ZARA+Memo

- ** Identify what numbers to look at – seems looking at stock returns, income statements and ROA/ROE would be a starting point ** - ** What resources to use – which databases we use should be identified and agreed upon ** - ** Companies for comparison from reading are: ** - ** Gap ** - ** Hennes and Mauritz ** - ** Benetton **
 * [[file:Key Info on Zara - Derived from Inditex Group Website.msg]]Zara Assignment **
 * __For the memo:__**
 * 1) 1. Compare several international competitors listed in the case with Inditex's financial results. What do these comparisons indicate about Inditex's relative operating economics?

2. How specifically do the distinctive features of Zara's business model affect its operating margins?

- ** Identify what is distinctive about Zara’s model? Design focus, vertical integration, international scope ** - ** What is Zara’s operating margins? Let’s discuss methodology for this as group ** - ** How does Zara compare in terms of operating margins with other comparison companies? Again, let’s discuss methodology for this as group **

Specifically, compare Zara with an average retailer with similar posted prices. In order to express all advantages/disadvantages on a common basis, you may find it convenient to assume that, on average, retail selling prices are about twice as high as manufacturers' selling prices. (For this analysis, begin by assuming an original posted selling price of $100 for an item at both Zara and a representative competitor. Then, determine the ultimate margins on that good for both firms).