Business Analysis of ZaraQuest - Assignment Example

?Assignment: Zara caseQuest Number Introduction Zara is a fashion store that is owned by Inditex. This is a company that has branches in several countries including Russia, Spain and UK. The business that the company deals on is essentially manufacturing and sale of clothes that are designed. Since the company deals with clothes that are on fashion, the company needs to put in place an integrated system that will incorporate all the sub-system that are used in different departments so that the firm can compete effectively with the others that offers the same products. This system should combine the activities that are done in the retailing section and those in the manufacturing department (Luciano & Zocchi, 2010). To facilitate this, company has to put in place a system that will use computers that are networked so that the business objective of the company is achieved. Disruptive business model of Zara AND how it took over GAP With the assistance of Inditex, the suppliers that have shares in Zara started many retail stores that customers could get the product from. The strategy that they used is ensuring that the stores are located in streets that are visited by many people. They also ensured that the shops are in all the towns so that the number of people that get to know the product is massive. The type of the system that the company uses where independently managed in the location where the store is located. This is brought about by the fact that the type of clothes that were sold in a retail shop is based on the culture of the people residing in that particular place(Gattorna 2007). Zara business market positioning Apparel industry business model of Zara Zara business has adopted a business model which is based on decrease in quanties, great selection of clothes and style and short deadlines. The business model entails a retailer that is integrated and takes a vertical manner in the industry. It is not only an interface between the manufactures and the consumers, but also a tool for connecting manufactures, distributor and the firms that deals with retailing. The business objective that the ZaraQuest business had is to adapt to ever-changing demands of the market. From a different view, the process of making a decision is not in centralized. Each store management has the right to decide on a new way of ensuring that they are updated. This gives an opportunity to adapt to the dynamic market trends so that they are able to satisfy the customers (Obolensky, 2010). The designing and testing of any store that was started was centrally done in La Coruna then dispatch to the intended country. ZaraQuest business system The business excels in making reasonable prices with the intention of supplying large volumes of clothes. Their business success is as a result of two principles: they try to monitor the fashion trends to ensure that they avail the product the demand is at the peak. They avoid convincing the customers and instead strive at availing the customer’s desire. The second principle is building trust in customers. They concentrate on assessing the right clothes that should be kept in the store. Their primary role is to design garments that capture the market for a long time but in a short time appropriation with the current trend. The first business strategy which the company implemented is Efficiency- the company strives to satisfy the targets customers by responding to their needs in terms of fashion conscience. They applied a philosophy of manufacturing called JIT so that they could be in frontline in adapting to the latest fashions that hit the market. The idea is being able to supply the clothes when they are new in the market contrary to having it then the demand has died down. Use of information technology in management was also strategy- this is by use of a technology whose expenditure is minimal and also the workers or the users do not have difficulties in using it. In addition, the system should be straightforward and has all the features to gather for the need for a lot of technical support. This is a strategy that the company has been using for quite some time, but due to innovation and invention that come in more frequently, the competitors implement it and therefore, it is necessary for Zara to upgrade its own system. The intention of the company was to ensure that they use the latest technology so that they compete favorably with the opponents. The third is Strategy for designing the fashion- the company intended to ensure that the cost at which they incur is less and can adapt to the changing trends. They wanted to ensure that their production cost is exceptionally low regardless of the fact that the clothes that they offer are of high fashion. The personnel responsible for managing the product had to make regular visit to the stall such that they get updated on new trends in the market. They did not want to employ a high class designer but use the idea that are gathered by the team members to incorporate the concept of creative design by groups of designers being supervised by product managers. This could ensure that the design process is streamlined. Another strategy that the company decided to use is eliminating the advertising so that the expense on marketing is as low as 0.3%. They concentrated more on making their stores extremely attractive. They ensured that the physical locations of the stores that the company owns were within the location where retailing is the primary undertaking that people do (Siggelkow, 2011). In addition, they concentrate mush on the streets that are extremely famous. The arrangement