20th April 2012
Body – 2180 words
Total – 3052 words
ITM Report on Zara & Charles Schwab Corporation
HULT International Business School – Pr. R. Gruenbaum Year 2011-2012
IT has become a crucial area to consider when developing a business. IT systems and applications need to evolve, be adapted and updated on a regular basis in order for a company to maintain its competitive advantage. Many companies, when on the brink of change, hesitate and find it difficult to make a decision with regard to IT systems and applications. Reasons could be the cost of the investment or the support it would need in the future. On the other hand, maintaining the status quo situation can put a company’s competitive advantage at risk as well as its reputation.
Zara and Schwab are companies facing those dilemmas.
This report intends to identify, with models at hand, the current situation and focus of each company and the role of IT in those organisations respectively. This analysis will enable the key issues to appear more clearly and to suggest solutions that are in line with each company’s focus, direction and orientation.
The models used are:
•The Value Disciplines by Treacy and Wiersema (1993)
•The IO Maturity Model by Marchand, Kettinger & Rollins (2001) •The 5-Levels of IT-Enabled Business Transformation by Venkatraman (1994)
Value DisciplineOperational ExcellenceProduct Leadership
IO MaturityWeak – Low integration between shop managers information and with headquartersStrong. Though the role of Information might be too central, IT and IS dominating Business strategy. Level of TransformationSituation: Localised exploitation
Goal: Internal IntegrationSituation: Business Network Redesign Goal: Business Scope Redefinition
Zara should upgrade its POS, abandoning DOS, which is no longer supported by Microsoft. The company should adopt a system enabling the shop managers to have access to an interactive platform for their own store. Moreover, the application used should allow managers to transfer data and communicate to one another.
Schwab’s best bet is to redefine their client segmentation, then target new and promising segments such as young and low budget customers. Suggestions include a website livened up by Facebook, Twitter, service via Skype, Crowdfunding etc.
Table of content
1. Introduction 4
2. Current situation and focus 5
3. The role of IT in the organisation 6
4. The Key Issues & Recommendations 7
5. Conclusion 8
Be it for strategic reasons such as maintaining competitive advantage or for productivity and efficiency purposes, IT has become indispensable for today’s companies to grow and embrace success in an ever changing world.
Internet, Cloud computing, crowdsourcing, crowdfunding, social medias are technological feats that have drastically transformed the way people organise themselves, communicate and interact. With these constantly developing technologies, organisations need to be flexible and ready to update or change their systems in order to keep on track with the evolution and competition. Moreover, the choice available to companies is tremendous and can be misleading. Although well managed IT can sometimes bring companies two steps ahead from their competitors, it can also be detrimental to an organisation whose choice was not sensible enough to comply with the already existing systems. IT solutions require substantial investment and therefore needs to be considered wisely when change is required.
Zara, a Spanish retail company owned by Inditex, is present in many countries across the world. The famous brand has...