Question

1) Briefly explain the intelligence-gathering exercises carried out by Zara in its stores and the role of technology in such efforts.

2) In 2010, Reed Hastings was named Fortune Magazine’s “Business Person of the Year.” Yet according to readings and class discussions, what was the Netflix CEO’s “biggest strategic regret” to that point? What was his reason for giving this answer?

Answer 1

1) Zara’s designs are based on the forecasting of customer demand. Zara’s store managers manage the intelligence-gathering exercise that ultimately decides what ends up on every store’s racks. Armed with personal digital assistants (PDAs) to collect consumer input, team members regularly chat up clients to gain feedback on what they’d like to view more of. Once stores are shut, the staff looks for trends in the collections of unsold items that consumers tried on but didn’t buy to spot any inclinations in cloth, color, or fashions offered among the products in stock.PDAs are also connected to the store’s point-of-sale (POS) arrangement showing how garments order by sales. Managers send updates that consolidate the hard data captured at the cash register with insights on what consumers would like to see. All of this important data allows the firm to design styles and issue rebuy orders dependent on feedback rather than clues and guesswork. The goal is to improve the recurrence and quality of decisions made by the planning teams.

The technology used is PDA - handheld computing machines meant largely for mobile application outside an office setting, PoS system to capture immediate data regarding a transaction process that arrests customer purchase data for further analysis. The intelligence systems comprise of their holistic integration.

2.) The biggest strategic regret was to take the firm private to the public very early without prior preparation and analysis. Once it became public, the firm was needed to disclose its financial status as per the legal laws and standards. This made the competitors saw firm’s substantial growth, and thus, they penetrated Netflix’s market. This posed substantial reduction in market share and requirement for a change in strategy.