Zara - IT for Fast Fashion - Case Study Example

Information Technology at the Zara Fashion Company The Spanish based clothing company survives in the competitive global fashion industry upon an analytical survey of the market variables. E very business lives in a competing environment as different forces in the market define different outcomes of activities. The Zara fashion company defines the global market environment in accordance to the marketing variables of psychographic, demographic, behavioral, and the demographic factors (Torun, 2007). Further, the company establishes on the essence of technology in compromising the negative forces while enhancing the general image of value preposition at a profitable rate. Zara’s strengths and weaknesses, and relevance to the scale of growth The company started by Amancio Ortega at the Northern part of Spain continually enjoyed growth in the Spanish market through strategic prepositions. Initially, the chain served the needs of the local consumer in the young feminine segment. Within the last ten years, the company grew proportionately to increased revenues and consumer loyalty through the modernized approaches that it employed. The company preserves the strengths of analyzing the customer targets in the market as serving the entire fashion market poses more threats than opportunities. The company defines that the youthful female consumer depicts a standardized behavior throughout the geographical segments (Mcafee, Dessain, V. and Sjoman, 2007). Zara depicts that the consumer buying decision model affects all businesses alike. The company analyzes fashion needs through the online research surveys and establishes on the fashion trends that depict a favorable rate of return on investment. Through a communicative channel that tends to link the company to the consumer, Zara advertises on the release of the garments that target to suit perceived consumer needs. The company runs a solely owned ultramodern factory that designs and makes garments in accordance to the anticipated consumer needs (Torun, 2007). Zara communicates actual date of releasing the new makes to the customer, and through an effective delivery chain, the company avails the garments to the more than 1500 outlets in 70 countries of the world economy. The attributes serve as competitive strategies as the competitors reach the market at a slow pace. Although the company perceives that, the consumer shows loyalty to the products, such a view is contradicting to the extent that not all consumer variables merge accordingly. The effect of culture, economic status, social, and behavioral attributes are likely to affect the global consumer. Zara markets standardized products throughput the global market and the factor may serve as a hindrance to growth in the global market place. Therefore, the company faces a weakness through standardization of approaches (Torun, 2007). The information needed in Zara to operate under the current business model The company is growing accordingly with advancements in fashion trends. However, despite the perceived growth rate, the fashion outlet may lack the opportunity to affect the market share because of the factors that hinder information relay. The company establishes that the consumer markets are growing accordingly through advertisements made in the fashion industry that tend to tame new customers upon every new design and provoking the existing customer to prepare psychologically for another purchase of the anticipated new trend (Mcafee, Dessain, V. and Sjoman, 2007). Since all businesses focus on the consumer behaviors in order to compromise and tame them under their product offers, Zara must ensure the fastest global methods of online communication that tends to turn the world into media conferences. Through the method, online stakeholders shall post orders, comments, and compliments concerning different products offered by Zara (Torun, 2007). The Company further finds information as an important in establishing changes in consumer needs, tastes, and preferences accordingly, an attribute that will serve to dictate performance of activities in the ultramodern factory, and ensure that the result targets to enhance and deliver the desired consumer values promptly. The Information technology components Because of the continuous rate of growth, Inditex, the parent company to Zara, relates on the salient role improving on communication to ensure that value delivery at the long run and at a competitive and profitable pace. In the year 2003, the company predicted that establishing a modernized and a communicative strategy would serve to steer the operations to an inclined level. Therefore, the company established the use of disk operating systems (DOS) would halt progress, as relay of information was relatively slow despite the continuous growth in the market share. Inditex resolved to establishing the point of sale (POS) terminals to relay information throughout the sales units and to the main offices. The approach continually enhanced performances ahead of the competitors as the communication approach relayed information from the consumer point of purchase to indicate the preferences in trends at the ultramodern factory (Mcafee, Dessain, V. and Sjoman, 2007). The company further implemented on the use of personal data assistant gadgets to enter sales values at the point of sale, the approach was favorable but fails because incompatibility with the POS software. In the current situation of the company, expansion and growth variables need control to reduce the risk of diseconomies of scale and incompetence because of inhibited communication (Torun, 2007). Through the computerized approaches, Zara reaches a wider global perspective and the implications depict on the enhanced profits market share. However, the company’s communication strategy may fail to implement the actual customer needs because of the focus towards emerging trends to forecast on emerging trends with less relevance to other dominant variables that shape the purchase model (Mcafee, Dessain, V. and Sjoman, 2007). Potential weaknesses of Zara’s information technology infrastructure and strategy The fact the Zara seems to establish different approaches to communication channels depended on the different departments may pose demerits despite the feeling of effectiveness. In close supervision of the communication model, Zara seems to emphasize on the use of point of sale terminal gadgets to relay information on sales upon the management in the different company units (Torun, 2007). The aspect serves to enhance efficiency, but the managers claim that the gadget is ineffective as the small size inhibits the process of keying in data made on sales. Therefore, the company may fail to acquire the desired global niche as continuous growth may halt because of the inefficiency in relaying of information necessary to indicate performance and establish on possible future outcomes. Information technology can serve to effect performances in an organization, whenever the process comprises of all units in the organization effectively. At Zara, findings implement that information systems vary accordingly throughout the units, a factor that increases expenditure margins and decreases the revenues accordingly. The company may further fail in effectiveness to the prevailing incompatibility of the disk operating systems (DOS) and the point of sale terminal PDA’s, which hinder the process of encoding data to the main office despite the vast business units required to encode the data spreading in more than 1500 units globally. Failure to replace the system for a modernized system may injure the company’s profitability and draw competition (Mcafee, Dessain, V. and Sjoman, 2007). Conclusions Zara Company preserves a profitable market share through strategic plans implemented to ensure clarification of the global market opportunities. Because of the strategic approaches to the market6ibng variables, the company depicts a competitive advantage in the low priced global marketing niche of feminine garments (Torun, 2007). Therefore, a company should employ all factors of production and ensure effective communication throughout the marketing variables. References Mcafee, A. Dessain, V. and Sjoman, A. (2007). Zara: IT for fast fashion. Boston: Harvard business school publishing. Torun, F. (2007). ZARA - A European fashion brand. München: GRIN Verlag GmbH. Read More