This document provides an overview of Zara and its business model. It discusses Zara's origins in Spain and its rapid expansion globally. It describes Zara's vertical integration approach and its ability to design, manufacture, and deliver new fashion items to stores within 4-5 weeks. This allows Zara to be highly responsive to the latest trends. The document also examines Zara's use of information systems and the current dilemma it faces regarding upgrading its point-of-sale systems from the aging DOS operating system.
Zara has achieved great success through its vertically integrated supply chain model. It is able to design, produce, and distribute new clothing collections to stores within 2-3 weeks, far faster than competitors' 6-9 month timeline. Key aspects of Zara's supply chain include 200 in-house fashion designers, local fabric sourcing and production, and overnight trucking of products to European stores. This speed and flexibility allows Zara to respond quickly to fashion trends and reduces unsold inventory, contributing to higher profit margins compared to other retailers.
Zara's value chain is highly integrated and controlled. It sources materials and produces about half of products in Spain and Europe to allow for quick design changes. Products are shipped to stores within 24 hours in Europe. Store managers have autonomy to make replenishment orders based on sales data. Zara uses minimal marketing and focuses on window displays. Its competitive advantage lies in its ability to design, produce, and deliver fashion trends rapidly and at scale through its vertically integrated system.
The document outlines Zara's fast fashion business model and supply chain operations, which focuses on rapid design, production, and distribution of new fashion items to stores within weeks in order to stay on top of constantly changing trends, allowing Zara to maintain its competitive advantage over rivals with shorter inventory turnovers and product lifecycles. Zara's centralized operations and extensive use of data and technology allows it to quickly respond to demand changes through flexible procurement, production planning, and high-velocity logistics. This responsive supply chain model has supported Zara's global expansion to over 1700 stores in 78 countries while continually renewing its inventory with around 11,
Carrine Kezia Aulia presented a final project on Zara, a global fashion retailer owned by Inditex Group. The 3-sentence summary is:
Zara was founded in 1975 in La Coruna, Spain and has grown to over 1,700 stores in 82 countries, known for its ability to spot trends and quickly design and produce fashionable clothing at affordable prices. The presentation outlined Zara's company profile, operations in Spain and commitment to corporate social responsibility, as well as its strategic plan to expand further in Asia through improving its online presence and social media engagement. Competitors including H&M, Gap, and Uniqlo were also discussed.
ZARA Case Study: Role of Supply chain in organizational Successsadia butt
This document discusses the supply chain of Zara, a Spanish clothing retailer known for its fast fashion model. It outlines Zara's vertically integrated supply chain that allows it to design, manufacture, and distribute clothing in as little as 2-3 weeks. Key factors in Zara's supply chain success include vertical integration, use of information technologies to gain customer insights, and shorter lead times enabled by local sourcing and production in small batches.
This document discusses Zara and fashion trends. It analyzes Zara's business model and recommends ways for it to adapt. The slides cover: 1) defining fashion and analyzing Zara's success, 2) discussing oversaturation and moving to "blue oceans", 3) addressing Zara's limited size range in the US, 4) whether Zara should modernize its IT systems to support global expansion while maintaining its competitive advantages, and 5) learning from Zara's example of quickly delivering new designs.
Zara is a large international fashion company known for its rapid response to new fashion trends. It focuses on understanding customer demand and delivering desired items quickly through efficient production and distribution. Zara releases about 11,000 new designs each year, holding only 6 days of inventory compared to weeks for competitors. This allows it to provide on-trend fashion at affordable prices through a unique and vertically integrated business model.
Zara is a fashion retailer owned by Inditex, one of the largest fashion groups in the world. Zara opened its first store in 1975 in Spain and has since expanded to over 2,000 stores globally. Inditex controls most of Zara's supply chain, with around 50% of products manufactured in Spain and Europe and the rest in Asia and Africa. Products are shipped to logistics centers in Spain and then distributed to stores within 24 hours in Europe and 40 hours elsewhere. Zara's unique approach is to produce trendy designs in small batches within a few weeks and refresh store inventory monthly, creating urgency for customers to purchase before items sell out.
HBR Case Study - Fashion retailer ZARA has achieved spectacular growth via a distinctive design-on-demand operating model. This case describes this model and outlines a number of challenges facing the company, with a particular emphasis on its international expansion. Includes color exhibits.
