Amancio Ortega is one of the most successful entrepreneurs in the world, growing his clothing manufacturing and fashion company Inditex (owner of Zara boutiques) from zero to over $20 billion in annual revenues. With a personal fortune now in excess of $37 billion, he is the second richest man in Europe and one of the wealthiest in the world. The key driver of Ortega's success, according to professors Karan Girotra and Serguei Netessine, is business model innovation.
Soon after founding his company in the 1970s, Ortega realized that the key to success in his industry was responsiveness and speed instead of low cost productions. He changed his business model to produce his clothing in expensive places that were close to customers, allowing his company to respond quickly to changing tastes. For decades the model was ridiculed by the industry. It is only now that other companies are starting to copy Ortega. Compare the nearly three decades of advantage that Inditex enjoyed to companies like Pfizer (maker of Viagra) and Apple whose revolutionary innovations were copied a few short years (or months) after launching. The key difference is that Inditex chose to innovate its business model while Pfizer and Viagra chose to innovate their products.
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