Case Study: Zara IT For Fast Fashion

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Team 1: Daniel Kaseumsouk, Rishi Gurung, Savouth Seng, Dev Shrestha, Soukry SopCase 3: Zara IT for Fast Fashion11. How would you advise Salgado to proceed on the issue of upgrading Zara’s POS systems?Salgado should be more open-minded when evaluating a newer POS system. Store employees have expressed frustrations with the current process. For instance, they are unable to determine if a garment is in stock without manually sifting through merchandise. Zara should provide employees the ability to review inventory balances in their stores and other stores. As a result, employees will have a better understanding of stock and direct customers to different stores if apparel is available elsewhere. Salgado needs to consider the investment
Then, Salgado can examine first-hand if upgrading the POS machines would be a strategic expense. This would eliminate the fear of damaging the current POS process.Additionally, in-store networks should be built within Zara stores. Currently, the POS terminals are disjointed, and employees input floppy disk on each machine to finalize total sales. This tedious design is replaceable by installing wireless networks, which are cheaper than the current method. Taking this approach, Zara would eliminate the necessity of storing data on floppy disks, and save money in operation overhead. 2. What is Zara’s “business model?” How is it different from the business model of other larger clothing retailers? What are the weaknesses, if any do you see within this business model? Is it scalable? Zara’s business model is to associate customer demand with manufacturing and distribution. In other words, retailing and manufacturing systems need to economically work together. Zara is reliant on building nimble processes to swiftly respond to changing customer demands.One notable difference with Zara is their lack of investments in marketing. Large retailers often invest 3% - 4% of their revenue to marketing strategies. In contrast, Zara’s marketing projects
One important aspect is Zara’s preference to create their own software applications. Zara is a global business, which needs to follow numerous regulations associated in different countries. Consequently, the IT team would create software applications to remain in compliance worldwide. Zara is not identical to their competitors as discussed in question two. Therefore, traditional commercial software would not align to their business processes. The IT department at Zara also built the applications that supports fulfillment, ordering, and manufacturing.This approach is applicable to other businesses and has been successful. For instance, Amazons entire networking infrastructure is built by their Amazon Web Services (AWS) team. Amazon has their own way of handling market change, and can meet consumer demand with haste due to keeping IT in-house. With customization, companies are better able to align applications with their business objectives. Hence, full utilization of their internal solutions enables maximum efficiency. 5. What current or potential weaknesses do you see in Zara’s IT infrastructure and IT strategy?POS terminals operate on Microsoft DOS, which is no longer supported as of 2003. This weakness exposes security vulnerabilities within Zara’s POS system.