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Chapter 3: Zara: Fast Fashion from Savvy Systems Medium quality “fast” fashion clothing at Chapter 3: Zara: Fast Fashion from Savvy Systems Medium quality “fast” fashion clothing at affordable prices. A Zara store in Manhattan © Minder Chen, 1993 -2012 -1 -

Why Study Zara? • To understand appreciate : – The counterintuitive and successful strategy Why Study Zara? • To understand appreciate : – The counterintuitive and successful strategy of Zara – The technology, which has made all of this possible © Minder Chen, 1993 -2012 -2 -

© Minder Chen, 1993 -2012 - 2 -3 3 - © Minder Chen, 1993 -2012 - 2 -3 3 -

Latest Fashion • ZARA · Fall / Winter 2011 - TRF - Young http: Latest Fashion • ZARA · Fall / Winter 2011 - TRF - Young http: //youtu. be/py. MQ 3 e. Owwx 0 • "TRF" is short for Trafaluc- offered by Zara for the youth/teenage • • http: //www. youtube. com/user/zara#p/u/4/fm 0 Tp. EMKDFI (Store in Sydney) © Minder Chen, 1993 -2012 -4 -

Humble beginning: Amanciao Ortega Gaona • At age of 13, worked as a gofer Humble beginning: Amanciao Ortega Gaona • At age of 13, worked as a gofer in a shirt store • In 1963, he started his own lingerie production firm. • In 1972 he founded Confecciones Goa, S. A. , the first garment-making factory of Inditex • 1975, he started Zara – When a German wholesaler suddenly canceled a big lingerie order in 1975, Amancio Ortega thought his fledgling clothing company might go bankrupt. All his capital was tied up in the order. There were no other buyers. In desperation, he opened a shop near his factory in La Coruña, in the far northwest corner of Spain, and sold the goods himself. He called the shop Zara. © Minder Chen, 1993 -2012 -5 -

Fashionable But Not Pricy • In the early 1960 s Ortega became the manager Fashionable But Not Pricy • In the early 1960 s Ortega became the manager of a local clothing shop, where he noticed that only a few wealthy residents could afford to buy the expensive clothes. Thus he started producing similar items at lower prices, purchasing cheaper fabric in Barcelona and cutting out pieces by hand using cardboard patterns. Ortega then sold his items to local shops; he used the profits to start his first factory in 1963 at the age of 27. © Minder Chen, 1993 -2012 -6 -

Impacts of Amanciao Ortega’s Earlier Experiences • When Amanciao Ortega was 13 years old Impacts of Amanciao Ortega’s Earlier Experiences • When Amanciao Ortega was 13 years old he worked as a delivery boy for a shirt maker who produced clothing for the rich. He later worked as a draper's and tailor's assistant. In seeing firsthand how costs mounted as garments moved from designers to factories to stores, Ortega learned early on the importance of delivering products directly to customers without using outside distributors. He would later employ such a strategy with great success at Zara, attempting to control all of the steps in textile production in order to cut costs and gain speed and flexibility. Read more: Amancio Ortega 1936— Biography - Early career, The zara phenomenon, Inditex http: //www. referenceforbusiness. com/biography/M-R/Ortega-Amancio-1936. html#ixzz 1 bf. L 4 MMA 6 -7© Minder Chen, 1993 -2012

Inditex • Inditex, one of the world’s largest fashion distribution groups, has more than Inditex • Inditex, one of the world’s largest fashion distribution groups, has more than 5, 000 stores in 77 countries. In addition to Zara, the largest of its retail chains, Inditex has seven other formats: Pull &Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home and Uterqüe. • Its unique management model, based on innovation and flexibility, and its vision of fashion – based on creativity and quality designs, together with the capacity to react quickly to market demands – has enabled it to enjoy rapid international expansion and an outstanding reaction to its various commercial concepts. • The Inditex Group is made up of more than 100 companies operating in textile design, manufacturing and distribution. © Minder Chen, 1993 -2012 -8 -

OEM ODM OBM Creative Conceptualization ODM R&D BRANDING OEM (Supply Chain) © Minder Chen, OEM ODM OBM Creative Conceptualization ODM R&D BRANDING OEM (Supply Chain) © Minder Chen, 1993 -2012 Demand Chain - 9 -

Net Worth • • Net Worth $31 B as of March 2011 The richest Net Worth • • Net Worth $31 B as of March 2011 The richest person in Spain The #2 richest person in Europe The #7 richest person in the world © Minder Chen, 1993 -2012 - 10 -

