Essay on Zara Case

Essay on Zara Case

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Introduction
Zara, the largest retailer within the Inditex portfolio, has been able to maintain a competitive advantage over its competitors by offering up-to-the-minute fashions in its stores throughout Europe, Asia, the Middle East and the Americas. Zara is the result of a clothing factory integrating forward to take advantage of linkages between manufacturing and retailing. These linkages are facilitated by information technology and Zara has developed a highly automated production and distribution system to service its stores. The information systems within Zara stores are easy to use and stable, but much discussion is taking place regarding whether or not to upgrade them to take advantage of new technologies which could better support the company’s business strategy.

Strengths & Opportunities
1. Strategy: Speed & Style
Zara’s strategy is to deliver up-to-the-minute fashions to its customers who are looking for the latest trends. In order to achieve this goal, all of Zara’s operations are developed around the tenants of speed and decentralized decision-making. All of Zara’s divisions work to decrease the time it takes to bring products from the design table to the sales floor to ensure customers find what they are looking for. By delivering new styles to stores quickly Zara is able to respond rapidly to changes in clothing trends and in the market. This allows the company to spend very little on advertising and still maximize revenue by constantly introducing new styles. This rapid merchandise turnover encourages customers to visit stores frequently as they know there will be new items available and to purchase items they like immediately since they know the offerings will be different the next time they visit...


... middle of paper ...


...ot utilize the benefits of the current systems and incorporate additional features that would improve Zara’s operations.

Case Updates
Zara’s strategic and successful use of information technology in its production and distribution system was acknowledged in 2006 when the company received the Wharton Infosys Business Transformation Award which honors excellence and innovation in information technology. Inditex received the Enterprise Transformation Award for, “redefin[ing] the business model for the fashion industry by reducing the time taken to get merchandise from the design to in-store phase.” Zara also has expanded its range of merchandise to include house wares like bed and bath linens, tableware, rugs, and other home accessories which are available for purchase throughout Europe from its website, www.zarahome.com, and are shipped directly to customers.

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