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Inditex: Outsourcing in Tanger Case Solution & Answer

Inditex: Outsourcing in Tanger Case Solution 

Question 1

Background

The company began its operations through the concept of fashion designing instead of long-lasting garments and provided a wide range of options at reasonable rates. Zara reached excellence by supplying apparel at affordable rates at first, and then slowly improved and matched the quality of today’s renowned brands. Inditex group is the founder of several retail brands. It became a retail shop and clothing distribution firm at average prices. It kept on exploring from1980 to 2005, after which it opened a chain of stores and started outsourcing, alongside which it also supplied clothes. Following these operations, the company became a certified producers and had production units in different countries throughout the world.

Inditex started its operations in 1963, and in 1975; it initiated the ZARA brand. After few years, in 1988, the company started expanding internationally and opened stores in various-countries. In the year 1990; the company started acquiring subsidiaries and further expanded its business and introduced new collections. In 2001, the company became public-ally traded. After that, in the year 2008,new accessories brands were launched by inditex and their 3 stores were opened. In the same year their stores count reached to 4000.

Problems

After the company expanded; problems started taking place due to the huge distributions. The company’s image started to get affected in the market due to the labor issues, economic issues for employees and on social grounds. The company focused significantly on its CSR activities and tried to adhere to the values and culture. Along with that, several NGOs started looking into textile sectors for their responsibilities and the company had to face this challenge as well. Because of being clouded with numerous issues and accusations; the company had to face media as well. Additionally, the company also had deficiencies in fulfilling the labors’rights in its Moroccan management.

Question 2

The stakeholder’s of the company are its employees, customers, supplier and investors. The first stakeholders of any company are its owners they start the business and after them the employees of the company are the ones who are the key to make the business successful. In the case of inditex the owner was the one who always worked from behind and never came in public and the employees are the ones who took this company to new heights by expanding it. Employees of the company are the main reason for attracting the customers and in case of inditex the company’s profitability has significantly increase which shows the brand loyalty from customer’s side. Along with that one of the investors namedSETEM an NGO purchased the company’s shares and attended the shareholders’ meeting. SETEMasked questioned regarding the company’s ethical practices, labor laws, buying and selling practices and management, following which the NGO stared a cleanup campaign and questioned the company’s accountability.

The relationship of inditex with its stakeholder’s are satisfactory and they are taking other measures to adopt some CSR activities so that their relations further strengthens with their business partners and other stakeholder’s. The company tried a lot to adopt CSR activities and make get rid of the NGO’s complaint but after all the efforts SETEM did not understand……………….

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