employment, with low wages, many hours of work,
contract temporary, without the possibility of promotion, without training and without
4. Prestigious brands: the reputation of Inditex and its brands facilitate entry into new markets, participation systems or contribution to improve the product.
increased sales and the Hiring good professionals.

5. Poor Marketing: Zara, a significant subsidiary that contributes more than 70% to Inditex’s
5. Stores, more than just points of sale: Inditex stores are key to the group strategy and everything revenue, spends nothing literally on its marketing. The company may be able to invest more in
is studied. They are located in the best locations in the city, they are spacious and orderly marketing if it decides to use its size as leverage instead of using it as an excuse not to invest.
premises in which customers can enjoy the fashion: looking at, touching and trying on clothes

without problem. 6. High Number of Employees: Inditex, the top fashion retailing company, requires many
employees to manage its operations across the globe. Currently, Inditex employs more than
6. Comfortable after-sales system: long deadlines return, which facilitates the purchase 165,000 employees. Such a large number of employees would burden the company since a
compulsive and repair service of the garments. higher number of employees means increased operating costs.

7. Attractive window displays: display the new products and encourage consumers to come in and
buy.
8. Care of the environment: policy of corporate social responsibility that does of Inditex a
friendlier organization of face the public.
7. Low Presence In Developing Economies: Similarly, Inditex is one of the businesses that
operate significantly in developed economies. But, at the same time, it has a deficient presence in
developing economies. For example, Inditex has opened 303 stores in China, a developed
economy. Meanwhile, it has only 24 stores in India, a developing market.

Opportunities Threats

1. Current economic crisis: people spend less money on unnecessary things such as
1. Growth of municipalities: due to price of homes in cities, the population is fashion.
moving to peripheral municipalities They are growing little by little. are places

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where new stores can be opened. 2. Increased competition in the sector: because in recent years fashion has ceased to
2. Creation of outlets: clothes from others are sold seasons at lower prices. Is a be for the upper classes. Provoking demanding clients: Everyone knows fashion
possibility of reaching more people and trying to sell not-so-consumed products. nowadays and almost everyone cares about dressing well. In addition, there are

groups of people who do not want to dress like the others, they want to differentiate
3. Population aging: increase in life expectancy. The population is more mature and themselves.
is a sector that generally has greater purchasing power. They can increase the sales. 3. Creation of online stores: they have lower costs and also allow people to buy

clothes from anywhere in the world without having to travel. All fashions are
4. Growing interest in personal image: and also for fashion, including the youngest, accessible.
men, and even pregnant women, most disinterested sectors in the past. 4. Existence of different laws in the different markets in which Inditex opens a store

and must respect all of them and adapt to them.
5. Continuous technological advances that allow the creation of exchange systems

information faster, keep the just-in-time production with machines and more 5. Climate diversity: each country and even regions have different climates, so
complex logistics systems. Inditex you can maintain your business strategy fashion companies have to know the differences and adapt to them.
differentiator.

6. Concern for the environment: climate change is a real problem and for this reason
6. Law of unification of the sizes that favors to Inditex for having different brands the population is very aware. It forces companies to implement green policies and
and found in different countries. many of them involve a large expense.

7. Globalized world: it is easier to create subsidiaries throughout the world. 7. Inditex scouts are prohibited from entering many of the fashion shows since they
see the designs for the next season and then Inditex takes them out much earlier.