...Question 1: From an analytical prospective, explain how information systems relate to the way Zara runs its business. What types of systems are the most essential for this company in its current environment? In this new era of globalization, the using of technology has been very common and can be conclude as part of human’s life. In order to survive in today’s challenging business world, every organization has to be confronted with highly competitive pressure to bring out more effectiveness and efficiency when running a business. This case study is about Zara, large international fashion company which known as one of the survivors by successfully overcome the business pressure by implementing new technology system. Zara is known as one of the largest international fashion companies which belong to Inditex, one of the world’s largest distribution groups. This clothing retail group headquartered their first store which located at La Coruna, Spain. By having 531 stores located in 45 countries, Zara carry out their business model by using information system to generate design, production and distribution service through retail network. From production till distribution, Zara choose to manage the entire process by itself because they believe is more efficient and profitable by doing so. It also helps Zara to penetrate fashion trend faster compare to other competitors. Today, Zara works towards their mission by contribute to the sustainable development of society and that of...
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...Running Head: Zara Case Study Zara – IT for Fast Fashion MGN 562 Team: The Change Agents Drejer Simon ID 315273004 Sharnjeet Kaur ID 315271003 Bilal Khalid ID 315276006 JR Rattaporn Srinok ID 315373001 Zertab Quaderi ID 315276001 Stamford International University, Bangkok February 2016 Table of Contents Abstract 3 Company Overview 4 Current Situation 5 Process Performance Analysis 5 Capacity 7 Efficiency 8 Flexibility 11 Quality 11 Operations Strategy Analysis 15 Root Cause Analysis 16 Cost Benefit Analysis 17 Multi Criteria Decision Making 20 Implementation Strategy 20 Recommendations 22 Conclusions 24 List of references 25 Appendix 26 Team Charter 26 Abstract The case study on Zara is set in August 2003 when the head of IT and the technical lead for the POS system are arguing about whether or not to upgrade the operating system of the POS terminals from DOS. The paper examines the operations management of Zara to see whether an updated IT system should be in place or not. It analyses the operations design and strategy of Zara in detail to justify an upgradation of their IT system. It also examines the areas where an updated IT can add value to the operations and ultimately, to the consumers. Several tools and methods have been applied to arrive at a decision. Recommendations and implementation strategy are outlined for better management decision making. Company Overview Inditex, the holding company of Zara, was founded...
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...Zara Case Study Contents 1. Abstract 3 2. Current state 3 3. Problems with current state 4 4. Competitors 5 5. Target State 7 5.1. Considerations 8 6. IT strategy 9 7. Cost Analysis 11 8. Conclusion 11 1. Abstract Zara is one of the largest international fashion companies. It belongs to Inditex, a multinational retailer and manufacturer. At the beginning of 2003, Inditex operated 1,558 stores in 45 countries, of which nearly 550 were part of the Zara chain. The customer is at the heart of their unique business model. Quick and accurate response to shifting consumer demands is the goal of Zara. The main objective of this case paper is to analyze Zara’s current business model, focus on issues they are facing and provide solution to overcome them. This case analysis also provides Zara with suggestions for IT implementation along with its cost analysis and opportunities for further innovation in their business. This analysis gives Zara a pathway to transform from non-IT savvy firm to an IT Savvy firm and help them to be in competitive advantage. 2. Current state * Offline business Zara currently works only with stores and they do not offer online shopping for customers. The strategy to keep offline business working is to face customers with variety of cloths in different colors and designs and try to convince them buy new arrivals. Since the products inside stores change frequently, the chance of selling new products is very high...
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...➢ Major Facts: Zara is a fashion company based in Europe, the case goes over a lot of different areas of the business. Everything from how they operate differently than their competitors, their outdated IT systems, and where they plan to go in the future. The case shows many strategies Zara has taken in order to become successful in Fashion industry, having a customer’s driven process, agility, retail power, and a successful supply chain. As in the case, managing a supply chain in the fashion industry is extremely difficult. Customers’ wants and trends are constantly changing, and suppliers have to be ready for those changes at anytime in order to work with Zara. Zara, one of the brands of Inditex and most profitable, was established in 1975. It has become well known for their fashion designing and manufacturing efficiencies. The company has developed into the leader of highest profit margins comparing to its competitors, also being one of the most famous fashion companies know by consumers. It’s a Spanish based company, manufacturing all of their products in Europe, later distributing them all across the world to their retail stores. Inditex group has set up strategies for Zara to follow when first creating the company, and now with the operations. Stating that “Through Zara’s business model, we aim to contribute to the sustainable development of society and that of the environment with which we interacts”. For each of their retail store the approach has been focused, “at...
