By: Ezra Eusebio

For the young, fashion-conscious city dwellers Taste in clothes changed rapidly—hard to predict and influence High end couture styles for lower prices Sophisticated interior design-updated every 5 years

THE ZARA EXPERIENCE

Fashion Life Cycle

The idea of Zara was created by Amancio Ortega. Partnered with Jose Catellano Rios, Inditex CEO Inditex-Multinational clothing retailer and

manufacturer The first store opened in 1975 Headquarters are in La Coruna, Spain Presently in over 73 countries

ABOUT ZARA

“Link customer demand to the manufacturing, and link manufacturing to distribution. That is the idea we still live by” –Jose Maria Castellano Rios, Inditex CEO

Different from average retailers

Focused on turning around delivery time within 3 weeks

Producing clothes worn by celebrities with quick turnaround

THE UNIQUE IDEA

Product Development

Product Design Team, on going development Commercial Team-Allocation Product Manager Team-Research Store Managers-Selection

DYNAMIC COMPANY

Division of Labor Chart

MARKETING

Ordering-Store managers order based on needs from hand-held devices

Handheld device shows, photos, available garments etc

Fulfillment-allocated by commercial team, delivered to stores right away

DC to store right away

Design and Manufacturing

Difference-regularly buy for two seasons but continue to develop more in between

Operate with short lead time.

Own facilities that are quick to produce new garments and textile.

 

OPERATIONS:3 CYCLICAL PROCESSES

Salgado and Castellano focused on what new systems were needed if any.

No justification of IT efforts and no cost/benefit analysis

Wrote applications themselves and made own accounting software

The IT department had 50 people from local universities and divided in 3 groups:

1. Store solutions

2. Logistics support

3. Administrative systems: Staff retention wasn’t an issue. Only one

person has left in 10 years

INFORMATION TECHNOLOGY

Inventory was used to simply make allocating decisions. Having 100% control on inventory

The applications just presented managers with quantities and due dates.

Most of the sophisticated technologies were put into equipment like cutting clothes and patterns

Hand held devices were known as PDA’s (Personal digital Assistants. This was because faxing order forms back and forth was too complicated.

PDA’s are constantly upgraded

INFORMATION TECHNOLOGY CONT.

Salgado wants to change the system. The Sanchez doesn’t

DOS (Disk Operating System)

-Stopped being supported by Microsoft in 2003.

-But it was easy to maintain over time due to the POS application that ran on top of it The system for new stores now is simple:

-There’s two floppies with all the applications needed

-If something happens and software reinstallation was created.

Daily sales were copied onto floppy disks. POS terminals and PDA’s couldn’t share information.

 

THE CASE

Would upgrading to a modern operating system put a risk and robust the infrastructure?

The hardware vendor said they weren’t planning on changes its machines so that it won’t run on DOS

Should Zara updated to windows UNIX or Linux? Should they build new capabilities into the software?, Updated apps could have larger screens and key boards.

They can go wireless. Stores can do inventory transfers. Update floppy disks?

CASE CONTINUED

Adaption to change needs smooth transition Wireless-easier on costs Cross information between PDA and POS Switch from floppies, information can be linked together IT Training, store training Advantages

-More capabilities, better capabilities, larger screens, execution of returns, data, cost efficient, no floppy disk, sales available via internet, inventory availability, avoid phone calls

ANALYSIS

Keeping it the same Convenient, safe, and successful Disadvantages: Newer and better capabilities limited,

adaptability to change, possible expansion

ANALYSIS

1. Describe the Zara Customer?

a. Fashion-conscious city dwellers

b. Missy

c. Conservative

d. All of the Above

2. Where is Zara’s corporate headquarters?

a. New York

b. Spain

c. Italy

d. France

QUESTIONS

3. Zara’s Marketing Idea consists of which of the following?

a. Annual Sales

b. New Store Openings

c. No online store

d. All of the above

Answers:1.A2.B3.D

CONCLUSION