Zara IT for Fast Fashion - Case Study Example

Zara’s business model uses information technology to advertise it product a cross the globe. It technology has enable the business to introduce new fashions in various markets where it operates. Zara manufacture clothing apparel for men, children, and women. Upon manufacture of these clothing apparels, Zara introduces these products to the market according to the demand. Zara products competes other products introduced in the market. Commanding a large market share in a flooded market is not an easy task. Zara has been able to employ disruptive innovation to create impact in the market. Clothing industries such as Inditex present similar products in the market. Zara uses IT to penetrate the market and create new markets in locations where it has not introduced its products. Existing technology such as promotion through media does not appeal to Zara (Thinking made easy, 2011). Information technology has enabled Zara to disrupt existing technology applied in the clothing retail industry by other companies such as Inditex. Zara applies point on sale (POS) to serve its client instead of normal tallying of products at the counter (McAfee, et. al. 2007). Zara switched DOS operating system to mouse technique in order to speed up its transaction at the counter. This approach made Zara compete other exiting companies such Gap, H&M, and Inditex among other clothing companies. The idea was to penetrate the market using a technology, which was not existing. Largely, Zara was able to serve clients in markets, which had competitors. Zara was able to acquire more customers in a flooded market. Introduction of unique technology outweigh the preexisting technology thus reducing efficiency of the technology in comparison to the modern technology (Schrage, 2002). For instance, introduction of point on sale operating system influenced the speed of completing transactions at the counter. Its application influences the number of clients willing to buy product from the store because many clients would like to spare time. Disruptive companies introduce products, which increase efficiency and effectiveness. Point on sale is effective because it interpret the price of the product at a glance. It redeems time because it can handle many clients at very short time. Uniqueness in product delivery usually influences consumer behavior in the market. Queuing in a large store such as Zara is hectic because of large volume of clients served. Efficiency of the service provided would influence clients to buy products from the store. Apparel Industry Model Gap spends much money on advertisement because its products do not command large market share or influence. The objective of advertising is to create awareness about the existence of the product in the market and to influence consumers to buy the products (Businessweek. 2007). Gap takes long before introducing new apparel in the market. The month of August dominates the period when Gap introduced its product in the market. Gap primarily manufactures its goods in San Francisco, United States (Engler, 2004). Gap primary sources of risk in manufacturing include delay in logistics, which influences the time a product arrives in the market. The company risks introducing out of fashion products because of the shipping time. Fashion influences retailing of clothing apparel. Gap makes money by selling its products in various markets. Gap competitive advantage is production of anti-sweat products, which many clients seem to like. Zara customer characteristics Zara’s customer characteristic consists of you people who are quick to respond to fashions in the market (Inditex 2011). Age influence demand and taste for products. Zara directs its product to young people who dwell in cities. City dwellers like responding to change in fashion by buying new products introduced. This consumer behavior has influenced Zara’s ability to introduce new brands, which respond to their demands. Many customers would demonstrate high esteem for new fashion as opposed to old model. Unique Customer behavior Responding to unique behavior of customers has enabled Zara to penetrate markets in major cities. City dwellers are the primary target for Zara products. Their unique behaviors include fast response to fashion. City dwellers take pride in wearing product of that is new to the market. This ability would influence product innovation strategy because the products must introduce a new fashion in every season. Zara has demonstrated that it can respond to this uniqueness by introducing products, which match the change in fashion (Inditex, 2011). Behavior Drivers Zara respond to demands of young people by introducing new products of their taste. Young people like new things, which are unique in the market. Other than uniqueness, young people believe that the society should feel their presence. The only way to make them noticed in the society is through responding to fashions in the market. Zara constantly introduce new products in the market in order to respond to behavior of young city dwellers (Christensen, 2003). Zara Competencies Zara keeps branding its products to respond to demand of the market (Christensen). The key factor is fashion, which influence appeal for clothing in the cities. The attribute practiced by Zara is unique because other competitors take along time before introducing new products in the market. The application of information technology gives Zara an opportunity to ride over other competitors because many people would like to acquire effective and efficient services. Zara’s ability to supply product is efficient over other competitors. Customers of clothing apparels are keen to fashion change (Berkun, 2010). Enhancing logistic ability of the company captures the interest of the customers before they think of other competitors. Key business measures and result Zara has been able to influence a large market share in markets where its competitors had commanded. For instance, Gap had influenced American markets but that did not stop Zara from expanding its business in United States. Zara has not withdrawn from markets that it established an indication that the company has been able to influence market share. Zara spends very little in advertising its products an indication that customers are able to identify with its products in the market (Thinking made easy, 2011). Zara business model Zara’s application of information technology in handling its business differs from its competitors. Zara has demonstrated that it spends less than 0.5% of its revenue in IT. Zara’s competitors spend over 2% of their revenue in advertisement. Zara’s use of IT has created a competitive advantage over other users because it has elaborate information flow from consumers to Zara headquarter. Handling customer information dictates the viability of Zara in the apparel market. Zara responds to this need by introducing new brands when fashion changes. Competencies advantages of Zara are its ability to introduce new product brands in the market. Zara responds to needs of customers who are young in age and dwell in the city. City dwellers will always demand unique products, which are relevant to the current fashion (Bplans). Integration of hybrid information has enable Zara to beat its competitors which spend much in advertisement without integrating IT to customer behavior. References Berkun, S. (2010). The Myths of Innovation. California: O'Reilly Media, Inc. Bplans. Family Clothing Business Plan. Retrieved 7 April 2012 from http://www.bplans.com/family_clothing_business_plan/market_analysis_summary_fc.php Businessweek. (2007). Paul Pressler's Fall From The Gap. Retrieved on 7 April 2012 from http://www.businessweek.com/magazine/content/07_09/b4023067.htm Christensen, M. C. (2003). The innovator's dilemma: the revolutionary book that will change the way you do business. New York: HarperCollins. Christensen. Disruptive Innovation. Retrieved on 7 April 2012 from http://www.12manage.com/methods_christensen_disruptive_innovation.html Engler, M. (2004). The Gap Minds Itself. In These Times. Retrieved 7 April 2012 from http://www.inthesetimes.com/article/823/the_gap_minds_itself/ McAfee, A. et. al. (2007). Zara: IT for Fast Fashion. Boston: Harvard Business School. Schrage, M. (2002). The Dell Curve. On Newsstands Now. Retrieved from http://www.wired.com/wired/archive/10.07/dell.html Verity Partners LLC. (2003). Responding to New Challenges in the Branded Apparel Industry. Retrieved on 7 April 2012 from http://www.veritypartnersllc.com/files/phatfile/Verity%20Branded%20Apparel%20whitepaper%20final.pdf?&MMN_position=31:31 Inditex 2011. The most famous asset is Zara brand. Retrieved on 7 April 2012 from, http://1x9x.com/inditex-the-most-famous-asset-is-the-zara-brand/ Thinking made easy. 2011. Strategic management of Zara. Retrieved on 7 April 2012 from, http://ivythesis.typepad.com/term_paper_topics/2010/10/strategic-management-of-zara.html Appendix Zara Business Model Sustainable competitive advantage Read More