Case Corporate Excellence Spain’s fast fashion retailer Zara and its owner Inditex Group have revolutionised the industry, Zara became one of the few Spanish brands recognised globally. But is it a socially responsible brand? Implementing CSR means integrating social, labour and human rights concerns into the management of the company in such a way that the Company’s policies, strategies, procedures and business models are developed in line with these concerns. In the case of Zara, the CSR strategy should provide an answer to the following important question: what kind of society do we want to build and what is the role of companies in this society?

1. Cases
Strategy Documents
C02/2011
Public Affairs
Zara: Managing chain of
value and driving CSR
with consumers
The fast fashion Spanish company Zara and its Inditex Group has become a
milestone after revolutionizing its sector and has succeeded in becoming one of
the few brands in the country which stands among the best in class in the world
but, is it a responsible brand, has it been a pioneer in the control of the supply
chain or in the establishment of the ecological label?
There are several consumer trends in recent Consumers, in the opinion of Jose Luis Nueno,
years which are especially influencing in a special professor at the Marketing Department of IESE, ask
manner the relationship that companies establish companies to collaborate in the solution of social
with their stakeholders, especially with their problems which, they consider, governments can
consumers and clients: no longer solve and, many of them, do not change
their attitude nor their actions in relation to how
• Convergence of middle class: consumer expect them to.
exponential population growth and
narrowing of social classes. What is Zara’s secret
• Low cost/free era: price is a Zara’s strategy has always been to drive the creation
key competitive factor. of value for clients. Today it is one of the most
• Changes in behavior: adolescents are profitable fashion businesses in the world. The
those who do not work yet, although leading fashion brand of Inditex Group opened
they are more than 25 or 30 years old. its first store in La Coruna in 1975 and began by
• Sustainability: different use of natural, human, designing and selling dressing gowns to be worn at
social, financial and productive resources. home. Today, there are Zara stores in international
cities such as New York, Paris, Tokio or Buenos
These trends are fixing FMCG brands behavior in Aires with a total of nearly five thousand. National
the market, but especially this last one has forced barriers are not an obstacle for a globalized fashion
companies to review their corporate policies, to culture such as Zara’s but, how did they achieve it?
reconsider the way in which they engage with their What is their secret?
suppliers (a common source of problems for global
brands, as in the famous cases of Nike, Nestle or Zara is a brand which sells three types of fashion:
Cargil) and, above all, with their clients. basic, fast and seasonal. The model, actually, is based
Document prepared by Corporate Excellence with reference to, among other sources, the intervention of Jose Luis Nueno (professor in
the Marketing Department at IESE) during the sessions of the Executive Education Program “Making Social Responsibility Work: The
Cornerstone of Sustainable Business” organized by the IESE Business School in Barcelona in July 2011.

2. Managing chain of on attracting fashion traffic with copied designs Zara: Business Model
value and driving placed on the market in a very short time, in order
CSR with consumers:
the case study of Zara to sell fundamentally, basic and seasonal fashion.
Young
customers Global
Inditex was one of the first manufacturers in the world Mobility reports
which implemented in integrally the concept of daily
vertical integration, based on logistics and the whole No
Innovation advertising,
of the operation. Most of the production is carried in product Zara presence at
delivery key places
out in it completely automated factories and the
tailoring is subcontracted to independent workshops, Good
Causes
which allows for great flexibility to increase or reduce Quality /
new trends
Reasonable Little in fashion
production according to demand. or no
stock
‘Consumers ask companies Source: Knowledge Management, 2010.
to collaborate in the solution
of social problems which, in customers, something that does not seem very
they consider, governments responsible? Can its main social contribution be
limited to maintenance of its immediate surrounding,
can no longer solve.’ its community, jobs created and a type of determined
professionals that would not have otherwise existed?
The stores are located in city center streets, are
owned by the company, thereby having a total The main milestones in the implementation of CSR
control on its image and sales data. The sores are the in Inditex are as follows:
best display and advert for Zara, its brand image is
its store. Its information is permanently transmitted • 1995: establishment of an environmentally
to design teams and the stores regularly receive friendly policy commitment and creation of
consignments of garments in a short space of time, a specific area for the CSR management.
speeding up the renewal of stock. The majority of • 1996-1998: first plans for energy efficiency
models (about 20,000 a year) are in the market and cogeneration plant put into operation.
no more then two weeks, in that way consumers • 1999: plans for emission control,
purchase while stocks last. dumping and waste.
• 2001: internal code of conduct centered on
The key of Zara’s success is, therefore, to have at
responsibility towards employees, partners,
its disposal a system of rapid response, a leading
suppliers and society, and the first Spanish
edge technology, to have great experience at the
company to sign the Global Compact.
point of sale, anticipate the competition, neutralize
the impact of the changes on consumers which • 2002: admission to the Dow Jones
we described at the beginning and, above all, the Sustainability Index and GRI adoption.
systemic nature of its competitive advantage: its
way of operating and working is the advantage The company uses, in this sense, a triple system
itself, therefore, the most difficult to copy. to manage the sustainability and responsibility of
its business model, following the traceability of its
From being a company of accessible fashion in the vertical and horizontal integration model form its
70s, it became a disintermediated company in the origin to the final presentation to clients, what is
80s, a quick company in the 90s and in search of known as the 3 pillars of responsible behavior in the
sustainability in 2000. How does it try to achieve it, production chain:
considering its model and its presence in so many
countries with such a significant pressure in the 1. The DNA of its offices: tied to its employees
market and on its clients? (legality, respect and diversity).
2. The DNA of its factories: tied to its suppliers
Business model Young clients Daily world reports and business partners (transparency, legality
No advertisement, presence in key placements and traceability).
Provokes new trends in fashion Little or no stock 3. The DNA of its stores: tied to its clients (quality,
Good price/quality relationship Innovation in security and health).
products delivery Mobility
Zara has achieved three great milestones in
search for a management model and the most
Zara’s socially responsible policy
sustainable business:
How do you combine a business model based on
selling the maximum amount and producing as
1. Design of the business: creation of
close as possible to the tastes of consumers, to the
value for consumers, for society and
sales needs? Doesn’t this provoke overconsumption
Cases 2