Zara is a Spanish clothing retailer founded in 1975 known for its rapid fashion production. It is the flagship brand of Inditex, the world's largest apparel retailer. Zara uses a vertically integrated supply chain model to design and manufacture 50% of its products in Spain, allowing it to develop new designs in just two weeks and launch 10,000 new products each year. This fast production model and 1,800 store locations worldwide have contributed to Zara becoming a leader in the fashion industry.
Zara is a large Spanish clothing retailer known for its rapid fashion production model. It changes designs every 2 weeks compared to competitors' 2 months. Zara uses agents to scout trends and sends sketches to factories within 6 hours for production. Its infrastructure allows finishing goods to reach stores in 4-5 weeks. This rapid supply chain and production flexibility allows Zara to meet constantly changing fashion demands.
This document provides an overview and analysis of the Spanish fashion retailer Zara. It discusses Zara's history, business model, target markets, competitors, manufacturing and distribution processes, financial performance, and SWOT analysis. The key points are:
1. Zara was founded in 1975 in Spain and is known for its rapid response to fashion trends through a vertically integrated supply chain model.
2. It targets women and men aged 15-45, focusing on fashion-conscious middle-class customers.
3. Zara's success comes from its unique approach to product development and ability to bring designs from concept to stores in only 15 days through an efficient supply chain.
4. The analysis examines Zara
Zara Fashion : Marketing Strategy and M.I.S.Akash Jauhari
Zara is a Spanish clothing retailer known for its "fast fashion" business model. It focuses on design, production, and distribution processes that allow it to quickly respond to shifting consumer demands. Zara designs and produces over 12,000 new items annually and aims to get new clothing styles to stores within 4-5 weeks. It uses information systems like a centralized database, RFID, and PDAs linked to its POS system to gather customer feedback and coordinate its entire global supply chain, allowing it to rapidly replenish stores based on sales data and trends. This integrated approach has helped Zara become highly profitable and given it a competitive advantage over slower rivals.
For ZARA stores to be able to offer cutting edge fashion at affordable prices requires the firm to exert a strong influence over almost the entire garment supply chain.
1) Zara has developed a super-responsive supply chain that can design, produce, and deliver new garments to stores worldwide in just 15 days.
2) Zara's supply chain success is built on three principles - closing the communication loop between all parts of the chain, sticking to a regular rhythm across design, production, and distribution, and leveraging owned capital assets to increase flexibility.
3) These principles reinforce each other to optimize the entire supply chain and allow Zara to sustain a fast fashion model that keeps customers engaged with frequent new deliveries to stores.
Zara has been successful due to its unique procurement and outsourcing strategies. It sources fabric and finished products from external suppliers with purchasing offices in Barcelona and Hong Kong. Zara owns factories that apply Just-In-Time to help reduce costs. It also competes on fashion and quick response time, being able to design, produce, and restock products in 4-5 weeks compared to competitors' 6 months. Looking ahead, Zara may need to change its supply chain model and move more manufacturing to lower-cost countries like India and China to remain competitive while controlling costs.
Zara is by far the largest, most profitable and most internationalized fashion retail chain. Zara's success is based on a business system that depends on vertical integration, in-house production, quick response, one centralized distribution centre and low advertising cost. Zara's information system allows it to gather customer feedback and sales data in real-time to quickly design, produce, and distribute new fashion items to stores every few weeks. This rapid inventory turnover and frequent product refreshment is key to Zara maintaining its competitive edge over rivals in the fast fashion industry.
Zara faced a decision about whether to upgrade its point-of-sale operating system. Currently it uses a stable but outdated DOS system with no online connectivity. Upgrading would modernize the system but could disrupt Zara's fast fashion business model which relies on quick response. A new system is recommended that maintains the stability and quick response of the current system while adding features like online connectivity between stores and headquarters to streamline operations and information sharing. Any change must not compromise Zara's ability to rapidly adapt to fashion trends.
this presentation is about the supply chain of worlds leading apparel manufacturer ZARA and specially about it SUPPLY CHAIN. me and my colleagues have presented about the values, supply chain partners, KPI's(key performance indicators) and lot of supply chain related details n this presentation
Zara is a Spanish clothing retailer known for its rapid response to fashion trends. It operates over 531 stores globally using centralized legacy systems. While these provided data integrity and ease of training, they created bottlenecks and limited access. Zara recognized the need for faster processing systems to increase profits. It developed plans for a new distributed system using IT like ERP and RFID to achieve goals of short lead times, more styles, and reduced inventory risk. Key to Zara's success is its quick response supply chain and use of technology for market research, decision making, and inventory control.
