Q 1. What are the unique features of Zara's business model? Zara is one of six retail chains owned by Spain's Inditex (Industria de Diseilo Textil) that designs, produces and sells clothing, footwear and accessories for women, men and children through Zara and five other chains worldwide. The traditional global apparel chain has been characterized as a prototypical example of a shopper-driven global chain, where profits are derived from "unique, high-quality combinations." -value research, design, sales, marketing and financial services that enable retailers, brand marketers and brand manufacturers to act as strategic intermediaries in connecting overseas factories with markets. Apparel production is generally fragmented with individual manufacturing companies employing on average only a few dozen people, although internationally traded manufacturing, in particular, can be characterized by multi-tiered production chains comprising up to hundreds of scattered companies in dozens of countries. About 30% of global clothing production was exported, with developing countries generating an unusually large share, about half, of all exports. Trading companies have traditionally played the primary role in orchestrating the physical flows of apparel from factories in exporting countries to retailers in importing countries. Regardless of whether they internalized most cross-border functions, retailers played a dominant role in shaping imports in developed countries: thus, their direct imports accounted for half of all clothing imports in Western Europe. Retail operations themselves have remained quite local: in 2000 the top 10 global retailers operated on average in 10 countries. Compared to this baseline, apparel retail was relative… “grey” fabrics instead of dyed/ready-to-use fabrics. They are also clear about the target market and position, they are not fashion trendsetters but "copycats" as some critics have labeled them, which reduces the risk of the products as well as access to different markets to some extent. As long as the target market and product philosophy remain the same, considering the convergence of fashion cultures around the world, the model is sustainable. This model, however, cannot allow them the high growth rates they seem to have enjoyed for a long time. Risks to their growth include, among other factors, the euro's upward trend against the dollar making costs and prices higher for much of the dollar-bound world. Competitor responses and their dominance in attractive markets such as the United States are also hindering factors.