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...multinational clothing retailer and manufacturer (Zara, p.1, pp.2). Their largest chain store is Zara, whose POS terminal and business operations were constructed to quickly respond to the changes in customers clothing preference (Zara, p.3, pp.3). The system of operation in use was effective when Zara was a small chain of stores. However, since Zara’s growth and the changes made to the clothing industry, the current operations are no longer effective. The key problems to Zara’s operations are the outdated IT systems, the lack of control that management has over executive decisions and lack of management integration in the IT division of Zara. These problems can hinder the growth of Zara and can prevent it’s expansion, if the technology used by their suppliers/vendors changes or the employees who are the most knowledgeable in the IT department leaves the company. Zara is dependent on the operations of it’s information systems to function on a daily basis and if the system shuts down, Zara would cease operation. The main problem at Zara is the lack of control management has over executive decisions. Each operating unit does not have control over its sector and senior management is taking a hands off approach from the involvement of the company. For example, Bruno Sanchez Ocampo (the lead IT tech) does not want to improve the POS system because he is knowledgeable in its current operations and it works in his opinion (Zara, p.2, pp.2). However, the managers at the retail...
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...Zara: IT for Fast Fashion This case is part of the course Managing in the Information Age (MIA) at Harvard Business School. [pic] Managing in Information Age IT Categories |IT Category |Definition |Example | |Function IT (FIT) |IT that assists execution of discrete function |Simulators | | |or task |Spreadsheets | | | |CAD/CAM software | | | |Statistical software | |Enterprise IT (EIT) |IT that integrates multiple functions by |Enterprise Resource Planning (ERP) systems | | |imposing new work structure |Supply chain management (SCM) systems | | | |Customer Relationship Management (CRM) systems | | | |Sourcing/procurement software ...
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...advantages of ZARA (Inditex) over its main competitor. How sustainable is this advantage? (1,5 pages, 10 points) 2) Assume that ZARA is considering to enter the US market. Please recommend actions for ZARA. Please make clear assumptions when necessary. (1,5 page; 10 points). After reading and analyzing the Zara case we came several conclusions when it comes to Zara’s competitive advantage over its competitors. We understood that Zara is using totally distinctive business model compared to other more traditional fashion retailers. In our opinion there are three most important advantages that Zara has over its competitors. These are : IT Software/internal information flow, Factory locations/Geographic placement, Just in Time approach. We believe that these three factor are the main determinants when it comes to Zara’s strong current position on the market. Below I will go more in detail and explain every single factor individually. Software/internal information flow First factor which gives Zara competitive advantage according to me is their software. The fact that all the software (PDA) used currently by Zara is developed by them gives them huge competitive advantage. Having the software developed internally makes it much more efficient and user friendly because it is compatible with the companies daily operations. Everything starting from the operational procedures, performance measures, and even office and store layouts are designed to make information flow simple...
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...Zara: IT for Fast Fashion [HBR case # 604081] In 2003, Zara's CIO must decide whether to upgrade the retailer's IT infrastructure and capabilities. At the time of the case, the company relies on an out-of-date operating system for its store terminals and has no full-time network in place across stores. Despite these limitations, however, Zara's parent company, Inditex, has built an extraordinarily well-performing value chain that is by far the most responsive in the industry. The case describes this value chain, concentrating on its operations and IT infrastructure. 1. How would you advise Salgado to proceed on the issue of upgrading Zara’s POS systems? I would advise Salgado to upgrade Zara’s POS system. Zara’s applications are written internally and can be adapted for use to another operating system with relative ease. Currently, Zara is running a DOS operating system that is no longer supported by Microsoft and if problems were to arise with the current system, it would be difficult to manage the daily operation effectively particularly because their manufacturing to distribution timelines are fast so any delay in the ordering and replenishment process would interrupt sales. Upgrading the operating system would allow Zara to be able to take advantage of future IT developments which would give faster and greater access to data to make real time decisions. Also, upgrading the POS terminal hardware would give store managers a larger screen, keyboard and mouse to place...