Went Public in 2001 • In May 2001, a particularly tough period for initial Went Public in 2001 • In May 2001, a particularly tough period for initial public offerings, Inditex sold 25% of its shares to the public for € 2. 3 billion. • Inditex's sales— 70% of which come from Zara. • Zara's sales and net income have continued to grow at an annual rate of over 20%. • Ortega's owned 59% share of the company. Sales in 2000 • Inditex $2. 43 billion • H&M $3. 2 billion • Gap $13. 6 billion © Minder Chen, 1993 -2012 - 11 -

Gap versus Inditex at a Glance € 12. 5 billion in global sales 2010 Gap versus Inditex at a Glance € 12. 5 billion in global sales 2010 € 1. 73 bn ($2. 45 bn) of net profit © Minder Chen, 1993 -2012 1 euro = 1. 3948 US dollars - 12 -

Zara in Australia 2011 © Minder Chen, 1993 -2012 - 13 - Zara in Australia 2011 © Minder Chen, 1993 -2012 - 13 -

Apple Beijing Store © Minder Chen, 1993 -2012 - 14 - Apple Beijing Store © Minder Chen, 1993 -2012 - 14 -

Apple vs. Zara What is the similarity? Jobs fostered an approach to product design Apple vs. Zara What is the similarity? Jobs fostered an approach to product design that evoked haute couture as much as high-tech. © Minder Chen, 1993 -2012 - 15 -

Apple © Minder Chen, 1993 -2012 - 16 - Apple © Minder Chen, 1993 -2012 - 16 -

Zara’s Positioning A. “Armani at moderate prices!” B. Fashions are more “Banana Republic, ” Zara’s Positioning A. “Armani at moderate prices!” B. Fashions are more “Banana Republic, ” prices are more “Old Navy. ” C. Look like high fashion but are comparatively inexpensive. • Price D. Cheap Chic • Fashion • • © Minder Chen, 1993 -2012 Quality Customer segmentation - 17 -

Zara as a Zara as a "fashion imitator" company and low cost products. Trends setter? Instead of setting the trends, Zara follows them. © Minder Chen, 1993 -2012 - 18 -

Zara Positioning The Zara brand is well regarded among the core 25 - to-35 Zara Positioning The Zara brand is well regarded among the core 25 - to-35 year-old consumers? © Minder Chen, 1993 -2012 - 19 -

What Is Fashion? Fashion is the imitation of a given example and satisfies the What Is Fashion? Fashion is the imitation of a given example and satisfies the demand for social adaptation. . The more an article becomes subject to rapid changes of fashion, the greater the demand for cheap products of its kind. bellwether Trend Classic — Georg Simmel, “Fashion” (1904) Fad © Minder Chen, 1993 -2012 - 20 -

Fashion Diffusion 60 s-70 s http: //www. eurbanista. com/the-history-of-fashion-diffusion-in-pictures/ © Minder Chen, 1993 -2012 Fashion Diffusion 60 s-70 s http: //www. eurbanista. com/the-history-of-fashion-diffusion-in-pictures/ © Minder Chen, 1993 -2012 - 21 -

Fashion vs. Art • Steve Jobs’ philosophy of aesthetics reminds me [Mona Simpson] of Fashion vs. Art • Steve Jobs’ philosophy of aesthetics reminds me [Mona Simpson] of a quote that went something like this: “Fashion is what seems beautiful now but looks ugly later; art can be ugly at first but it becomes beautiful later. ” • http: //www. nytimes. com/2011/10/30/opinion/mona-simpsons-eulogy-forsteve-jobs. html? _r=1 © Minder Chen, 1993 -2012 - 22 -

Apple vs. Zara • Zara 12000 styles a year. • Apple 10 or so Apple vs. Zara • Zara 12000 styles a year. • Apple 10 or so product lines, very focus. © Minder Chen, 1993 -2012 - 23 -

Innovation Innovation "Zara is possibly the most innovative and devastating retailer in the world. " -- Louis Vuitton Fashion Director Daniel Piette Apple Commercial http: //www. youtube. com/watch? v=Wy. GT 2 F 74 p_A&feature=related © Minder Chen, 1993 -2012 - 24 -

