Fast fashion strategy 8 c Global distribution strategy 9 3.3.2 Strategy analysis 9 a Strategic Advantages 9 b Strategic Drawbacks 10 4.0 Recommendation 10 5.0 Conclusion 12 6.0 Reference 13 1.0 Introduction This report is about ZARA which is a global brand of clothing owned by the Inditex Group. It is the world’s third-clothing retailer‚ one of the world’s four major fashion chain (the other three are the United States of casual fashion giant GAP‚ the Swedish fashion giant H &
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Problem Statement: In 2003‚ Zara’s CIO must decide whether to upgrade the retailer’s IT infrastructure and capabilities. At the time of the case‚ the company relies on an out-of-date operating system for its store terminals and has no full-time network in place across stores. Despite these limitations‚ however‚ Zara’s parent company‚ Inditex‚ has built an extraordinarily well-performing value chain that is by far the most responsive in the industry. Therefore the major problem to the company is to
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ZARA: IT For Fast Fashion 1. Is Zara’s business model scalable ? No‚ Zara’s business model is not scalable Reasons: • • • • Though Zara is able to do well in a dynamic market‚ most of the sales of Zara come from Spain (46%) and from women’s segment (73.3%). Hence it becomes very difficult for Zara to scale it up to other countries and other segments. Zara follows decentralized model where store managers have lot a of power – It is very difficult to find such efficient people once we they scale
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How is Zara organized with respect to its vertical integration and outsourcing decisions? What governance structure does it appear to follow? Support your conclusions with reference to details of the Zara and the Ferdows reading. Zara manufactures and distributes its products in small batches. Zara is vertically integrated as the company manages all design‚ warehousing‚ distribution and logistic functions. Zara outsources sewing of garments to an outside supplier. Zara controls the product it
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The case of Zara – The Postponement strategy I) Introduction In order to compete in the world of rising globalization and shortening of product life cycle nowadays‚ firms have to deal with the demand for increasing product variety to meet the diverse needs of customers. Mass customization has become a requirement for many businesses especially in the dynamic‚ fast-changing industries. However‚ the more product varieties‚ the more difficult it is to forecast demand‚ control inventory and manufacture
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cost principle when the future utility of the inventory item falls below its original cost. 2. The lower-of-cost-or-market method is used for inventory despite being less conservative than valuing inventory at market value. 3. The purpose of the “floor” in lower-of-cost-or-market considerations is to avoid overstating inventory. 4. Application of the lower-of-cost-or-market rule results in inconsistency because a company may value inventory at cost in one year and at market in the next
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1. Zara is a Spanish clothing retailer which has 1700 stores in all over 78 countries. 2. Zara has continually maintained its mission to provide fast‚ affordable‚ and fashionable items. 3. Zara’s supply chain has undergone tremendous changes in order to sustain its competitive advantage in today’s market. 4. Zara holds 6 days worth of inventory‚ while H&M holds 52 days‚ and Spanish retailer Cortefiel holds 94 days of inventory. 5. Launched approximately 11‚000 new items per year
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Executive Summary Spanish Inditex’s most successful retail clothing store Zara is known all across the world for its trendy apparel (Mcafee‚ Dessain‚ & Sjoman‚ 2004). The company has been very successful throughout the years but management has recently decided that the IT infrastructure may need updating. The store currently runs off of a POS system supported by DOS‚ which has not been supported by Microsoft for several years (Ferdows‚ Lewis‚ & Machuca‚ 2004). The POS system has been working flawlessly
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Company Overview Zara is one of the largest and the most internationalized retailers that Inditex Group owns. Inditex Group is based in Spain‚ which is a global specialty retailer that designs‚ manufactures‚ and sells apparel‚ footwear‚ and accessories for women‚ men and children around the world. Zara’s history The founder of Zara‚ Amancio Ortega‚ opened the first Zara store in 1975 in a central street in La Caruña‚ Spain. It was first featured as low-priced look-alike products of popular‚ higher-end
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possible. For Inditex‚ time is the most important element‚ the element that they consider ahead of costs. Their vertically integrated structure not only makes it possible to shorten the response time but also allows flexibility and keeps the size of inventories to a minimum‚ thus controlling the significant source of risk in the fashion industry as much as possible. What makes the collections a success is that Inditex creates opportunities for many people to review the collections‚ continually incorporates
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