Zara It Strategies for Retail

Topics: Retailing, Store manager, Harvard Business School Pages: 8 (2565 words) Published: February 25, 2013
Matteo Fioravanti
Abbey Road - MIB 2013 2355 words

Zara: IT for Fast Fashion

Zara: IT for Fast Fashion

In This case we see the typical problem which affect big Companies : the conflict between old style and new school of thought. We analyze Zara’s information Technology strategies and the diatribe between Salgado, The Head of the Department and Sanchez , his assistant,s concern upgrading the operating system and the implementation of a new IT system to fulfill the needs of a fast growing retail chain. Despite the fact that Zara is over performing in their core business and that they are not showing big problems inside their structure, this shouldn’t be seen as a pretense to dodge updating the Software. Here we see Sanchez’s sight who confide in simplicity due to the success achieved in the past by the business. Although Leonardo Da Vinci as well quoted saying that “ Simplicity is the ultimate Sophistication”, and he made the most influential discoveries on earth, in this story there may be some substance to Salgado’s argument regarding the upgrade of their POS terminal. Before discussing the why of this decision, is important to understand their approach to Information Technology Management. One of the most crucial aspects to ZARA’s I.T. Management was their ‘D.I.Y.’(Do it yourself) method, pictured through the creation of their own applications by the IS Department, a software highly reliable and with low cost maintenance. The benefit of creating tailor-made applications is that all of the functions are very specific to the organization so they can easily respond to fast changing customer demand. I.T. department were likely to familiarize themselves with the processes in a rapid manner and the lack of a Chief Information Officer and no formal budget was justified by the fact that everything was created internally. Essentially this strategy, in addition to ZARA’s number one pillar of no advertising was very cost effective. The question was how to coordinate the fast business growth with a suitable IT system that could sustain the development and improve connectivity and the share of information between the different stores and the Headquarter in La Coruna, Spain. To better understand the content “Nota Bene” that the story is referred to 2003 and is not a nowadays episode.

CONTENT (One page to be organized)
1. 2. 3. 4. 5. 6. 7. 8. Inditex Business Model Situation and case analysis The Value Chain and IS structure The Challenge Information Technology Impact and related risks Recommendations and Solutions References Bibliography

Zara is the most profitable brand of Inditex Group. They produce and sell clothes, shoes, accessories, cosmetics and complements through the Zara concept store in all the continents. The business model is based on short deadlines and on the exceptional ability of managing garments with a continuous turnover of the inventory. The ability to offer reasonable prices mixed with a two/three week replenishment of the collections is an optimal combination to convince people to buy their garments. The reliance given to the Retail Store Managers allow,s the company to anticipate the current fashion trends with a precise grade of accuracy. Large marketing expenses in terms of advertising campaigns and big endorsements are replaced with heavy spending in Retail Stores design and layouts. The Stores are normally placed in the best city centers and are refurbished every four years. As with some retailers, a large component of Zara’s success in the marketplace is heavily reliant on new product.

Matteo Fioravanti


Example of Zara Store in Madrid

Our study is about the clothing industry so as mentioned before it is focused on the taste of customers, an important insight in the Retail sector. This involves the risk of predicting fashion trends with a certain level of accuracy. The IT Structure is an important asset...

References: Connection between the firm, IT infrastructure anvd Business Capabilities (Laudon & Laudon, 2012)
Zara process is established by three mains steps: Ordering, Fulfillment and Design & Manufacturing
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