Zara Case Study - It Strategy

     Zara: IT for Fast Fashion[pic 1]

Case Study

Assignment- 1

                                                           By -Pallavi Parashar

                                                               NUID 001618551

Overview- Current business state

Zara is one of the fastest growing retailers and belonging to Spanish Inditex group. In 1975, Zara begins its activity with the opening in La Coruna of its first store, although the origins of the Group date back to 1963, the year in which Amancio Ortega, chairman and founder begins his business activity. Since then Zara has pioneered the niche market and has presence in all continents: Europe, America, Asia, Middle East, and Africa. Zara has developed unique business model and today Zara is a vertically integrated retailer.

Zara’s core business model is vertically integrated, it specializes in speed and efficiency and the fast fashion trend. Zara’s approach to information technology is consistent with its core business model. Its website www.zara.com serves only as display window and Zara does not use the Internet to make sales.

Zara prefers developing applications internally for its use, instead of buying the commercial available software. At the time of the case, the company relies on an out-of-date operating system, the P-O-S (Point of Sale), for its store terminals and has no full-time network in place across the stores. The P-O-S system runs on DOS, which is not supported by Microsoft. As much this system is outdated, it is still easy to maintain and operable and with this system, they built an extraordinary well-performing value chain. However, in 2003, Zara’s management must decide whether to upgrade the retailer’s present system and risk the reliability with the current system, or continue with the old system that will not be compatible for future changes or improvements. The case describes this value, concentrating on its operations and IT infrastructure.

 Recommended - Target business state 

To know the target business state, let us do SWOT analysis of Zara’s Case:[pic 2]

 Zara is a well-established brand worldwide. Zara’s distribution system is centralized in Spain. Their supply chain management is extremely low cost as well as most of their processes like operations, manufacturing are all vertically integrated. Unlike other retailers they handle all their processes as well as follow Just in Time system (Value Chain Management). Their clothes are produced at a low cost with the most innovative and fashionable designs and also their major strength is fast delivery of new products