Zara as a Rule Breaker • Contract Manufacturing (Outsourcing, offshore outsourcing)? – factory workers Zara as a Rule Breaker • Contract Manufacturing (Outsourcing, offshore outsourcing)? – factory workers in Spain make an average of $1, 650 a month, vs. $206 in China's Guandong Province – 34% manufacturing is outsourced to Asia, and 14% to parts of Europe (mainly Italy and Turkey), those tend to be the more basic items. The high-fashion stuff, 49% of what it sells, is cut and finished in “proximity” (Spain, Portugal and Morocco), though some sewing is done by small local cooperatives. [ H&M 75% to Asia][[Check label]] • Marketing? (Budget) – 0. 3% vs. 3. 5% of revenue • Batch Size? – Zara produces in small batches which creates a sense of scarcity with consumers. (Buy now or never) – Fail products% (10% vs. 1%) © Minder Chen, 1993 -2012 - 25 -

Pros and Cons of Contact Manufacturing • Costs • Controls/Coordination ü Use IT for Pros and Cons of Contact Manufacturing • Costs • Controls/Coordination ü Use IT for centralized planning & decentralized execution • Reduce a single point of failure? • Risks – Sweatshop – Environmental issues – Quality © Minder Chen, 1993 -2012 - 26 -

Labor Costs • Zara’s factory workers in Spain make an average of $1, 650 Labor Costs • Zara’s factory workers in Spain make an average of $1, 650 a month, vs. $206 in China's Guandong Province. But the company saves time and money on shipping. http: //www. businessweek. com/magazine/content/08_42/b 4104066866245. htm I began working in Bangladesh's garment industry at the age of 12, making just $3 a month. Kalpona Akter © Minder Chen, 1993 -2012 - 27 -

97% of clothes are not made in the United States. http: //whereamiwearing. com /curriculum/ 97% of clothes are not made in the United States. http: //whereamiwearing. com /curriculum/ How many people does it take to make a pair of Jeans? http: //www. youtube. com/watch? v=q. Hev 86 ELF 2 w http: //shopfairtrade. wordpress. com/2011/09/29/where-does-your-shirt-come-from/ © Minder Chen, 1993 -2012 - 28 -

High Cost of Cheap Fashion • http: //www. npr. org/2013/05/02/180557959/ethicalfashion-is-the-tragedy-in-bangladesh-a-finalstraw • Garment factory fire High Cost of Cheap Fashion • http: //www. npr. org/2013/05/02/180557959/ethicalfashion-is-the-tragedy-in-bangladesh-a-finalstraw • Garment factory fire Bangladesh, April 2013 death toll reached more than 400. • “CSR” pressure aims to force firms to meet a “triple bottom line” that considers not just profit but working conditions and impact on the environment. • © Minder Chen, 1993 -2012 http: //www. forbes. com/sites/howardhusock/2013/ 05/02/the-bangladesh-fire-and-corporate-socialresponsibility/ - 29 -

http: //www. cnn. com/2013/05/02/world/asia/bangladesh-us-tshirt/index. html? hpt=hp_t 1 © Minder Chen, 1993 -2012 - 30 http: //www. cnn. com/2013/05/02/world/asia/bangladesh-us-tshirt/index. html? hpt=hp_t 1 © Minder Chen, 1993 -2012 - 30 -

Outfit Clashes 撞衫 ultimate fashion faux pas -wearing the same dress as someone else. Outfit Clashes 撞衫 ultimate fashion faux pas -wearing the same dress as someone else. www. Dressregistry. com Prevents Same-Dress Embarrassment As any fashionista can tell you, it’s not just being “in fashion” that matters, it’s being “in fashion” when few others are. http: //news. xinhuanet. com/english 2010/entertainment/2010 -06/22/c_13363544. htm © Minder Chen, 1993 -2012 - 31 -

Zara as a Rule Breaker • Markdown? – Markdown legend (? ) – 50% Zara as a Rule Breaker • Markdown? – Markdown legend (? ) – 50% vs. 15% Zara Thrives by Breaking All the Rules • Frequency of new products arrival & store layout? – Ship twice a week (Z-Day) – Like walking into a new store every two weeks (with store layout changed – directed from the Cube) • Out of stock (Good or Bad)? – Encourages customers to visit often(# of store visit per year 3 vs. 17) • Store product mix decision – Zara retail store managers, not headquarters, determine their own store’s product mix. © Minder Chen, 1993 -2012 - 32 -

Markdown Industry average markdown ratio is approximately 50%, while Zara ration is about 15%. Markdown Industry average markdown ratio is approximately 50%, while Zara ration is about 15%. © Minder Chen, 1993 -2012 - 33 -