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...Zara: IT for Fast Fashion This case is part of the course Managing in the Information Age (MIA) at Harvard Business School. [pic] Managing in Information Age IT Categories |IT Category |Definition |Example | |Function IT (FIT) |IT that assists execution of discrete function |Simulators | | |or task |Spreadsheets | | | |CAD/CAM software | | | |Statistical software | |Enterprise IT (EIT) |IT that integrates multiple functions by |Enterprise Resource Planning (ERP) systems | | |imposing new work structure |Supply chain management (SCM) systems | | | |Customer Relationship Management (CRM) systems | | | |Sourcing/procurement software ...
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...Executive Summery The Zara case study is a case of the fundamental of whether or not to upgrade an IT system which already works, in this case a POS operating system that uses DOS, to more modern operating systems that includes more functionality to meet new demands. Zara is a chain fashion store around Europe, Middle East, Africa, and South America that was founded by Amancio Ortega, in 1975. The first store and main headquarters was found in La Cournia, Spain. Mr. Ortega believed and implemented his business model that: Retailing and manufacturing needed to be closely linked. This created the backbone for Zara’s everyday functionality to have all the stores communicate with the main distributors and distribution centers (DCs) which in turn communicated directly to the manufactures. As a result, supply was meet with demand with ease and little latency. This was all made possible through the use of technology and Zara’s IT department. Salgado Badas, the head of the IT, along with Bruno Sanchez Ocampo, were the main decision makers and brains behind the IT of Zara. For the past decade, Zara has implemented POS systems in each store that would have a direct connection via modem to the main headquarters in La Coruna. Managers on a daily basis transmit comprehensive sales information and other data back to La Coruna. In 2003, PDA’s were also used for ordering and also for tasks such as handling garment returns to DCs and transmitting information from headquarters to all...
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...Zara Case Study 1. Case Summary The Zara case study is a case of the fundamental of whether or not to upgrade an IT system which already works, in this case a POS operating system that uses DOS, to more modern operating systems that includes more functionality to meet new demands. Zara is a chain fashion store around Europe, Middle East, Africa, and South America that was founded by Amancio Ortega, in 1975. The first store and main headquarters was found in La Cournia, Spain. Mr. Ortega believed and implemented his business model that: Retailing and manufacturing needed to be closely linked. This created the backbone for Zara’s everyday functionality to have all the stores communicate with the main distributors and distribution centers (DCs) which in turn communicated directly to the manufactures. As a result, supply was meet with demand with ease and little latency. This was all made possible through the use of technology and Zara’s IT department. Salgado Badas, the head of the IT, along with Bruno Sanchez Ocampo, were the main decision makers and brains behind the IT of Zara. For the past decade, Zara has implemented POS systems in each store that would have a direct connection via modem to the main headquarters in La Coruna. Managers on a daily basis transmit comprehensive sales information and other data back to La Coruna. In 2003, PDA’s were also used for ordering and also for tasks such as handling garment returns to DCs and transmitting...
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...1. Inditex/Zara history (Explain) Amancio Ortega Gaono began Inditex as a way to bring high fashion apparel to the market at an affordable price. After years working in the apparel retail industry in la Coruña, Spain, Ortega left his job in the early 1960’s to being manufacturing trendy designers pieces in cheaper materials and selling these items to local shops. In 1975, Ortega opened his first retail store, Zara, drawn by its inexpensive, fashionable merchandise, and Ortega expanded the Zara chain quickly. 1980’s Ortega joined with computer expert Jose Maria Castellano to design a highly responsive supply chin that could quickly produce the latest fashions. A team of designers would replicate popular items, nearby factories would produce them, and they would be shipped from a central warehouse to stores. In 1985’s, Ortega restructure the company and named it Industria de Diseño Textil S.A., o Inditex. In 1990’s, Inditex expanded internationally and diversified its brand portfolio. Zara had added childrenswear, and four new brands had been added to the portfolio; Pull & Bear, Massimo Dutti, Bershka and Stradivarius. 2. How important is Zara for Inditex group internationalization process? Explain and make comments Mainly, Zara is the first brand that Inditex had, it have been successfully accepted into the market in different countries and provide a huge opportunities to Inditex to grow up continuously. The limited market growth opportunities at home was the...
