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ZARA Case Study

By

Chander Shekhar Sibal (WMP 6015)

A Case Study submitted in fulfillment of the assignments for

MIS

WMP 2013

[pic]

Indian Institute of Management, Lucknow

Noida Campus

2011

Zara Case Study

Q. 1. Zara is successful in managing IT. Using your learning’s from the case, explain how Zara is able to get productivity benefits from IT

The firm tripled in size between 1996 and 2000, then skyrocketed from $2.43 billion in 2001 to $13.6 billion in 2007. By August 2008, sales edged ahead of Gap, making Inditex the world’s largest fashion retailer1. While the firm supports eight brands, Zara is unquestionably the firm’s crown jewel and growth engine, accounting for roughly two-thirds of sales2.The blend of technology-enabled strategy that Zara has unleashed seems to break all of the rules in the fashion industry.

a) Efficiency in Design teams

Rather than create trends by pushing new lines via catwalk fashion shows, Zara prefers to follow with designs where there’s evidence of customer demand. Data on what sells and what customers want to see goes directly to “The Cube” in La Coruña, where teams of some 300 designers crank out an astonishing 30,000 items a year.

b) Speed of execution in bringing a new product idea to store & response to change

In the fickle world of fashion, even seemingly well-targeted designs could go out of favor in the months it takes to get plans to contract manufacturers, tool up production, then ship items to warehouses and eventually to retail locations. But getting locally targeted designs quickly onto store shelves is where Zara really excels.

c) Back end IT systems /in house software sytems

The firm is able to be so responsive through a competitor-crushing combination of vertical integration and technology-orchestrated coordination of suppliers, just-in-time

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