Zara as a Rule Breaker • Store Ownership? (Rent vs. Own) • Location of Zara as a Rule Breaker • Store Ownership? (Rent vs. Own) • Location of warehouses/distribution centers? – Spain – Get merchandise to European stores within 24 H hours, flying goods via commercial airliners to stores in the Americas and Asia in 48 H. – Some clothes it has made in China are shipped to Spain and then back to shops in China. • Design Team (Star Designer? ) – Rotation (why? ) – Cross-functional teams © Minder Chen, 1993 -2012 - 34 -

The Cube © Minder Chen, 1993 -2012 - 35 - The Cube © Minder Chen, 1993 -2012 - 35 -

Shipping of Clothes from Distribution Center • Clothes are ironed in advance and packed Shipping of Clothes from Distribution Center • Clothes are ironed in advance and packed on hangers, with security and price tags affixed. • More than 2. 6 million items move through the distribution center each week, See pictures at http: //images. businessweek. com/ss/06/08/zara/source/1. htm © Minder Chen, 1993 -2012 - 36 -

The quick change artist • • • http: //www. forbes. com/2010/07/29/forbes-india-zara-business-model-tweak. html © Minder The quick change artist • • • http: //www. forbes. com/2010/07/29/forbes-india-zara-business-model-tweak. html © Minder Chen, 1993 -2012 Zara's ability to quickly bring the latest designs to its stores rests on its unique business model. Zara's design team monitors fashion trends and store sales. Based on this they come up with 1, 000 designs a month. They send these out for manufacturing around the world. Completed designs are shipped back to Spain. Local store managers in each country tell the Zara head office in Spain what the store needs and how much. The design team then flies or trucks out consignments for each of Zara's over 1, 608 stores based on local needs and trends. A store gets consignments twice a week. - 37 -

Co-location leveraged at Zara The cross-functional teams can examine prototypes in the hall, choose Co-location leveraged at Zara The cross-functional teams can examine prototypes in the hall, choose a design, and commit resources for its production and introduction in a few hours, if necessary Buyer Production Planner Marketing Specialist Designer http: //www. innovel. net/? cat=6 © Minder Chen, 1993 -2012 - 38 -

Zara Headquarter © Minder Chen, 1993 -2012 - 39 - Zara Headquarter © Minder Chen, 1993 -2012 - 39 -

The Apparel Lifecylce • Watch the BBC news video below! • What is the The Apparel Lifecylce • Watch the BBC news video below! • What is the risk faced by Zara? http: //www. fashionnetasia. com/en/Industry. News/Business. Resources/Detail. html? id=1891 © Minder Chen, 1993 -2012 - 40 -

Fashion Reconnaissance • Spotting trends everywhere from the street to movies to couture fashion Fashion Reconnaissance • Spotting trends everywhere from the street to movies to couture fashion shows and, • Information from its customers to keep its merchandise fresh. © Minder Chen, 1993 -2012 - 41 -

Results • Zara has higher manufacturing costs than rivals. • Inditex gross margins are Results • Zara has higher manufacturing costs than rivals. • Inditex gross margins are 56. 8 percent compared to 37. 5 percent at Gap. © Minder Chen, 1993 -2012 - 42 -

Information and IT • Zara Store – Hard data: POS data – Soft data: Information and IT • Zara Store – Hard data: POS data – Soft data: Ask customers their preferences (PDA) – Firm data: Nonsale data (clothes abandon at the fitting room area) What is this called in ecommerce? • Design/Production Team – fabric is cut and dyed by robots (laser cutting) • Not mentioned specifically: – ERP, SCM, CRM, e-commerce web site © Minder Chen, 1993 -2012 - 43 -

Rapid-fire Fulfillment Ferdows, K. , M. A. Lewis, J. A. D. Machuca. “Rapid-fire fulfillment”, Rapid-fire Fulfillment Ferdows, K. , M. A. Lewis, J. A. D. Machuca. “Rapid-fire fulfillment”, Harvard Business Review, 82(11), 2004. © Minder Chen, 1993 -2012 - 44 -

Ten Fingers: Both Hands • “You need to have fingers touching the factory and Ten Fingers: Both Hands • “You need to have fingers touching the factory and five touching the customer. ” • Translation: – Control what happens to your product until the customer buys it. – Do everything possible to let one hand help the other. © Minder Chen, 1993 -2012 - 45 -

Vertical Integration Design/ Production/ Store Customer Logistics 5 fingers on production & 5 fingers Vertical Integration Design/ Production/ Store Customer Logistics 5 fingers on production & 5 fingers on customers © Minder Chen, 1993 -2012 - 46 -