Zara is a Spanish clothing retailer known for its rapid production of new designs to match emerging fashion trends. It operates over 1,700 stores worldwide and launches around 10,000 new designs each year, getting products to stores in just two weeks compared to the industry average of six months. Zara's supply chain and production model allows it to be more responsive to trends and offer a wider variety of fashionable products at affordable prices. It has experienced rapid international expansion and growth over the past few decades to become one of the largest and most profitable clothing retailers globally.
ZARA's external and internal enviroment. This presentation covers the main characteristics of ZARA, a general view of fast fashion indystry, Porters' Five Forces Analysis, competitors' external environment as well as a complete internal analysis regarding:competences, capabilities, resources, competitive advantage,value chain and outsourcing.
H&M has experienced continued success through its business model of providing high fashion items at low prices. It achieves this through efficient management of its supply chain and policy of quickly bringing new fashion trends to stores at affordable prices. H&M designs its collections in-house but outsources all production, allowing it to find cheaper suppliers globally. It focuses on frequent store renovations and social media engagement to keep customers interested in visiting frequently for new items. While low-cost competitors pose a threat, H&M's brand strength and rapid response to trends have allowed it to maintain its leadership in fast fashion.
Zara is a large international fashion retailer owned by Inditex, one of the world's largest fashion groups. It was founded in 1975 in Spain and has since expanded to over 2,000 stores globally. Zara is known for its fast fashion model which sees new designs manufactured and distributed to stores within weeks to respond rapidly to new trends. Key aspects of Zara's business model include an integrated design process, in-house manufacturing facilities, a highly efficient logistics network and a focus on locating stores in major cities worldwide. Zara aims to offer affordable, high-quality clothing to satisfy customer desires through continuous innovation.
Zara is one of the largest international fashion companies owned by Inditex, the world's largest fashion retailer. Zara aims to make the latest fashion trends accessible worldwide at affordable prices through its unique business model of rapid design, production, distribution, and sales through stores. The company was founded in 1975 in Spain and has since expanded internationally. Key roles at Zara include retail managers who oversee day-to-day store operations, sales assistants who help customers and process purchases, and cashiers who handle payments.
This document discusses the case of Zara, a large international clothing retailer known for its rapid response to fashion trends. It describes Zara's business model, which relies on vertical integration, in-house production, quick response times, centralized distribution, and low advertising costs. The document also discusses Zara's use of information systems across various parts of its business to gather customer data, track sales, coordinate design and production, manage logistics and distribution, and engage in other activities. Some challenges of implementing and maintaining such information systems are also outlined.
This document discusses Zara's supply chain and how it contributes to the company's success. It provides details on Zara's vertically integrated supply chain model, which allows it to bring designs to stores in just 2-3 weeks compared to the industry average of 6-9 months. Key aspects of Zara's supply chain include local sourcing, fast production times, mass customization, and using IT to share information. This vertical integration model helps Zara increase revenue through more fashionable and scarce products, while decreasing costs through factors like lower transportation and inventory costs.
This document discusses sourcing strategies in the clothing retail industry. It focuses on the balance between lean/agile sourcing strategies and local/overseas suppliers, as well as product complexity versus supply chain complexity. The key points made in the document are:
1) Retailers are taking on a more central role in global supply chains and configuration of supplier networks.
2) New trends in clothing retail, like vertical integration, are impacting the relationship between retailers and upstream suppliers.
3) The document investigates how retailers manage these relationships and balance options like decreasing product complexity versus faster supply chains.
Papa John's has experienced only incremental growth in recent years. Problems include declining operating income and net income, slower domestic revenue growth compared to international, and underperforming stock returns relative to indices. The case discusses Papa John's business model, strategy of product differentiation based on quality ingredients and community involvement, and external analysis using Porter's Five Forces showing high rivalry in the mature pizza industry.
The document discusses an investment opportunity in Ghana offered by the Ghanaian government to the fertilizer company Nitrofix to establish a fertilizer plant. It provides background information on Ghana's economy, politics, investment policies, and fertilizer market in the early 1980s. It also outlines three potential investment structures - a private enterprise fully owned by Nitrofix, a joint state enterprise owned by both Nitrofix and Ghana, and Nitrofix operating the plant as contractors while Ghana owns the physical assets - for Nitrofix advisor Craig Michael Lee to consider in making an investment recommendation.
