Zara's Supply Chain Managment
Zara: IT for Fast Fashion | Individual Case Essay | | BUS 510 Management Information Systems Dr. Y. K. Mortagy | | Mengyang Chen | Fall 2012 | |
Table of Contents Abstract 3 Case Summary 4 Business Analysis 5 Generic Strategy 5 Five Forces 7 Value Chain Analysis 9 Implementations of Porter Models 10 Solution Evaluation 11 Cost analysis 12 Benefit Analysis 13 Conclusion and Recommendations 16 References 17 Appendix 18 Exhibit 1 18 Exhibit 2 19
Abstract This case essay provides a business analysis on Zara--the most profitable and well-known fast fashion brand under the world’s largest fashion distributor Inditex Group. The analysis will evaluate Zara by using Porter Models, looking at its Supply Chain Management and defining its current IT challenges. Then, the essay will discuss the costs and benefits of upgrading to the new OS systems. The essay will give recommendations on whether Zara should upgrade its POS terminals after considering all above factors.
Case Summary Founded by Amancio Ortega, the richest man in Spain and its biggest shareholder, Zara is a clothing and accessories retailer that opened its first store in La Coruna, Spain in 1975. Zara has been operated under Inditex Group, the world’s largest fashion distributor, since 1985. Zara was originated on a simple business idea explained by the CEO of the company Jose Maria Castellano Rois who joined Inditex in 1997 that: Link customer demand to manufacturing, and link manufacturing to distribution. (McAfee, Dessain, & Sjoman, 2007)
As a flagship chain store of the company, Zara plays a very important role in the Inditex Group. By 2003, Inditex has 1558 stores in 45 countries which nearly one third of them were part of the Zara Chain. For the fiscal year of 2002, Inditex’s net income was posted as €438 million on €3,974 million revenue, which Zara alone generated nearly three quarters of sales. Women clothing accounts for 60% of
Table of Contents Abstract 3 Case Summary 4 Business Analysis 5 Generic Strategy 5 Five Forces 7 Value Chain Analysis 9 Implementations of Porter Models 10 Solution Evaluation 11 Cost analysis 12 Benefit Analysis 13 Conclusion and Recommendations 16 References 17 Appendix 18 Exhibit 1 18 Exhibit 2 19
Abstract This case essay provides a business analysis on Zara--the most profitable and well-known fast fashion brand under the world’s largest fashion distributor Inditex Group. The analysis will evaluate Zara by using Porter Models, looking at its Supply Chain Management and defining its current IT challenges. Then, the essay will discuss the costs and benefits of upgrading to the new OS systems. The essay will give recommendations on whether Zara should upgrade its POS terminals after considering all above factors.
Case Summary Founded by Amancio Ortega, the richest man in Spain and its biggest shareholder, Zara is a clothing and accessories retailer that opened its first store in La Coruna, Spain in 1975. Zara has been operated under Inditex Group, the world’s largest fashion distributor, since 1985. Zara was originated on a simple business idea explained by the CEO of the company Jose Maria Castellano Rois who joined Inditex in 1997 that: Link customer demand to manufacturing, and link manufacturing to distribution. (McAfee, Dessain, & Sjoman, 2007)
As a flagship chain store of the company, Zara plays a very important role in the Inditex Group. By 2003, Inditex has 1558 stores in 45 countries which nearly one third of them were part of the Zara Chain. For the fiscal year of 2002, Inditex’s net income was posted as €438 million on €3,974 million revenue, which Zara alone generated nearly three quarters of sales. Women clothing accounts for 60% of
References: AcAfeeAndrew, & BrynjolfssonErik. (June-August, 2008). Investing in the IT. Harvard Business Review. BaltzanPaige. (2010). Business Driven Information Systems (3rd Edition). New York, NY, USA: McGraw-Hill Irwin. Business Week. (Arip 4th, 2006). Zara-Taking the Lead in Fast Fashion. CarrNicholas G. (May 2003). IT Doesn 't Matter. Harvard Business Review. Castellano RiosMariaJose. (1975). Business idea for Zara. Spain. CNN Business. (June 15th, 2001). Zara, a Spanish sucess story. McAfeeAndrew, DessainVincent, & SjomanAnders. (2007). Zara: IT for Fast Fashion. USA: Harvard Business School. OsterwalderAlexander. (June 23rd, 2005). Business Model Alchemist. http://www.businessmodelalchemist.com/2005/06/zaras-business-model.html Appendix