Case Study Analysis Of Zara

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Zara: Simplicity and FrequencyZara is the largest and profitable fashion brand of Inditex, a multi-national clothing retailer and manufacturer. Zara opened its first store in La Coruna in 1975. The company revolutionized the world of fashion by bringing many collections out each season. They accomplished this by connecting customer demand to manufacturing and linking manufacturing to distribution. Zara set the standard for the fashion industry with its ability to design, produce, distribute and sell its collections within four weeks while competitors took several months.Their business model follows two fundamental strategies: stocking less merchandise and updating its collections frequently. This philosophy provided them with
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Manual inventory check performed by store manager daily.Automatic and timely update of store data. Ability to locate inventory in the supply chain and query for a SKU at any store.We proposed a phased approach over the next five years. We forecasted the different cost of each OS. Unix is the preferred solution. The average store sales are approximately €2M a year, with 91 new stores every year, we estimate a €182M a year in sales. The IT department will develop the POS application, install terminals and conduct training.YEAR 1YEAR 2YEAR 3YEAR 4YEAR 5Number of stores upgrade495504421339254Number of stores upgrade cumulative495999142017592013Operating system for POS terminals Unix € 408,375 € 544,175 € 669,600 € 784,775 € 889,325 Linux € 371,250 € 277,200 € 168,400 € 67,800 € 12,700 Windows € 420,750 € 560,050 € 686,900 € 801,450 € 937,950 HardwarePOS terminals € 12,375,000 € 12,600,000 € 10,525,000 € 8,475,000 € 6,350,000 Wireless router € 89,100 € 90,720 € 75,780 € 61,020 € 45,720 Wireless ethernet card € 123,750 € 126,000 € 105,250 € 84,750 € 63,500 ConnectivityHigh-speed internet connection € 118,800 € 120,960 € 101,040 € 81,360 € 60,960 Cost per day for programming time € 1,125,000 € - € - € - € - Cost per day of installation/training time € 990,000 € 1,008,000 €

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