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Case Study Zara It For Fast Fashion Business Essay

Zara, one of the largest vesture retail merchants, was founded in 1975 in La Coruna, Spain. With its advanced scheme, it achieves planetary enlargement and becomes one of the most profitable trade names. The company has grown about 550 shops around the universe with about half market in Spain and France. Zara has developed a concern theoretical account based on speedy response, short deadline and a great pick of apparels at sensible monetary value. Furthermore, Zara ever could supply new apparels with manner every clip.

The success of Zara is driven by its competitory advantages of speedy response over its challengers. Obviously, Zara ‘s fast manner attack is rather different from other dressing retail merchants, which non merely enables Zara to react to the market demand with less clip compared to its rivals, but besides enhances Zara ‘s capacity to expect the clients ‘ tendency. By following the tendency, Zara is able to sell garments which are still hot and fitting clients ‘ desire without doing advertizements. Furthermore, swear given to its employees throughout the company mostly increases liberty, which in bend contributes to the success of the company. Employees have been given authorization to specific determination devising procedure ; this allows staffs to work in squads which are more horizontal than hierarchal. For illustration, shop directors could do trim determinations on what garments would be on sale at their ain shops and which points would be ordered, instead than trusting on central offices ‘ determination. Their function is specifically designed to supply apparels merely for a short period of clip and follow the current tendency.

In add-on, these two chief principals formed the company ‘s basic nucleus competences. Harmonizing to Prahalad & A ; Hamel ( 1990 ) , core competency of one corporation has three characteristics. First, it provides possible entree to a broad assortment of markets. In this instance, competences of Zara ‘s can be expanded to other markets worldwide, in another word, competence of Zara is a sort of scheme instead than a simple merchandise ; Second, it should do a important part to the perceived client benefits of the terminal merchandise, Zara ‘s competency make the company numerously profitable ; Last, competency should be barely to copy for its challengers, Zara ‘s speedy response theoretical account is non easy to copy as it may ensue big costs to get such systems for other companies.

Besides, Zara has cardinal strengths over other countries, such as, high turnover rates of merchandises and limited degree of stock, which enable Zara to hold a lead clip of 4 to 5 hebdomads for new garments and 2 hebdomads to reconstruct ; adept direction and employees, high efficient distribution systems, invention, location of shops, and etc. And these could be competitory advantages of Zara over rivals.

Zara has made extended usage of information engineering to implement dramatic decreases in the clip it takes in the design, industry, and distribution procedure. With the aid of information engineering, Zara could beef up its competitory advantage of fast velocity and decentralized determination doing scheme. First, information engineering can better speedy response attack to follow fast manner by develop communicating channels. For illustration, as facsimile is considered to take excessively long and really dearly-won to present orders, every shop equipped with indistinguishable handhelds, known as personal digital helpers ( PDAs ) . Using PDAs via modern could salvage much clip and therefore rush up the communicating procedure to central offices. In add-on, PDAs were besides used for other undertakings such as managing garment returns to DCs and conveying information from central office to all shops. Second, information engineering may besides available for easing decentralized determination doing scheme. Other big dressing retail merchants chiefly rely on sophisticated mathematics calculating to bring forth optimum programs and agendas. Executed by computing machines at central offices, to find which cloth will sell in each location and in which measure, central office merely force these apparels to shops without input of directors. By contrast, Zara ‘s shop directors, about have entirely discretion over which cloth to order and based on local gustatory sensations and instant demand. From crisp difference between Zara ‘s and other retail merchants ‘ attacks, it can be illustrated that IT will non enviably take to one best manner to put to death nucleus procedures ( McAfee & A ; Brynjolfsson, 2008 ) .

From treatment between Salgado and Sanchez, it can be seen that current issue faced by Zara is whether it should upgrade the point-of-sale ( POS ) system throughout the Zara value concatenation. The current POS terminus which in usage within every shop runs on DOS runing system, it is no longer supported by Microsoft since 2003. But this DOS-based system meets the demands of the company ; it had proved to be unusually stable, effectual and easy to keep all over the clip. Some people argue that as upgrade system would supply more functionality and convenience, and there is no demand to prolonging the competence of fast manner, we should upgrade the bing system. But it is really hazardous to make so, if the undertaking goes incorrect, it would blank out the planetary gross revenues systems and would be a batch of money. Furthermore, it would add complexness to relative simple operating system, as DOS is really stable system and Zara about have no job to cover with it. What is most of import, upgrading POS system has possible to divert from presently extraordinary concern theoretical account. For these grounds, I extremely recommend that Zara presently maintain bing operating system unless altering is necessary.

When the company can non run with disused system any more, suppose that hardware seller no longer back up ancient DOS system, Zara would hold to develop new information systems ( IS ) . When design and constellation of new information systems, it should be considered to work good and back up peoples ‘ work, non instead to do things more complicated ( Kling, 1999 ) . The look requires understanding of how people work and what organisation patterns should be obtained. When usage more advanced engineering, we should see whether it is faster or easier to utilize ( Kling, 1999 ) . What is more, we should find the function of information engineering in industry construction, analysis how IT might impact each competitory forces ( Porter, 1985 ) . Additionally, we should develop a program for taking advantages of information engineering ( Porter, 1985 ) . In the instance of Zara, we should see whether new IS still meet the company ‘s competitory advantages and competences, merely in that manner, information could assist to better growing of house.

What is more, there are some countries that Zara could accomplish betterment of its IT substructure. For illustration, there is a deficiency of connexion of in-store web ; employees have to copy day-to-day gross revenues on a disc foremost. The failing of intra-communication should be filled when developing systems. Furthermore, personal handhelds which used in every shop could non link to other shops or central offices, it besides should be considered at the clip altering the system. Meanwhile, real-time stock list trailing could besides been improved as presently Zara does non hold ability to see other shops ‘ stock list. What is more, Zara has to maintain updating its information flow to calculate future tendencies ; with efficient IS it could maintain leading of the industry. In a word, the alteration of Zara ‘s IT substructure is perfectly ineluctable and necessary because Zara such a large company can non run with disused engineering, and an effectual IS should assist with company ‘s growing.

In decision, IS are now integrated with about every facet of concern which is in order to run into varied client penchant ( Pearlson, 2004 ) , we should utilizing IS suitably to better competitory advantage and meet concern demands. Merely in this manner, Zara could obtain leading of vesture industry and has a better hereafter.

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