Zara Case Study Case Solution
The establishment of the new framework will empower Zara to enhance its proficiency, which will directly affect its income. With the smooth communication among the stores and as well as the home office, Zara can better anticipate the future needs of material, and extra expense. The framework will alsoem power Zara to make garments quickly and to get a fastfeed back from its clients. Along with this, there will be more deals, less cost, more income, and more benefit.
1.Â Â Â Â Â Should the POS application be re-written to include any additional functionality? If so, what â€¨functionality?
As Zara uses POS terminals that work on the outdated DOS framework, it needs to repair the POS terminals with a more cutting edge and well-functioning framework.
The POS should have the customer based functionalities that will record sales, returns, trades, and so forth. Similarly, “Back-office” PCs of the POS framework should handle functions, for example, stock control, obtaining, and accepting and exchanging of products to and from different areas. Zara should also use CRM programming, for example, SAP that not just addresses the short term goals to decrease cost and enhances the basic leadership, however itcan also achieve separate capacities with a specific end goal to compete successfully over along period of time.
2.Â Â Â Â Â What are the most important aspects of Zaraâ€™s approach to information technology? Are theseapproaches applicable and appropriate anywhere? If not, where would they not work well?
Zara’s approach for information technology is balanced with its core business model as Zara has organized the niche market and has presence in all continents such as Europe, America, Asia, Middle East, and Africa. Moreover, Zara’s core business model is vertically incorporated, as it has some expertise in speed and productivity and the fast fashion pattern.
Zara was created with the underlying objective to link the demand of customer for manufacturing in order to link manufacturing with distribution. Zara has been productive to stay focused on its core fashion theory, which favors innovativeness, creativity and quality design plan, with a fast reaction to market demands will yield productive results.
Zara’s novel approach to deal with promotion and advertising is an extra element to its success. Zara utilizes just 0.3% of income for its advertising consumption, rather than 3%-4% utilized by its competitors. Subsequently, Zara has maintained cost advantage over its competitors. This cost advantage has helped Zara to focus on its stores. Accordingly, it can invest in prime store areas, and store designs. The company is also ready to change the format of its stores every now and then when faced with competition.
The core business model of ZARA may not be applicable in most of the areas of the world as Zara has centralized distribution system. Along with this, Zara has only one distribution center globally, and it does not spend much time and money on advertisements and marketing.
Areas where the core business model would not work are;
- European market (due to lucrative and low retail chain concept)
- Asian markets (rebuild the model and structure due to high competition)
- North America (low retailing capacity and the customers has less fashion sense and larger size is demanded)
Therefore, Zara has to consider the American market and identify the trends of the market in order to enter internationally.
3.Â Â Â Â Â What benefits does Inditex/Zara get from its IT infrastructure? How difficult would it be for aâ€¨competitor to acquire these same benefits?
Zara’s use of IT is reliable with speed and decentralized basic leadership. Zara makes low investment in IT, thus it does not have a particular IT budget plan and cost/advantage analysis……………..
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