What Business Is Zara In (Revised)

Description

Industria de Diseño Textil, SA (Inditex), primarily through its flagship brand Zara, had grown to be the world’s number-one fashion manufacturer and retailer with the introduction of what many considered a disruptive fast-fashion business model. However, Inditex’s chief executive officer insisted that this term failed to describe the company’s business model accurately. Like other successful business model innovators, Inditex in 2019 was faced both with new competitors who had successfully copied and enhanced key components of its approach and with the growing desire of fashion conscious consumers to shop online. Inditex needed to find a way to continue to differentiate Zara in this evolving industry while capturing more than its share of the tremendous market growth anticipated for the future.

Learning Objective

This case can be used in an undergraduate- or graduate-level course on business strategy or managing innovation to illustrate and discuss the benefits and challenges of disruptive business innovation in a competitive marketplace. Working through the case will give students the opportunity to do the following: ·Understand how a company’s business model directly relates to how it achieves profitability. ·Realize how fundamentally different business models can coexist within an industry. ·Understand the concept of a disruptive business model and examine its impact on an industry. ·Discuss how incumbent competitors can or cannot effectively react to a disruptive business model. ·Learn how to visualize a business model.

Keywords

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