FIT Analysis
Opportunity – invest heavily in IT to update system and possibly gain functionality; 5 possibilities: 1. Upgrade POS to modern operating system 2. Build in-store networks 3. Build in-store inventory lookup capabilities 4. Build store-to-store inventory lookup capabilities 5. Build online shopping capabilities a. Customers 1. Internal – store managers; want an upgraded system to make ordering, store-to-store exchanges, and inventory easier 2. External – customers; fashion conscious, know Zara inventory turns over rapidly, want continued quickness to market, no significant price increases b. Costs – very low for current IT system, a new investment could cost as much as €43.8 million initially and nearly €340000 annually. See table 1 in Appendix. c. Competition – mainly Gap, H&M, & Benetton (see Table 2 in Appendix for financial comparison) d. Context – international brand with room to grow, particularly outside of Spain
KSF – design/manufacture/deliver fashionable clothes quickly, maintain simplicity and low costs, push decisions out to front line workers
Cash flows – More efficient system could reduce worker-hours needed in stores
Strategy – Begin to develop POS application so that when DOS enabled systems are unavailable Zara will not be shut down
People – this is a good mix of the right people; the fact that Salgado and Sanchez switch sides in the IT investment argument shows their wisdom and commitment to making the right decision a. Xan Salgado Badas – Head of IT b. Bruno Sanchez Ocampo – Technical Lead for POS System c. Jose Maria Castellano Rios – Iditex CEO d. Amancio Ortega – Founder, largest stock holder e. Store Managers – trusted with more responsibility than their contemporaries at competitive stores f. Commercials – Store Product Managers, Designers, Product