Man’s Department (ZARA store in Almere, The Netherlands) © Minder Chen, 1993 -2012 - Man’s Department (ZARA store in Almere, The Netherlands) © Minder Chen, 1993 -2012 - 47 -

Marketing and Store Locations • Zara relies more on location of a retail establishment Marketing and Store Locations • Zara relies more on location of a retail establishment rather than advertising to attract customers. • Only. 3 percent of sales are spent on advertising for the company compared to that of its competitors who spend around 3. 5 percent. © Minder Chen, 1993 -2012 - 48 -

Zara Has A Self-Reinforcing System. . Leverage Your Assets Close communication/ information loop Stick Zara Has A Self-Reinforcing System. . Leverage Your Assets Close communication/ information loop Stick to a rhythm © Minder Chen, 1993 -2012 - 49 -

Communication Loops • Close the communication loop: • Customer Store Manager/Staff Market Specialists (i. Communication Loops • Close the communication loop: • Customer Store Manager/Staff Market Specialists (i. e. , Fashion Buyer) Designer Production Staff Buyer (Procurement Specialist) Subcontractor Warehouse Managers/Distributor © Minder Chen, 1993 -2012 - 50 -

Customer Design • Inditex Executive President Jesus Echevarria stated that “Everything is happening in Customer Design • Inditex Executive President Jesus Echevarria stated that “Everything is happening in stores”. • From customers to designers. “It turns the customer into the starting point of the fashion chain and not the designer. ” • People on the street is the runway that Zara studies. © Minder Chen, 1993 -2012 - 51 -

Fast Fashion • • • Just-in-Time Quick Response Fast Fashion Information Technology Push vs. Fast Fashion • • • Just-in-Time Quick Response Fast Fashion Information Technology Push vs. Pull Reactive Capacity Fast Fashion Competitors – Forever 21 – Uniqlo – Renner (Brazilian) © Minder Chen, 1993 -2012 - 52 -

Just-In-Time • Zara's factories use sophisticated just-in-time systems, developed in cooperation with Toyota, • Just-In-Time • Zara's factories use sophisticated just-in-time systems, developed in cooperation with Toyota, • that allow the company to customize its processes and exploit innovations. (Flexible Manufacturing) • For example, like Benetton, Zara uses "postponement" • to gain more speed and flexibility, purchasing more than 50% of its fabrics undyed so that it can react faster to midseason color changes. - 53 © Minder Chen, 1993 -2012

Postponement Strategy • Operations reversal at Benetton: Single product Style with 4 colors choices Postponement Strategy • Operations reversal at Benetton: Single product Style with 4 colors choices Zara: Roughly half of the cloth arrives undyed! © Minder Chen, 1993 -2012 - 54 -

Production Planning © Minder Chen, 1993 -2012 2 -55 - Production Planning © Minder Chen, 1993 -2012 2 -55 -

Capacity Utilization Waiting Time • For Faster Response, • Have Extra Capacity on Hand Capacity Utilization Waiting Time • For Faster Response, • Have Extra Capacity on Hand Capacity Utilization © Minder Chen, 1993 -2012 - 56 -

Attributes Competitors Zara New Items Designed 2, 000~4, 000 (H&M, Gap) 30, 000 From Attributes Competitors Zara New Items Designed 2, 000~4, 000 (H&M, Gap) 30, 000 From concepts to products 3~5 months (H&M), 6 months (Gap) , 9 months (others) 15 days Manufacturing No factory (H&M) 60% produced in house Batch size Hugh batch size “everything is the same” (Gap) Small batches “You’ll never end up looking like someone else. ” average markdown ratio approximately 50% 15% (85% full price) # of store visit per year 3 17 Marketing /Revenue ratio 3. 5% 0. 3% Failed product introductions 10% 1% gross margins 37. 5% 56. 8% IT Investment Stores © Minder Chen, 1993 -2012 ¼ of the industry average 3, 076 stores WW with 2, 551 in US (Gap) 3, 900 stores across 70 countries. - 57 -

Zara Global Presence • Zara welcomes shoppers in 78 countries to its network of Zara Global Presence • Zara welcomes shoppers in 78 countries to its network of 1. 557 stores in upscale locations in the world's largest cities. • The retailer's international footprint proves that national borders are no hindrance to a shared fashion culture. © Minder Chen, 1993 -2012 - 58 -

Inditext “There's no such thing as borders when it comes to sharing a single Inditext “There's no such thing as borders when it comes to sharing a single fashion culture. ” © Minder Chen, 1993 -2012 - 59 -

