Zara Case Essay

1988 words - 8 pages

Introduction
Zara, the largest retailer within the Inditex portfolio, has been able to maintain a competitive advantage over its competitors by offering up-to-the-minute fashions in its stores throughout Europe, Asia, the Middle East and the Americas. Zara is the result of a clothing factory integrating forward to take advantage of linkages between manufacturing and retailing. These linkages are facilitated by information technology and Zara has developed a highly automated production and distribution system to service its stores. The information systems within Zara stores are easy to use and stable, but much discussion is taking place regarding whether or not to upgrade them to take advantage of new technologies which could better support the company’s business strategy.

Strengths & Opportunities
1. Strategy: Speed & Style
Zara’s strategy is to deliver up-to-the-minute fashions to its customers who are looking for the latest trends. In order to achieve this goal, all of Zara’s operations are developed around the tenants of speed and decentralized decision-making. All of Zara’s divisions work to decrease the time it takes to bring products from the design table to the sales floor to ensure customers find what they are looking for. By delivering new styles to stores quickly Zara is able to respond rapidly to changes in clothing trends and in the market. This allows the company to spend very little on advertising and still maximize revenue by constantly introducing new styles. This rapid merchandise turnover encourages customers to visit stores frequently as they know there will be new items available and to purchase items they like immediately since they know the offerings will be different the next time they visit.
Speed in design, production, and distribution are enhanced by empowering a number of employees with the authority to make decisions as opposed to all orders being given from the company’s headquarters. Individual store managers choose which items will be sold in their stores. Designers determine what items should be produced based on current styles, while product managers have the authority to transfer merchandise from one store to another if necessary. Together, speed and decentralized decision-making allow Zara to respond to environmental factors at a speed no other major retailer has attained, leading to increased sales for the company.

2. Organizational Structure: IT Embedded
Both Inditex’s Chairman, Amancio Ortega, and its CEO, Jose Maria Castellano Rios a former IT manager, believe that computers and technology are imperative to the execution of the company’s strategy. Inditex does not have a CIO. Instead, a technology steering committee, including Ortega and Castellano Rios, is responsible for initiating new technology initiatives. Even with this high-level attention to the opportunities offered by information systems, no cost/benefit analysis of IT projects is undertaken and there is no formal...

Find Another Essay On Zara Case

Zara Case Analysis

1535 words - 6 pages Zara is a retailing chain of Inditexthat specializes in high-fashion at reasonable prices. In the last 12 months, Inditex’s stock price has increased by 50% despite bearish market conditions. The 50% increase is due to the investor expectations of Inditex’s growth. Inditex’s growth can be contributed to the decisions it has made in creating a vertically integrated centralized process. The centralization of its vertically integrated operations

ZARA case study

1012 words - 4 pages ZARAInternal analysis.Zara's core competence is recognizing and assimilating the continuous changes in fashion. They're very good at this because there's a very good communication within the company. Store managers send information about the customer demands and new fashion trends to the headquarters on a daily basis. So if there's a new trend, Zara is able to adapt their products or design new articles immediately. If a design doesn't sell

Zara: fast fashion

3881 words - 16 pages expansion.Launching store manager training programAccording the case writes, store managers decide which merchandise to order and which to discontinue, coupled with transiting customer data and their opinions to Zara's design, providing potential demand sense for new products. It is store managers' acute observation that enables Zara to decide which items to be removed or replenished. Since store managers are the souls of retailer stores, it is important

ZARA: Fast Fashion

2018 words - 8 pages prototype, would develop the company brand awareness in the new country.In contrast to the advantages of their international expansion policy, the price of ZARA products in USA is more than double same products in Spain ;moreover, as the case stated, what worked with 1000 stores will not work with 2000 stores and the centralized supply chain might collapse or become a real problem . Accordingly, a competition might find a window of opportunity in that

Compare and contrast the supply chain management approaches take by H&M, Benetton and Zara

2717 words - 11 pages to work on products that have similar processing requirements" (Chase et al., 2001, p. 189). In our case of course the role of machines are taken by different tasks of designing, choosing patterns, colour and material; whereas women, men and children's lines have similar processing requirements.Zara's design department is organised differently. As with Benetton and H&M, Zara employs number of designers, market specialists and buyers who are