3. Managing chain of Inditex Sustainability Model There are three ways to recognize ecological
value and driving clothing using environment labels which certify
CSR with consumers:
the case study of Zara that the textile products and the treatment used
ar Cle
o We ar t
o are nature-friendly:
ar t We
ar
Cle DNA
TE
RA 1. European Union green ecological label: applied
r
wea
O
Frameemen
Agr
RP
s
to all textile products except wall and
er
su
ar to
m
ewo t
pp
CO
onduct
sto
fC
lie
apartment coverings.
Cle
cu
rs
rk
Code o
Company
2. “Made in Green” stamp: certifies that the
tegy l
products do not contain harmful substances
Stra menta
Res ractice
P
pon s
ty
and that environment and labor rights have
sta
cie
iron
ff
so
sibl
Env
been respected.
e
UN
I
AgrFramew ial 3. Oeko-Tex Standard 100 badge: guarantees the
eem ork Soc ment
ent
invest absence of harmful substances in textile products
during their entire transformation process.
Source: Zara, 2010.
Zara, for its part, began to include some years ago in
its collections items that had been made from raw
especially for the community. materials cultivated without pesticides or chemical
2. Operations: control of suppliers’ agents and entire collections made of sustainable
responsible policies. clothing, with more then 15 million items of clothing
3. Logistics: sustainable mobility plans manufactured worldwide in 2006, and it is developing
following the principles of Kioto. a project for ecological shoe design, in line with what
4. Sales: teaching for a more responsible Camper, another Spanish company, is also doing.
way of consumption.
To end this section, one must highlight the task ‘The objective of green
developed by Inditex in the permanent control of label is to analyze the
its supply chain, specified in its Code of Conduct for
Manufacturers and External Workshops, structured lifecycle to understand the
around respect, control or eradication of 10 key points: impact from the cultivation
1. Forced labor. of raw materials and the
2. Child labor. design, to the manufacture
3. Discrimination.
4. Freedom of association and collective bargaining. and final recycling.’
5. Abuse or inhuman treatment.
The objective, ultimately, is to analyze the
6. Security and hygiene.
entire lifecycle of the product to understand the
7. Payment of salary.
environmental impact which Zara has from the
8. Working hours.
cultivation of raw materials and the design, to the
9. Environmental commitment.
manufacture and final recycling, looking for an
10. Regular work.
approach to sustainability centered on the client and
educating new consumers (especially in emerging
The green label and care markets) to consume in a different manner than until
for the environment now in the West.
In relation to the consumer and the tractor effect that
it can exert so that the entire supply chain applies Conclusions: to integrate CSR
to the maximum extent and with the maximum management in the business model
attention to detail the sustainable principles that Managing Corporate Social Responsibility entails
form part of CSR, Zara has incorporated on the label integrating social, labor and human rights concerns
of its products the ecological information about its within companies management, giving rise to
manufacture, the materials used and what type of policies, strategies, procedures and business models
treatments applied, in line with what retail stores which satisfy consumers, as in Zara’s case, because in
had already carried out also with clothing, but going the end CSR has to answer an important question:
further in order to achieve something that until now what type of society do we want to build and what
seemed impossible: being fashionable without giving role do companies play in it?
up respect for environment. That is the slogan of
ecological clothing.
Cases 3

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