Global Presence Spain: 335 stores (159 with Zara Kids) France: 115 stores (4 with Global Presence Spain: 335 stores (159 with Zara Kids) France: 115 stores (4 with Zara Kids) Italy: 87 stores (12 with Zara Kids) China: 77 stores Japan: 68 stores United Kingdom: 65 stores Germany: 64 stores Portugal: 61 stores (21 with Zara Kids) Mexico: 51 stores Russia: 51 stores Greece: 48 stores (6 with Zara Kids) United States: 48 stores © Minder Chen, 1993 -2012 - 60 -

© Minder Chen, 1993 -2012 - 61 - © Minder Chen, 1993 -2012 - 61 -

© Minder Chen, 1993 -2012 - 62 - © Minder Chen, 1993 -2012 - 62 -

Fifth Avenue Flagship Store • Earlier this year, Inditex spent $324 million on a Fifth Avenue Flagship Store • Earlier this year, Inditex spent $324 million on a New York property slated to become its new global Zara flagship store. The purchase of the National Basketball Association's old store on Fifth Ave. is the country's most expensive realestate transaction, measured in dollars per square foot. • In another recent deal also at 666 Fifth, Japanese clothing retailer Uniqlo agreed to pay $300 million over 15 years, in one of the most expensive leases ever in New York. © Minder Chen, 1993 -2012 - 63 -

Why Going Online? • When the economy was at it’s worst, online retail sales Why Going Online? • When the economy was at it’s worst, online retail sales were the one area that either grew or didn’t suffer as much from the downturn. Not having an e-commerce operation at this point is inexcusable for a global retailer. © Minder Chen, 1993 -2012 - 64 -

© Minder Chen, 1993 -2012 - 65 - © Minder Chen, 1993 -2012 - 65 -

Zara Online Strategy • The bottom line: Inditex is counting on online sales rather Zara Online Strategy • The bottom line: Inditex is counting on online sales rather than store expansion to power sales at its Zara chain and trump rival H&M in the U. S. • Inditex’s annual online sales will be € 1. 4 billion ($2 billion), or 7 percent of group sales by January 2014. • And Gap, which has sold goods online for more than a decade, gets 9% of its sales online (now). Read more: http: //online. wsj. com/article/SB 10001424053111903895904576546651628934210. html#ixzz 1 b. Zd 2 uqx. M © Minder Chen, 1993 -2012 - 66 -

Why Is Zara Late for the E-Commerce Party? • Zara cited sourcing and logistics Why Is Zara Late for the E-Commerce Party? • Zara cited sourcing and logistics for their lack of online presence until now. • The fashion retailer also reported that their clothes sell quickly, making it difficult to offer them online. © Minder Chen, 1993 -2012 - 67 -

Online Start-Up Costs • Online Start-Up Costs • "It basically follows the same model as our regular store expansion, " Mr. Isla says of the online rollout. "For us to enter a new country has a very small cost because, with our twice-a-week delivery model we have few start-up costs. We don't need large logistical infrastructures, marketing departments or big central operations. The model allows us to have a light structure, and that applies to online as well. " Read more: http: //online. wsj. com/article/SB 10001424053111903895904576546651628934210. html#ixzz 1 b. Zbs. Lba. D © Minder Chen, 1993 -2012 - 68 -

Costs of US Online Initiative • Inditex spent € 24 million over the past Costs of US Online Initiative • Inditex spent € 24 million over the past two years in preparation for its online launch in the U. S. and it has high hopes for online demand. • Some 200, 000 people have downloaded the Zara application for Apple Inc. 's i. Phone or i. Pad from the U. S. , according to the company. Read more: http: //online. wsj. com/article/SB 10001424053111903895904576546651628934210. html#ixzz 1 b. Zd. M 1 Bet © Minder Chen, 1993 -2012 - 69 -

http: //www. zara. com/webapp/wcs/sto res/servlet/product/us/en/zara-us. W 2011/119504/605502/STRIPED%2 BSHIRT © Minder Chen, 1993 -2012 - http: //www. zara. com/webapp/wcs/sto res/servlet/product/us/en/zara-us. W 2011/119504/605502/STRIPED%2 BSHIRT © Minder Chen, 1993 -2012 - 70 -

Prada Fancy Technology Use by IDEO http: //www. ted. com/talks/david_kelley_on_human_centered_design. html Around 3: 54 Prada Fancy Technology Use by IDEO http: //www. ted. com/talks/david_kelley_on_human_centered_design. html Around 3: 54 © Minder Chen, 1993 -2012 - 71 -