Zara: Global Expansion

1385 words - 6 pages Zara is one of the world’s largest fashion retailers; it’s a Spanish clothing and accessories retailer. It is the flagship company of Inditex, a holding company which includes seven other brands, and was founded in Artexio, Spain in 1975 by Amanico Ortega and Rosalia Mera. Just this year Forbes named Ortega the 3rd richest man in the world. “Zara contributes about 80% of Inditex's revenues, which have grown by 27% per year on average since 1998

SWOT Analysis: Zara´s Managers

646 words - 3 pages Inditex is the largest fashion retailer in the world, it has seven chains, they are Zara, Pull and Bear, Massioino Dutti, Stradivarius, Bershka Oysha and Uterque. SWOT analysis might help the executive to understand the opportunities and threats in the environment with the strengths and weakness of Inditex; thus help the executive to evaluate existing strategies and formulate the new master strategies (growth strategy, stability strategy and

INDITEX (ZARA) Jordi Llena Vila 90892 Operations Strategy Pär Åhlström

3485 words - 14 pages INDITEX (ZARA) Jordi Llena Vila 90892 Operations Strategy Pär Åhlström Stockholm School of Economics Index Index 2 History and description 2 The resource perspective 3 How does Inditex reach its customers? Different brands 4 Management 5 Marketing 5 Decision Areas 5 Capacity 5 Supply networks 6 Process technology 6 Development and organisation 7 The market perspective 7 Market Requirements 7 Competitors and market positioning 7

fashion trend

1686 words - 7 pages consumers (McAfee, Dessain, & Sjoman, 2007). Consumers are hence able to get product easy and of high quality. Fast fashion has been able to meet the needs of consumers while trying to acquire major merchandize turnover to retailers than local rivals. The Zara case study reported sales $8.15 billion to its competitors Hennes & Mauritz 0f $7.87 billion (Dutta, 2002). This was the consumer’s one stop shop due to the quality products offered both

IT for Fast Fashion Case Study

1823 words - 7 pages IT for Fast Fashion Case StudyZara is a flagship store for the Spanish Inditex Group, one of the largest fashion retail groups worldwide and currently contributes to 65.6% of its sales. The company has 1520 stores (as at end of 2008, including Zara Kids) and opened 159 stores in 2008 (Inditex 2009). Its stores are located in cities across Europe, America and Asia, present in 72 countries, offering up to date trends in international fashion. It

Fast fashion essay

1222 words - 5 pages meet their demand and how it contributes to Zara’s success in particular. The characteristics of fast fashion are as follows: Relatively inexpensive – Fast fashion is inexpensive. “Retailers such as H&M and Zara sell up-to-the minute fashion at low prices”. (Slack, Chambers, Johnston, 2010) This attracts customers into the store and also allows them to see trendy styles of clothing at an affordable price before they

Similar Essays

Strategic Management: Case Zara Essay

864 words - 3 pages first chooseappropriate set of international competitors listed in the case and think about Zara'srelative "operating economics."We use the Business Strategy Diamond model to give an image of Zara's opportunities and threats in the external environment. This model will helps us to exam Zara's strategy with regard to competitors like Gap, H&M and Benetton.-Arenas: in the text is written that Zara chose for areas of production, for women, for men

Zara Fast Fashion Case Essay

2235 words - 9 pages from existing stores to better understand the consumers and dynamics. Zara should use this insight to decide on the most appropriate business model for North America in case of a future expansion. According to the volume it expects from this market, Zara should analyze needs for distribution centers, transportation or production requirements. Inditex should also consider if other Inditex chains can be successful in North America. North America is

Zara Fast Fashion Case Essay

3953 words - 16 pages and fashion accessories through 1,284 stores around the world under many brand names. Zara is an apparel chain owned at operated by the Inditex. It specializes in fast fashion and offers women's, men's and children's fashions at affordable prices.This report analyzes the case Zara: Fast Fashion and the problems associated. The report covers the detailed study of Zara's:•Situational Analysis, which includes factors such as the environment

Zara Case Study

968 words - 4 pages )-the amount earned from an expenditure-of any such effort (i.e., what will we get for our money and how long will it take to receive payback?)3- Designers need to thoroughly test the system before deployment5-The Zara case shows two things - 1. IT can impact every single management discipline and 2. A firm need not be the highest IT spender in its industry to use IT effectively. Provide reasons and examples from the case that show why these two