Question

ZARA

Unique personal experience at Zara. Have you ever shopped at Zara? What did you like about the store? What didn’t you like? How does Zara differ from its competition? If you’ve visited Zara locations in different countries, what differences did you notice in terms of offerings, price, or other factors?

2. The Gap’s business model. a. Where do the Gap clothes come from? Who makes them? Is this approach ethical? b. Why was Gap initially first in sales in the fashion industry? c. Why did it experience a crisis? d. What is the Fair Factories Clearinghouse? What services does it currently offer?

Section 2. 1. What is the role of IT in the Zara’s business model? a. The use of IT in design. b. The use of IT in manufacturing & logistics. c. The use of IT in stores.

Section 3. 1. What are the limitations/vulnerabilities of the Zara’s business model? 2. How can we improve it? 3. Does Zara have a sustainable competitive advantage from its IT systems? What can and cannot be copied by its competitors?

Answer 1

2.1  Zara business model is a factory set up which means their factories push out the newest products to the stores with ZERO customization option to every one (take it or leave it) and no products are ever made to order. Zara Business model is a very supply chain intensive business model.Another one of Zara's business-model strengths is that it has limited production seasons and a high turnover of products; they change every 15 days. So Zara manages to save on its warehousing and inventory costs in every shop worldwide. ... These days, Zara's continued record of success is conveyed by its sales figures.

The goal of the information system at Zara is to discover the best design trends. Designers estimate what sells well by collecting vital information such as daily sales numbers. The real-time information helps designers to decide about fabric, cut and colors when modifying existing clothes or designing new ones. IT has shortened the time from design conception to the arrival of clothes at the distribution centers and finally to the stores to be placed on racks.Zara use IS to track customer preferences and sales. Store managers lead the intelligence gathering effort. This helps to determine what ends up on each store’s racks. Personal Digital assistants (PDAs) or handheld PCs are used to gather customer input. Staffs talk to customers to gain feedback on their preferences and issues. The valuable data gathered helps the firm to plan styles and issue re-buy orders based on feedback. Zara uses software like C-Design and Corel Draw. C-Design and Corel Draw Graphics Suite allows Zara to create and market its collections quickly and efficiently.

Logistics in Manufacturing. Organisations. Strategically managing the procurement, movement and storage of materials, production. of parts and despatch of finished products and the related information flows, into and. through the organisation and its marketing channels to meet customer needs for goods.

Transporting raw materials and intermediate goods to manufacturing facilities. Meeting and managing demand for fuel and energy throughout the supply line. Organizing warehouses and storage facilities for quick access to necessary goods.The four types of logistics are supply, distribution, production and reverse logistics. Selecting one thing as most important is never easy - for anything, let alone logistics. However, logistics is about meeting customers' demands at the right product, time, the right place, the right cost, the right quantity, and in the right condition.The primary objective of logistics management is to move the inventory in a supply chain effectively and efficiently to extend the desired level of customer service at the least cost as done parallel with waste management.

Here  online stores have created ripples of worry in the world of physical stores. With the unprecedented increase in the internet penetration and abundance of devices like mobile and tablet, online shopping has become the go-to, especially for millennials. It has created a threat to the very existence and relevance of physical stores. That’s why brick-and-mortar retail stores are forced to go innovative and give something that online stores are not providing. As it’s not always feasible to differentiate stores on the basis of product, most stores are investing their energy in enhancing what they deliver best–a real and personal shopping experience. While this approach may sound old-fashioned, the most successful retailers are using exciting in-store technology.

3.1  Zara uses software like C-Design and Corel Draw. C-Design and Corel Draw Graphics Suite allows Zara to create and market its collections quickly and efficiently. Distribution: Zara has its own centralized distribution system.

Zara has its own centralized distribution system. It keeps almost half of its production in-house and uses smart technologies to have a competitive advantage. Instead of relying on outsourcing, the company manages all design, logistics, warehousing and distribution functions itself. It uses latest technologies to keep up with latest trends. The company manufactures and distributes products in small batches. Using the computerized system, the company has reduced its design to distribution process to just 10 to 15 days.

The IT implementation of the operation research requires establishing dynamic access to compute several large live databases (store inventory, sales, and warehouse inventory) under very strict time constraints. This helps Zara to change about three-quarters of the merchandise on display every three to four weeks and customer’s average time between visits to its stores is more than its competitors at 17 times a year.

Pricing is market-based. Zara uses information systems for customer profiling, to analyze the purchase patterns and direct targeting. The company quickly respond to fluctuating customer demands in fashion trends