This document discusses the aging population trends globally and in Indonesia. Some key points:
- The world's population aged 60+ will nearly triple from 2020 to 2050, bringing new challenges.
- Indonesia is also experiencing an aging population, with those aged 60+ expected to increase from 18 million in 2010 to 48 million in 2035.
- Issues arising from population aging include increased rates of mental disorders like Alzheimer's, disabilities, need for healthcare and living arrangements, as dementia cases are projected to increase dramatically.
- Reasons for population aging include increased life expectancy and reduced fertility rates leading to more people surviving to older ages.
Aegis Analytical was founded in 1995 to provide consulting services and software to the pharmaceutical industry. In 2002, Aegis formed strategic alliances with Honeywell and Rockwell Automation to increase sales of its Discoverant software. However, the alliances did not generate any sales as Aegis was a low priority for the allies. This created problems of high dependency on allies and unnecessary bureaucracy. While Discoverant provided value as an innovative product, Aegis' heavy reliance on alliances without ensuring commitment from partners hindered its growth strategy.
Amyotrophic lateral sclerosis (ALS) — also known as Lou Gehrig’s Disease — is a disease that affects motor neurons in the brain and the spinal cord. Motor neurons reach from the brain to the spinal cord and affect muscle movement. The ongoing damage from ALS causes motor neurons to die. When this occurs, the brain can no longer start or control muscle movement. This eventually can lead to paralysis.
Strategic management, cg, sr, and ethicsAamir chouhan
This document discusses concepts related to strategic management, corporate governance, ethics, and stakeholder responsibilities. It addresses the following key points:
- Corporate governance involves interaction between management, boards of directors, and shareholders. Most boards fall into categories ranging from passive to actively engaged.
- Stakeholders are groups with an interest in an organization like shareholders, customers, and employees. There is debate around which stakeholders companies have the greatest responsibilities towards.
- Ethics refers to principles of right and wrong behavior. The document discusses various frameworks for ethical decision making including utilitarianism, justice approaches, and universal truths.
This document discusses IT for fast fashion companies like Zara. It outlines Zara's business model and use of IT. It analyzes Zara using Porter's five forces. Zara turns fashionable clothing around in less than two weeks through limiting outsourcing and producing copies in-house. However, Zara's IT infrastructure is outdated, using DOS-based point of sale terminals without full network capabilities or inventory management. The document recommends Zara upgrade its systems to improve operations like demand forecasting and inventory replenishment through real-time information sharing and inventory management.
Zara is a Spanish clothing retailer known for its rapid 2-week production cycle and frequent new designs. It operates integrated supply chains to develop 10,000 new products annually. Zara designs most products in-house and manufactures half itself using nearby factories, with the rest outsourced to European and some Asian suppliers. Zara's design, production, distribution and store teams work closely together to quickly translate sales data into new production runs, allowing frequent updates to match changing fashion trends.
Zara is a Spanish brand of clothing founded by the visionary Amancio Gaona and Rosalina Mera at 1975. It is one of the major selling brands of one of the biggest fashion retailer ‘INDITEX’. Zara is now available in 86 countries with total of 1,763 stores worldwide. In 1975 INDITEX established Zara’s 1st store in downtown A Coruna, Spain. Zara offers fashionable designs for men, women, and kids.
Zara started as a small company making women's clothing in Spain in 1963. In 1975, after a cancelled order, Zara opened its first retail store to sell excess inventory, learning the importance of integrating manufacturing and retail. Since then, Zara has grown to over 1750 stores worldwide selling affordable yet stylish clothing. Zara's success is due to its unique fashion designs, real-world prices, and collaborative digital networks linking it to suppliers and customers. It can develop new products and get them to stores within just two weeks, launching around 10,000 designs annually.
This document contains the names of 5 people: Christian Deing, Simon Luyken, Julika Reusse, Sebastian Stratmann, and Anna Worster. No other information is provided.
Zara has become extremely successful due to its responsive supply chain management. It can design, produce, and distribute new fashion items to its stores within 2 weeks, allowing it to stay on top of changing fashion trends. Zara's vertically integrated supply chain with in-house production facilities near headquarters allows it to quickly make changes to designs based on customer demand feedback collected by store managers. This fast production cycle, along with twice-weekly deliveries to stores, means customers always find new inventory that reflects the latest trends, fueling Zara's success.
