Case Analysis of Zara

Introduction

The core competitiveness of Zara is the vertically integrated value chain based on customer response. Zara owned significant competitive advantages, consisting of product development, production costs, advertising and marketing, order process, and unique information technology infrastructure. production costs, advertising and marketing, and information technology infrastructure. At the same time, there is a good value chain operation system in company. But the outdated POS system also has an adverse impact on Zara’s core competences. This article analysis the core competency of Zara and the existing challenges and problems by evaluating three responses towards Zara case, and gives personal responses and suggestions. To strengthen business operations and maintain competitive advantages, Zara must improve its IT infrastructure and consolidate its competitive advantage through a new upgraded system.

Evaluation of response A

The response A mainly mentioned that Zara is playing a role of competitive leadership in fast fashion business model. it described Zara’s core competency and business operation process consist of selling new products within very short term, quick responses for customer needs, combination of distribution, manufacturing and customer needs. The responses mainly referred to company’s competitive advantages and current operating systems, however there is little description of Zara’s information technology and system aspects. Problems in the Zara case such as: IT budget, revenue analysis, losses of SKU inventory, high time-consuming handled devices, poor information sharing with POS and PDA, have not mentioned from responses A. The article gives general advices and suggestions on whether to upgrade the old POS terminal operating system, only with explain the suggestions of outsourcing and applying new system and did not give specific and detailed solutions towards those problems and implementation plan. In conclusion, responses A described about Zara core competency in detail but lacked summary of existing issues and did not give specific recommendations for implementations. There are no references of IS issues and its solutions, no closely link to Zara case.

Evaluation of response B

The response B provided the core competency of Zara company is speed and changes in selling products. The competitive advantages are connected with customers, manufactures and distributors. Responses mainly described the important role of manager decision-making in the competition.  The article also gives the role and process of IS in the company operation, including ordering, inventory, design, and fulfillment, however, it did not mention aspect of information technology infrastructure. Some operating problems and its solutions were indicated from responses B, such as increase of responses time from manager, quick checking inventory, employing information officer for IT budget, improvement of information networks, and sending all order and sale information to factories. Above solutions towards problems could solve the problems is the Zara case, but some improvements of POS and PDA did not mention detailed. Zara's competitive advantage is a quick response to a changing market, not the operating of its IT infrastructure. Responses B should focus on the core competency of Zara company to improve IS and technology within deep solutions. In terms of the structural framework, the responses’ introduction and conclusion need to be added more information and could not be summarized in one or two sentences.