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...PRACTICES OF ZARA] August 31, 2009 INSTITUTE OF MANAGEMENT TECHNOLOGY, NAGPUR PGDM 2008-2010 SUPPLY CHAIN MANAGEMENT Project Report “Supply chain practices of Zara” Course Facilitator: Prof. Krishnamurthy Venkatramanan Submitted by: Nadeshwar Mukherjee (08FT040) Nandi Ananya Sujit (08HR031) Sorubh Janmeja (08HR094) Rahul Mohata (08IT028) Sunita Rani (08IT039) Prajakta Shinde (08IT057) 1 [SUPPLY CHAIN PRACTICES OF ZARA] August 31, 2009 ACKNOWLEDGMENT This report on “Supply chain practices of Zara” would never have been completed without the support provided by our course facilitator, Prof. Krishnamurthy Venkatramanan. Moreover, we are highly indebted by the internet facilities provided by the members if IT lab. Project Group PGDM 2008-2010 2 [SUPPLY CHAIN PRACTICES OF ZARA] August 31, 2009 TABLE OF CONTENTS SL.NO. PARTICULARS PAGE NO. 1 2 3 4 5 6 7 8 9 10 11 12 Acknowledgement Executive summary Zara – Company Profile Fashion Industry – Overview Fashion Industry – Growth Drivers Zara – Customer & Product Mapping Zara’s key factors of success or winning formulae Zara – Logistics & Supply Chain Is Zara’s competitive advantage sustainable? Learning Zara – In Sum Bibliography 2 4 5 5 6 7 10 12 19 22 22 23 3 [SUPPLY CHAIN PRACTICES OF ZARA] August 31, 2009 EXECUTIVE SUMMARY This project aims at understanding the supply chain practices followed by the fast fashion collection manufacturing company Zara, Spain. It takes...
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...Study – Zara Abstract The competition of current clothing industry is very fierce and Zara has many competitive advantages in this competition. This paper will analyze on about how the information technology help Zara to make decisions and make their performance more speed. First, a case review from Harvard Business Review will be covered in the introduction to show an overview of current Zara’s business model. Second is the Michael Porter’s model analysis based on Zara that including three generic strategies and five forces. Third, some of IT applications are really help the Zara to make their business more efficient, the applications will be applied in the Enterprise Resource Planning (ERP), Supply Chain Management (SCM) will emphasize a speed supply chain for Zara, and Customer Relationship Management (CRM). Finally is about the relationship between Zara and Peter Drucker’s theory, Zara and Andrew McAfee’s theory, Zara and Hey’s theory. The last part will conclude where is Zara today and make brief recommendations. Table of Contents Introduction 4 Zara and Michael Porter’s Model 5 Generic Competitive Strategies Analysis for Zara 5 Five Forces Analysis for Zara 6 Suppliers Bargaining Power 6 Buyer Bargaining Power 7 Threat of New Entrants 7 Threat of Substitute 8 Industrial Competitors 9 The Value Chain of Zara 10 Enterprise Resource Planning (ERP) 11 Supply Chain Management (SCM) 11 Customer Relationship Management (CRM) 13 Zara and Peter...
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...Session Three Vertical Integration and Outsourcing Zara Created by: Brenda Dyck 1> As Mr. Salgado, what will you do concerning the issue of upgrading the POS terminal? Will you upgrade to a modern operating system? Should the POS applications be rewritten to include any additional functionality? If so, what functionality? Response: Yes, I would upgrade both the POS terminal and modernize the operating system. With Dos being outdated and no longer being supported by the IT industry Zara has an unnecessary business risk. Zara supports the IT requirements with an in-house team, they are supporting an archaic system which limits their ability to be proactive. Should the system go down and the in-house team determines that either the current system is not viable or is to expense to maintain Zara may be left limping along with the old system while the IT department focuses on the change over to a new system. This risk can be mitigated by bringing in a new operation system and via a staged implementation process upgrading the POS system. I would also look into upgrading the system to include live inventory and update the currently ordering process. I believe their “just in time” operation would benefit from the Corporate Office having the ability to actively move product to the stores. The managers currently download sales information from their PDA’s, place the information on a floppy disk then upload this information via a modem nightly. This process along with the...
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