Tuesday, May 5, 2020

Strategic Management and Zara free essay sample

Case Introduction: When you are talking about Zara, the flagship brand of the Spanish retail conglomerate Inditex, you are talking about one of the leading fast-fashion retailers in the world. Over the past 10 years there have just been few companies receiving as much of attention because of their overwhelming success. But even though the company was often praised for their operation and information system, their marketing and centralized distribution model Zara was always questioned to maintain their success in the long term but until now proofed their critics wrong. In this case study we will lead of with some detailed information about Zara’s history to give you a better understanding for the company and their values, mission and vision. A strategic analysis of their external environment, the industry with their competitors and international opportunities will be followed by an internal analysis giving inside in the company’s operations and logistics, their strengths and weaknesses. Tangibly Inditex, the parent company of Zara, has 11. 02% net margin on operations. Intangibly, customer loyalty and brand recognition have provided significant value to Zara. 8. Information Technology @Zara DBMS A DBMS is a set of software programs that controls the organization, storage, management, and retrieval of data in a database. E. g MySQL , Oracle ERP ERP software applications to improve the performance of organizations resource planning, management control and operational control. e. g SAP ,people soft Centralised server managing and controlling of data and command from single point e. g Napster RFID Radio-frequency identification (RFID) is a technology that uses communication via radio waves to exchange data between a reader and an lectronic tag attached to an object, for the purpose of identification and tracking. E. g Barcode detector * 9. Information Technology @Zara The blend of technology Strategy enabled Zara to break all the rules in the fashion industry Zara†™s store managers leads the intelligence gathering efforts that ultimately determines what ends up on each stores rack. ZARA uses PDA’s (personal digital assistant) to gather customer input PDA’s are also linked to stores POS system, showing how garments ranked by Sales Zara’s Staff regularly take feedback from customers on what they they would like to see more of. . g colour design etc * 10. IS practical Implementation , showing its potential for supporting enterprise growth * 11. ZARA-IS Implementation * 12. Design The company can design a new product and have finished goods in its stores in four to five weeks It can modify existing items in as little as two weeks. Shortening the product life cycle means greater success in meeting consumer preferences. Zara’s capacity to adopt to new trends, understanding differences between markets was highly relied on ‘High frequency Information Systems’. Sources of Information POS data Industry Publication TV Internet University Campuses * 13. Manufacturing Highly Automated and Capital Intensive factories Developed J. I. T system incorporation with Toyota Production Scheduling Reduced Cost – Transportation and production Material Requirement and Planning Fully Automated Order Application Sources of Information Internal 20 owned factories near Spain External – HK and Barcelona * 14. Distribution Transportation and Logistics Route and schedule optimization Queue Management Systems for turnaround and waiting period of the ships at the docks Air Travel (Main Costs) – Optimize routes to minimize cost and travel time inventory management Sources of Information Centralised Distribution System Mobile Tracking Systems PDA Distribution center in La Coruna Factories in Arteixo * 15. Zara’s inventory model * 16. Advantages Vertical Integration Zara’s Business System through the Value Chain Forward Vertical Integration – Reduces Bullwhip effect Backward Vertical Integration – Reduces Cost and Improves Quality * 17. Retailing Sources of Information store manager’s decision influence on the replenishment of garments there is a heavy reliance on historical information from the store manager Promoting Quick response Coordination between retailing and manufacturing Sales and trend forecasting Marketing Strategies for different markets The aggregated demand is ascertained and the supply is allocated according to past performance of the various garments at the stores * 18. Potential for supporting enterprise growth * 19. Enterprise growth Correct prediction of Buying Behaviour and trend analysis Market research on university campuses, discos, mall etc. Feedback from stores Sales report Helps in taking quick decisions Regional managers analyse the collected feedback. Analysis used by designers to introduce new product line and modify existing ones Designers decide with commercial teams on fabric, cut, price of new garments. Inventory Control Distribution Constant stream of information Leads to constant input in product development process. Control early investments in raw material, direct and indirect of process and production capabilities. Communication and IT are essential in maintaining constant interface of various functions of management and production control. 20. Enterprise growth Cont Competitive Advantage Reduced Cost Reduced time and effort Customer Relations/Satisfaction Feedback – Process Improvements * 21. CHALLENGES ENCOUNTERED * 22. People Cultural Issues Language Issues Technical Issues Procedures Solution: Provision of training. Research and analysis of various markets. Acquisition of new workforce. Recruitme nt of local people. * 23. Database Maintain huge amount of data/ data loss Organize and interpret from available data Security measures against spy Compatibility Solution: Technological Up gradation Hire skilled employees. Acquire reliable storage devices which is a critical for the company. * 24. Hardware/Software 18 months technology upgrade Compatibility between hardware and software. License issues Cost of equipment and technology Geographic and natural constraints Solution: Sharing information where there is sophisticated technology. Working under legal boundaries. * 25. Procedures Inventory management Procedure Change with technology. Data collection procedure in different markets. Sales amp; Trends forecasting in new markets Solution: Applying large number of POS in the supply chain. Formation of Local Teams to analyze the market for forecasting. * 26. Key Success Factors for Zara Business is built on quick response Production responds to trends. Deliveries are twice weekly, unlike most of the competitors weekly schedule. KSFs: Market Research Ready raw material base Multi-functional quick decision making Vertical integration to ensure control over supply chain, and proximity Technology Cost Control, despite flexibility Technology and Infrastructure

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.