Zara It Analysis
Table of Contents
Table of Contents 1
Brief Summary of Zara 2
How would you advise Salgado to proceed on the issue of upgrading Zara’s POS systems? 3 - Should the company upgrade the POS terminals to modern operating system? 3 - Should the company build in-store networks? 4 - Should the company give employees the ability to look up inventory balances for items in their own stores? 4 - Should the company give employees the ability to look up inventory balances for items in their other stores? 4
What is the Zara “business model”? How is it different from the business model of other large clothing retailers? What weaknesses, if any, do you see within this business model? Is it scalable? 4
In your opinion, what are the most important aspects of Zara’s approach to information technology? Are these approaches applicable and appropriate anywhere? 6
References 7
Brief Summary of Zara
Zara is a fashion brand that was founded in 1975 by Amancio Ortega, who believed that retailing and manufacturing must be closely linked to provide a speedy response to consumers’ demands. Unlike other fashion chains, Zara did not invest extensively with advertising and marketing to generate sales, instead, they set up their stores in prime locations. Zara’s selling strategy relies on fast turnover of their merchandise, aiming primarily at seasonal fashions. Their decentralised approach in decision making, allows store managers to make decisions on which items should be on sale, and which items should be replenished based on their experiences and feedback with local customers. The commercial team also observed local trends and communicated with store managers as to which line of clothing would sell, and so transferred those items to other stores where they would sell well.
Zara did not try to produce clothes in the high end market. Their clothing had a short life span and was not extremely durable. They aimed at the speedy supply of top fashion trends, while
Table of Contents 1
Brief Summary of Zara 2
How would you advise Salgado to proceed on the issue of upgrading Zara’s POS systems? 3 - Should the company upgrade the POS terminals to modern operating system? 3 - Should the company build in-store networks? 4 - Should the company give employees the ability to look up inventory balances for items in their own stores? 4 - Should the company give employees the ability to look up inventory balances for items in their other stores? 4
What is the Zara “business model”? How is it different from the business model of other large clothing retailers? What weaknesses, if any, do you see within this business model? Is it scalable? 4
In your opinion, what are the most important aspects of Zara’s approach to information technology? Are these approaches applicable and appropriate anywhere? 6
References 7
Brief Summary of Zara
Zara is a fashion brand that was founded in 1975 by Amancio Ortega, who believed that retailing and manufacturing must be closely linked to provide a speedy response to consumers’ demands. Unlike other fashion chains, Zara did not invest extensively with advertising and marketing to generate sales, instead, they set up their stores in prime locations. Zara’s selling strategy relies on fast turnover of their merchandise, aiming primarily at seasonal fashions. Their decentralised approach in decision making, allows store managers to make decisions on which items should be on sale, and which items should be replenished based on their experiences and feedback with local customers. The commercial team also observed local trends and communicated with store managers as to which line of clothing would sell, and so transferred those items to other stores where they would sell well.
Zara did not try to produce clothes in the high end market. Their clothing had a short life span and was not extremely durable. They aimed at the speedy supply of top fashion trends, while
References: Mcafee, A. Dessain, V. Sjoman, A. (2007). Zara: IT for fast Fashion. Harvard business school, Boston Massachusetts., 2-23. Moore, B. (2009). The fashion industry 's old business model is out of style. Los Angeles Times. Retrieved from http://www.latimes.com/la-et-future-fashion13-2009sep13,0,10222.story on 28/01/2013 Pahi, N. (2008). Successful Business Models in the Fashion Retail Industry. Grin. Retrieved from http://www.grin.com/en/e-book/124623/successful-business-models-in-the-fashion-retail-industry on 27/01/2013 Streicher, P (2009). Why Retailers Should Replace Old Point of Sale Systems Now. Salepoint- IBM Premier Business Partner. Retrieved from http://www.salepoint.com/retail/pdf/WhitePaper-Why-Replace-Old-POS-Systems.pdf on 27/01/2013. The Business of Fashion (2013). E-Commerce Week | The Rise of New Business Models. Retrieved from http://www.businessoffashion.com/2012/01/e-commerce-week-the-rise-of-new-business-models.html on28/01/2013 World Press (2012). Fashion Industry: The Influence of Technology. Retrieved from http://kotics.wordpress.com/2012/11/19/there-influence-of-technology-fashion-industry-strategy/ on 27/01/2012.