Business Model: Zara ‘s business model creates a differentiation for the brand by transferring ramp fashion to the stores in record time. It is highly responsive to the changing fashion amongst young urban population by employing of its vertically integrated operations that minimises sales forecasting, whereas conventional clothing retailers relied highly on forecasting and outsourcing of production. Also this vertical integration allows Zara to introduce new items faster and moves the garment from conception through to sales racks in 3.28 weeks for competitors the lead time is higher.
Zara also managed to revolutionise the product design, the specialised ‘commercials’ teams that creates, modifies and extends the product range based on the …show more content…
If economy collapses, Zara would suffer more from demand destruction more compared to the other apparel stores, because it has no inventory to reduce dependency on suppliers. Zara’s business model will work in dynamically changing industry with uncertain demand, or an industry which requires to reach customers faster. For example, for distributing perishable goods, Zara’s business model can be applied. However, this business model won’t work in an industry in which the raw material costs are constantly changing and demand is constant. To cushion the impact inventories are to be held. This model also won’t work if the product life is long and independent of …show more content…
It will also enable stores to provide feedback on fashion trends and customer feedback to La Coruña. The modern operating system will also allow a store manager to see a real time snapshot of inventory, sales, demands, orders etc. not only of own store at all local Zara stores. By enabling communication amongst the local stores Zara can maximize sales. The new IT infrastructure will allow integration of Information. Instead of having data distributed on separate databases/apps, complete and up to date information can now be hosted in single application, thus streamline the business process. The financial analysis also shows it is beneficial for Zara to implement a modern operating system, refer appendix 2 for detailed calculations. The Investment in new technology is not only reducing the costs, but also addressing the loss of business opportunity loss due to information
Zara also managed to revolutionise the product design, the specialised ‘commercials’ teams that creates, modifies and extends the product range based on the …show more content…
If economy collapses, Zara would suffer more from demand destruction more compared to the other apparel stores, because it has no inventory to reduce dependency on suppliers. Zara’s business model will work in dynamically changing industry with uncertain demand, or an industry which requires to reach customers faster. For example, for distributing perishable goods, Zara’s business model can be applied. However, this business model won’t work in an industry in which the raw material costs are constantly changing and demand is constant. To cushion the impact inventories are to be held. This model also won’t work if the product life is long and independent of …show more content…
It will also enable stores to provide feedback on fashion trends and customer feedback to La Coruña. The modern operating system will also allow a store manager to see a real time snapshot of inventory, sales, demands, orders etc. not only of own store at all local Zara stores. By enabling communication amongst the local stores Zara can maximize sales. The new IT infrastructure will allow integration of Information. Instead of having data distributed on separate databases/apps, complete and up to date information can now be hosted in single application, thus streamline the business process. The financial analysis also shows it is beneficial for Zara to implement a modern operating system, refer appendix 2 for detailed calculations. The Investment in new technology is not only reducing the costs, but also addressing the loss of business opportunity loss due to information