Zara Case Study: Fast Fashion from Savvy Systems
After studying this case you should be able to: Understand how Zara used a technology-dominated strategy to make its parent company, Inditex, the world’s largest fashion retailer. List the factors leading to the demise of Gap. Understand how the application of technology to data collection and analysis allows Zara to spot trends and gain insight into the future preferences of customers. Identify the strategies, and the technologies used to implement them, that Zara employs to give its manufacturing and logistics operations a huge competitive edge. Appreciate the differences between Zara stores and other retail apparel stores, and how theses differences relate to Zara’s ability to make
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and Wall Street began referring to him as DMW for Dead Man Walking. In January 2007, Pressler resigned, with Gap hoping its third Chief Executive of the decade could right the ailing giant. Then, of course there are other problems with outsourcing production. Conventional wisdom suggests that leveraging cheap contract labor in developing countries can keep cost-of-goods low. Firms can lower prices and sell more, or maintain higher profit margins—all good for the bottom line. But there’s an ugly downside to contract manufacturingFirms that allow for the outsourcing of production. Firms that use contract manufacturers don’t own the plants or directly employ the workers who produce the requested goods. (firms that allow for the outsourcing of production) in the apparel industry, sweatshop labor. Global competition among contract firms has lead to race-to-the-bottom cost-cutting measures. Too often, this means that in order to have the low-cost bid, contract firms skimp on safety, ignore environmental concerns, employ child labor, and engage in other ghastly practices. Despite the fact that Gap audits contract manufacturers and has a high standard for partner conduct, the firm has repeatedly been taken to task by watchdog groups, the media, and its consumers when reports exposed unacceptable work conditions that Gap failed to catch. This includes the Oct.