Zara Case Write-Up Essay

1262 Words Aug 28th, 2012 6 Pages
Case 2: Zara
1. What are the essential elements of Zara’s business model? The business idea of Zara is to link customer demand to manufacturing, and to link manufacturing to distribution. And based on this general idea, Zara has several essential elements for its business model. First, speed and decision making, which means that in the external level, Zara need to respond very quickly to demands of target customers, and always keep in style. While for the inside, Zara treasure intelligence and judgment of common employees who enjoy a great deal of autonomy. Second, its marketing, merchandising and advertising strategy. Zara does not spend on virtually advertising, while it spends heavily on stores, and no selling online because of
…show more content…
In the factories, applications tend to be simple, and IT is not stressed there. In DC, it involves a lot of automation and computerization. In stores, Zara has PDAs and POS systems. PDAs handle returns and information transmission, and Zara updates them according to technology changes. While in POS terminal, it runs DOS no longer being supported and self-written applications. And most of all, all the terminals or handheld or PDAs are not connected to headquarters all the time or to other stores, which created sharing problem within organization and operations. In general, the IT architecture of Zara is decentralized, with devices connected to main headquarter systems, and application supporting operations. But it seems that quite a lot of problems remained. The IT infrastructure is separate, not highly integrated and connected.
4. Critically evaluate the existing IT infrastructure at Zara by comparing it to the capabilities needed by Zara’s business model – does their existing infrastructure “fit” their strategic agility needs? According to analysis in the question 3, we can see that the general infrastructure has some problems in operations. For example, sharing problem happens within a store and between each store. And also data accuracy was poor due to lack of information, applications and systems integration. Besides, the outdated POS system can be a big problem.

Related Documents