Why is Gaona's "fast fashion" business model so successful in today's global marketplace?

 

Answer:

Amancio Ortega's principles were modest: he started making sacks that he sold in the Galician markets. Later he acquired a small clothing and sack-making company.

Always works with a minimum reserve of products that they sell based on the demand of their customers, especially customers from A Coruña with some purchasing power Little by little, he revealed the best secrets to connect with the client. He understood that the store and the showcase were the point of attraction and contact with the people who passed by the street and looked for clothes to get dressed. Concluded that the fewer intermediaries the better, in this way it is possible to obtain more business margin and greater assimilation of customer tastes.

During the following four years, a clothing store worked in La Maja, haberdashery and sale of textile garments well known in A Coruña. The store location strategy did not go unnoticed by Ortega. It started to understand another key that years later formed the structure organization of your company: the stores must be located in centers of great influx of public, such as wide streets or shopping areas, to achieve call the attention to the maximum number of people and get them to enter the store. Amancio Ortega Gaona, was clear that he wanted to own his own company. In 1963, decides to embark on the world of fashion alone, and creates the company Confecciones GOA, S.A. (initials in reverse). Produced robes for women in addition to baby cuckoos. The quality and sophistication of the gowns varied in function of the environment and social condition of women. The business model contravened the usual norms of the sector.

Instead of fixing the price based on production costs, decided to adapt the latter to the amount for which he intended to sell the garment. The clothing company GOA used to employ up to 500 workers. Its objective it was about eliminating competition and becoming the main producer of dressing gowns from all over Spain. Ortega was then 27 years old and it would still take twelve more to see the birth of the first Zara store, which opened on Calle Torreiro, in A Coruña, in front of what was then the largest business in the city: the Barros warehouses, today missing. Since then, Amancio has not stopped growing. His desire to excel, his constant critical capacity, his effort, his ambition, dedication and great work have allowed him create a great empire. He is considered the richest man in Europe and has the Gold Medal for Merit at Work.

Today the Zara group is within the Spanish holding company Inditex with four branches. Group of 19 manufacturers, 6 distributors, 1 representative office in China (Inditex Beijing), Zara Holding that has 11 subsidiaries in as many countries. It is also diversifying into sectors such as banking, construction or vehicle dealers. In all of them, centralized management is exercised and a policy and strategy is applied at the group level.

The Zara Zara case 'is not new, but the popularization of the value of its positioning (the company that has occupied the first places in the ranking) is well worth a little analysis. According to the background of the case, it has been established that: Zara has achieved, through a particular and risky-at the time-marketing approach to make a space for itself in the minds of consumers. The brand has managed to transfer the values ??of the product and therefore of the company, thus becoming the perfect vehicle to connect with the consumer. And all with (almost) zero advertising. It is one of its characteristics.

The strategy used by this multinational is to have good quality products at a low price, its logistics network, the proximity of the production of its garments and the high turnover of its products (it is able to supply its stores twice per week