Editor’s note: This article was first published in July 2010; figures such as Amancio Ortega’s fortune of 21.5 billion euros, Inditex’s presence in 70 countries and its list of brands are from that year. Uterqüe has since been folded into Massimo Dutti.
How can anyone know the secret of Inditex when Amancio Ortega is a reserved man who does not give interviews? Amancio Ortega is the antithesis of the successful businessman. That is why I love him, and unless Amancio Ortega himself says otherwise, we have looked at a few facts that we believe are what led the creator of Zara to success.
1. Amancio Ortega is a shy man: At first sight this breaks with the usual idea of a business owner, although his shyness has made him a very simple man who likes anonymity. This way of being has made him a self-made man. He has not had a mentor. In other articles we said that having a mentor was important to becoming a successful entrepreneur; at the same time, not having one has meant that he is not surrounded by a circle that is often corrupted by the hunger for power. He has had his own ideas, based on discretion.
2. Very little advertising. Once he was well positioned, he did not run big advertising campaigns, so the money not spent on advertising was used to acquire other companies and strengthen his group even further.
3. The Art of War: I don’t know whether Amancio has read The Art of War, but he has applied it to his business quite well. Before his competitors knew about him, Inditex was already established in the market. He came in slowly, laying foundations. By the time his enemy saw him, it was already surrounded.
4. Price, fashion, variety and quality. Inditex Group clothing is of good quality and well priced. It does not have big-name designers, but it has managed to create a wide range of styles and sizes, without limiting its market to 90-60-90 figures (the supposedly ideal bust, waist and hip measurements in centimetres). Older people can dress in a modern way, and young people can be fashionable at a price that, in times of crisis, is very welcome.
5. Business diversification: When his advisers asked him to concentrate on his Zara brand, Amancio Ortega once again ignored the guidelines of the big businessmen and took a risk, following his passion. Why have a single brand in many cities when you can have four brands on the same street in the same city? He was right.
6. A business system: Extremely important for growth. He developed his franchise system, which is what allows him to be present in 70 countries around the world. He did not develop his franchise system for a single brand. He did it for all of them: Zara, P&B, Oysho, Bershka, Zara Home, Uterqüe, Stradivarius and Massimo Dutti.
7. His motto as a businessman: Hire slowly, fire fast. You have to be careful when hiring people. You have to study what that person can contribute, whether they are really needed and whether their work will be profitable. On the other hand, when a person contributes nothing or simply causes you problems, let them go as soon as possible, before they tarnish the reputation of a company or a team.
8. Manufacturing: Here I am sticking my neck out, but I could say almost with complete certainty that, having reached this level of success, the Inditex Group can no longer keep making its entire fashion range itself, so it will have turned to large factories to take the weight of manufacturing off its shoulders. Even so, it will keep making some lines itself. Outsourcing manufacturing is a smart move for a business owner who wants to cut costs.
What is clear is that Mr Amancio Ortega is a businessman worthy of admiration. He started from scratch and has amassed a huge fortune of 21.5 billion euros. He has never stopped being a simple, humble person. That is why, if there is a God up there, he has surely helped him stay focused, because as a businessman he is a figure to follow and as a person he deserves admiration.
Congratulations, well done, and every success in business. Don’t change, Mr Ortega.
Further reading
- 5 ways to grow your business
- Steve Jobs’s success: the early days of Apple
- Why new businesses fail
- The entrepreneur’s mindset: Donald Trump
- Common mistakes made by Spanish business owners
Featured image: Kleon3, CC BY-SA 4.0, via Wikimedia Commons.
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