argin Analysis

$2.$

Analyze Zara$$s upstream activities $($Design$,$ Sourcing & Manufacturing, and Distribution$).$ Can

you graph the linkages among Zara$$s choices about how to compete, particularly ones connected

to its quick$-$response capability, and the ways in which they create competitive advantage? What

does the exercise suggest about such capabilities as bases for competitive advantage?

$3.$ Analyze Zara$$s downstream activities $($Merchandising$,$ Store Operations, and Overall

Management$).$ Can you graph the linkages among Zara$$s choices about how to compete,

particularly ones connected to its quick$-$response capability, and the ways in which they create

competitive advantage? What does the exercise suggest about such capabilities as bases for

competitive advantage?

$4.$ Why might Zara $$fail$?$ How sustainable would you calibrate its competitive advantage as

being relative to the kinds of advantages typically pursues by other apparel retailers? Be sure to

examine both business strategy and corporate strategy.

Amazon $2021$

$1.$ What drove Amazon$$s early success? What did Amazon$$s bookselling model do for the

customers and its cost to serve? Why did Amazon move into so many categories so quickly?

Inditex H&M The Gap Benetton

Operation Margin $21\mathrm{.}7\%$

Net Margin $($ROS$)10\mathrm{.}5\%$

Working

Capital$/$Sales

$0\mathrm{.}6\%$

PPE$/$Sales $41\mathrm{.}1\%$

Asset$/$Sales $80\mathrm{.}2\%$

Asset Turnover $125\%$

ROA $13\mathrm{.}1\%$

Leverage $175\%$

ROE $22\mathrm{.}9\%$

Representative Competitor Zara

Posted Selling Price

$-$ Markdown

$100$

$-$

$100$

$-$

Retail Selling Price

$-$ Manufacturing Costs$/$Selling Price$*$

$=$

$-$

$=$

$-$

Gross Margin

$-$Advertising

$=$

$-$

$=$

$-$

Advertising$-$adjusted Margins $==$