VN AU 2003 01345 13 200309 Value Chain Management

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VALUE CHAIN ANALYSIS: INDITEX

1. Introduction

Inditex – the Spanish fashion corporation that owns various famous fashion brands in the world

including Zara, Pull and Bear – has been ranked by Gartner (2018) to be one of the top 25 supply

chains in the world in 2018. As such, this paper aims to provide an in-depth analysis on the value

chain of Inditex, as well as how the company has been able to formulate highly competitive

logistics and supply chain operations that perform highly above the market average over the years.

In particular, a summary on different stages in Inditex’s value chain will be extracted first and

foremost. After that, the identification of Inditex’s key customers, suppliers, partners and

competitors will be conducted. Lastly, a detailed evaluation of Inditex’s logistics and supply chain

performance will be given out at the end of the paper.

2. Inditex’s Value Chain Analysis

2.1.Stages in Inditex’s Value Chain

According to Porter (1980), there can be two main groups of activities within a company’s value

chain, which are: support and primary. The paper formulated by Aftab et al. (2018) has been able

to discuss in detail on the flow of all stages within Inditex’s value chain. First and foremost, in

terms of the primary activity of inbound logistics, Inditex headquarters will issue designs and

distribution information to the company’s factories and warehouses around the world, all of which

will then manufacture products based on the given demand statistics using pre-sourced materials.

The flow of all production operations will be based on the lean manufacturing philosophy that will

produce only a limited amount of each design to formulate a sense of exclusivity. After that,

outbound logistics activity is conducted by supplier clusters around the world to the surrounding

markets to achieve fast distribution and store refreshes. However, Nazir (2019) has argued that

Inditex has been conducting very little marketing initiatives that take only 0.3 percent of total sales,

as it has been putting major efforts and expenses into the optimization of its supply chain to achieve

sustainable competitive advantages instead. Throughout the whole value chain, Inditex frequently

performs the support activity of technology development, so that continuous improvements to its

supply chain and manufacturing operations, which have been the corporation’s key competency

over the years, could be achieved in the future.

2.2.Customers, Suppliers, Partners and Competitors

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VALUE CHAIN ANALYSIS: INDITEX 1. Introduction Inditex – the Spanish fashion corporation that owns various famous fashion brands in the world including Zara, Pull and Bear – has been ranked by Gartner (2018) to be one of the top 25 supply chains in the world in 2018. As such, this paper aims to provide an in-depth analysis on the value chain of Inditex, as well as how the company has been able to formulate highly competitive logistics and supply chain operations that perform highly above the market average over the years. In particular, a summary on different stages in Inditex’s value chain will be extracted first and foremost. After that, the identification of Inditex’s key customers, suppliers, partners and competitors will be conducted. Lastly, a detailed evaluation of Inditex’s logistics and supply chain performance will be given out at the end of the paper. 2. Inditex’s Value Chain Analysis 2.1.Stages in Inditex’s Value Chain According to Porter (1980), there can be two main groups of activities within a company’s value chain, which are: support and primary. The paper formulated by Aftab et al. (2018) has been able to discuss in detail on the flow of all stages within Inditex’s value chain. First and foremost, in terms of the primary activity of inbound logistics, Inditex headquarters will issue designs and distribution information to the company’s factories and warehouses around the world, all of which will then manufacture products based on the giv ...
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