What was the signficance of the Industria de Diseño Textil S.A. (or Inditex Group) in the textil industry?

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M.P. Ossa | College Teacher | (Level 1) Distinguished Educator

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Industria de Diseño Textil, S.A. is a Spanish manufacturer of textiles based in Galicia. Its founder is a world-class mogul named Armancio Ortega Gaona, who used his vast fortune to design a formula for production that confections clothing much faster, much easier, and with the highest standards of quality. So much quality indeed, that it serves as a study in business colleges everywhere since its business model has produced a never-before seen 5,000 stores world-wide. The secret behind the model is the that Ortega Gaona is able to provide the latest, most exact technology, and lots of it, due to his being able to fund the industry 200%. 

The large amount of stores provide employment to hundreds of thousands of people who avidly enjoy the use of the new technologies, and who share the same love for fashion that the business model demands from its employees. 

With the implementation of the Industry's first store, Zara, the corporation utilized a vertical model of sales. This meant that the industry produced, sold, and obtained full earnings from the clothing made by their own machinery. The business model for Zara, however, was different than other stores of the time: it catered for young college students who had limited funds to spend on clothes, but who were preoccupied with the latest fashions. Zara, produced by its parent manufacturer Inditex, had the luxury of producing clothing that met the standards of current fashion in terms of colors, styles, and textiles, but the ease of production made it possible for the store to sell at a much cheaper price than the competitor stores. As a result, Zara became the absolute best-selling store of its kind, bringing profits consistently and prompting the opening of yet more stores.

As of 2014, you can find Zara, and the multiple additional brand names that have been created throughout the world in platforms that include countries in every single continent.  It is the combination of the business model, the appropriate funding, the competitive plan, the product offering, and the initial audience that it attracted what makes Inditex a business model that is studied at the college level. 

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