Zara Case Paper Analysis

Only available on StudyMode
  • Download(s) : 169
  • Published : December 17, 2012
Open Document
Text Preview
Running head: Zara Case Paper Analysis

1

Zara: IT for Fast Fashion Case Analysis

Sonal Bhagwat
University of Houston-Victoria
MGMT 6352-2011FA-25125
November 2011

Zara Case Paper Analysis

2

Table of Contents:


Abstract

3



Case Description

4



Goals and Strategy

5

-

Speed and Decision-making

5

-

Marketing, Merchandising, and Advertising

6

-

Information Technology

6



Problem Analysis
Firm-based-value chain model

o


Model Application
Implementation Opportunity Analysis

Evaluation of IS Implementation

7
7
7
9
12

-

Tangible Costs Analysis

12

-

Tangible Benefits

13

-

Intangible Costs Analysis

14

-

Intangible Benefits

15

-

Conclusion for Evaluation of IT Implementation

16



Conclusion and Recommendations

16



References

19

Zara Case Paper Analysis

3
Abstract

This case paper presents the business analysis of Zara, the leading and the profitable brand of Inditex. The case paper’s objective is to discuss whether to update the current DOS/IT infrastructure and evaluate the effects of the upgrade. By using the Michael Porter’s value chain analysis, we can understand Zara’s core business model of vertical integration and assess the areas where IS will add value to the system. The case paper also presents the IS implementation opportunities and evaluating the effectiveness of the implementation. The case paper concludes by providing recommendations for updating the current OS along with its advantages.

Zara Case Paper Analysis

4
Case Description

Zara is one of the largest international fashion brands of Inditex. The company first opened in La Coruna in 1975, still lives by the simple idea of Amancio Ortega to link customer demand to manufacturing, and link manufacturing to distribution. The customer is at the heart of the business model. In 1985, Inditex became the holding company atop Zara and other retail chains, and Jose Maria Castellano Rios joined the company. Castellano and Ortega shared the same beliefs that quick response to customers, use of computers, and disintegrated decisionmaking were important to build the business (McAfee, Dessain, & Sjoman, 2007). Inditex operates 1,558 stores in 45 countries out of which 550 stores are a part of Zara chain. Zara generates a major portion of Inditex’s sales accounting for 73.3%. Zara offers a great choice of new style clothes for Men, Women, and Children along with moderate prices every time. The women clothing account for 60% of Zara’s revenue. Zara has developed the business model to sell the garments by following trends and styles, with virtually no advertising and trust the decision of a group of employees called as “commercials” on what clothes should be in stores.

Zara has pioneered the niche market and has presence in all continents: Europe, America, Asia, Middle East, and Africa. Zara’s core business model is vertically integrated, it specializes in speed and efficiency and the fast fashion trend. Zara’s approach to information technology is consistent with its core business model (McAfee et al., 2007). The website www.zara.com serves only as display window and Zara does not use the Internet to make sales. Zara prefers developing applications internally for its use, instead of buying the commercial available software. At the time of the case, the company relies on an out-of-date operating system, the P-O-S (Point of Sale), for its store terminals and has no full-time network in place across the stores. The P-O-S system runs on DOS, which is not supported by Microsoft. As much this system is outdated, it is still easy to maintain and operable and with this Inditex has built an extraordinary well-performing value chain. However, in 2003, Zara’s CEO must decide whether to upgrade the retailer’s present system and risk the reliability with the current system, or continue with the old system that...
tracking img