of the store was also changed at a certain period to give it a new look so that the customers would be lured into. The designing and testing of any store that was started was centrally done in La Coruna then dispatch to the intended country (Gattorna 2007). The last strategy that they put in place was making a decision in a decentralized manner. All decision was made within La Coruna, but in the different stores whose composition of the workers had managers for store product. Decision making was handled by the team within functional departments. The link between the design team that was centrally placed and store in various places of the continent was the store product managers who were placed in La Coruna. They facilitate the moving of the clothes that are not selling fast in a particular store to another store whose sale turnover is unusually high. The members of any team for designing included a pair of designer and another pair of product manager that was handling a specific fashion. The work of the team was to acquire materials, order from the manufacturer and assign prices according to the store. The source of information that the company depended on regarding the trend in the fashion was this team (Obolensky, 2010). The role of other workers in the commercial department was also taken into consideration. They were able to specify the cloth that a particular store can sell.  Customer characterestics and behaviors with an eye on the driving factors First is the primary tasks which entails how the company is competent in production of the goods while the secondary task are activities that are carried out in the company to aid the previous activities. This is a form of a value chain that puts the firm that has a dimension of process-product versus a section dimension of the firm on a horizontal manner. How these tasks are performed, determines the ability of the firm or company to survive and compete well. The members of any team for designing included a pair of designer and another pair of product manager that was handling a specific fashion. The work of the team was to acquire materials, order from the manufacturer and assign prices according to the store. The source of information that the company depended on regarding the trend in the fashion was this team. When the value chain that is based on the firm is well understood, the section in the company where IT can be can be identified (Grant, 2010). Risk management perspective  The Zara business applies the risk management system that was recommended by Salgado, where they revolutionarize their information system. Considering the nature of PAS that the company uses, upgrading is very necessary so that they can accommodate future changes. The inventory control system that was developed in such a manner is was doing quite well. The company has been using DOS system which is facing a challenge since the vendors have upgraded their hardware. The company does not have a way of storing the information that has been processed and finished. This shows that the company cannot have any basis of predicting the market trends. OS that the company has been using has issues in terms of the usability (Gereffi, 2011). Though developing a new system requires the company to use money, the benefits of increasing the efficiency of doing business will be more than the cost the company uses in developing a system. The use of telephone in communication is not reliable since somebody can eavesdrop what you are communicating. Conclusion   The paper gives a detailed analysis of the ZaraQuest business. The primary tasks Zara are design and manufacturing of the garments, processing the order and accomplishing the order by supplying. The task that was done world-wide is ordering. It was particularly evident that the ordering process was the same in different countries and the frequency of making an order was also extremely high. The process itself was also precise. On the other hand, the structure of making a decision is flat. This is because it is the store manager that has the mandate to decide the type of clothes that are sold in the store. They do not entirely depend on the decisions that are from the head office. More so the opinions and ideas that originate from the junior employee are valued (Bruce & Hines, 2012)The basis of the decision that is made by the manager is what the employees suggest. They also assist the manager to facilitate the processing of the order. The rates at which changes occur in the fashion industry make it difficult for the company to use this structure in making a decision. References Gattorna, J. (2007), "Living supply chains: How to mobilize the enterprise around delivering what your customer want", Page. 49 www.oxbridgegraduates.com/essays/business/operational-model-in-zara.php#ixzz2Q4tfaGh2 Bruce, M., & Hines, T. (2012). Fashion Marketing. Routledge. Gereffi, G. (2011). International Trade and Industrial Upgrading in the Apparel Commodity Chain. Journal of International Economics . Grant, o. M. (2010). Contemporary Strategy Analysis and Cases: Text and Cases. John Wiley & Sons. Heywood, S. (2007). Do Retail Brands Travel. McKinsey Quarterly . Luciano, C., & Zocchi, A. (2010). Travel Tips for Retailers. The McKinsey Quarterly . Obolensky, N. (2010). Complex adaptive leadership. Gower Publishing, Ltd. Scheffer, M. (2010). The Changing Map of European Textiles: Production and Sourcing Strategies of Textile. Brussels:. Siggelkow, N. (2011). Change in the Presence of Fit: The Rise, the Fall, and the Renaissance. Academy of Management Journal , 34-56. Smith, C. (2010). Retailers to the World. The McKinsey Quarterly . Read More