Value Chain Analysis Of Zara

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Carr’s (2003) analysis of the commoditisation of IT represents food for thought for Zara. IT capability is valuable, regardless of whether or not it is a commodity, only if it enables the business’ strategy. Zara uses a vertically integrated supply chain to deliver their competitive strategy of fast fashion. IT is a vital component of its strategy as its employees need access to information across all stages of its value chain. The data contained on its network is vital to support critical business decisions. The fast fashion strategy requires all personnel to be in a position to respond quickly and effectively to changing fashion trends and customer demands. Zara are fast followers of fashion and IT is important for keeping its designers in contact with its suppliers.
The current POS system, basic as it is, actually fulfils the IS requirements of Zara. It is easy to use and has the confidence of staff members. Updating to a new POS system does not actually improve capability and represents a significant risk. The major concern for Zara is that the new system will not work as well as the old system and would not support the strategy as a result.
The POS’ simplicity also represents a major advantage to Zara in that it currently has sufficient in-house support to rectify any issue that may arise. The system’s architects remain employees of the company and there is deep corporate knowledge of all aspects of the POS. Zara would not be able to support the new system to the same extent as the old system if it became unwieldy. As a result, IT support requirements could significantly increase. The risk for Zara is that if the new POS failed to work, they might not have the in-house technical ability to rectify the proble...

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...aintenance. This process presents some risk and security concerns which need to be addressed. Ultimately, this may lead to a revision of a company’s IT governance structure.
The nature of social strategy means that companies do not have control over all of the information being transmitted. It leaves them vulnerable to negative reviews or sustained campaigns which draw attention to certain aspects of operations. Digital strategies allow the business to exercise a greater degree of control over content and thus limit the effects of poor public relations.
Effective social strategies can be very effective at informing and influencing potential customer but they require careful management. In much the same was as an effective social strategy will provide tangible and intangible benefits, an ineffective social strategy can dissuade personnel from making a purchase.

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