The project is a study on how Vertical Integration as a supply chain strategy has worked for Zara in emerging as a fast fashion system. It also focuses on analyzing the competitive advantages and the challenges of implementing Vertical Integration for Zara.
The document discusses Zara's business model and use of technology. Some key points:
1. Zara links customer demand directly to manufacturing and distribution through vertical integration. Designers gather customer data from stores to quickly design and produce new products.
2. Products move from design to stores in just 3 weeks, much faster than competitors. Information technology helps share designs and gather sales data from stores twice weekly.
3. By producing locally and frequently updating stock based on sales, Zara can respond rapidly to fashion trends and consumer demands. This keeps customers returning to stores regularly.
Zara is a Spanish clothing retailer founded in 1975 known for its rapid response to fashion trends. It has over 1,600 stores worldwide and is a flagship brand of the Inditex group. Zara's business strategy focuses on design, manufacturing, and logistics to produce trendy clothing in only 2-3 weeks. Zara's designers attend fashion shows to develop initial collections 9 months in advance and make constant adjustments based on sales data and customer feedback. Manufacturing is split between company-owned factories in Europe and outsourcing to factories globally to maximize flexibility and quick production turnaround.
Zara has become one of the world's leading fashion retailers through its innovative organizational strategies. It produces around 10,000 new designs each year through a rapid 14-day production cycle. This allows Zara to get new fashion trends to its over 2,700 stores across 60 countries quickly. Zara's global expansion plan aims to open one new store every day. Its strategies include company-owned stores, franchises, and joint ventures. Zara's success is driven by its internal resources, customer, production, and communication strategies that focus on rapid replenishment, limited production runs, and investing savings from zero advertising back into the customer experience.
Zara is a Spanish clothing retailer known for its rapid response to fashion trends. It produces around 450 million items per year through a vertically integrated supply chain that allows new designs to reach stores in as little as 2 weeks. Zara's unique approach prioritizes responsiveness over cost reduction through short production cycles, 2,000 stores worldwide, and a centralized distribution center in Spain. This enables Zara to replenish stores more frequently and have 11,000 new designs annually, driving its competitive advantage in fast fashion.
An accelerating, customer-centric, omnichannel world has forced leading Apparel and Footwear players to deliver trend-right collections faster than ever while maintaining a cost-effective and globally-scalable organization. Take a look at how some of the best-in-class Fashion brands are investing in key Fast Fashion tenants to change how they manage product innovation, design, merchandising, sourcing, commercialization and more to win at the speed of Fashion.
FAST FASHION IN THE MOROCCAN APPAREL SUPPLY CHAIN: A CASE STUDYijmvsc
The apparel supply chain is a dynamic industry made distinctive by demand uncertainty and the handling of very many Stock Keeping Units (SKUs) during one season, which make it impossible to forecast demand accurately. Hence, apparel brands have to continuously maintain reactivity to the changing trends in consumer fashion tastes through quickly creating new designs that are suitable for all customers with affordable prices. In this context, fashion retailers adopting a new approach called fast fashion raised. In this paper, we will examine at first, from a literature review, the emergence of fast fashion model especially the ZARA Case. Then by conducting semi-structured interviews, we will analyze DIAMANTINE (a Moroccan fashion retailer brand) fast fashion model and identify the way of its success from a supply chain management perspective.
Zara has built a highly efficient supply chain and logistics system that allows it to bring new fashion designs from concept to stores in just 2 weeks. It uses a vertically integrated model where designs are created based on data from stores. Approved designs are quickly manufactured in nearby factories before being shipped to stores twice per week. Zara is proposing to expand this efficient model to the US by opening local distribution centers to manufacture and distribute to North American stores within 24 hours, reducing shipping costs and improving fashionability for American customers. While outsourcing logistics could improve efficiency, it risks losing control over their specialized system which is key to Zara's success.
Zara has maintained its leadership in the apparel industry through its unique supply chain strategies, including quick response to demand trends, small batch production to preserve exclusivity, and a central distribution center that can deliver new items within 48 hours. It produces 450 million items per year through hundreds of designers and production facilities near its headquarters in Spain, Portugal, and Morocco. Stores are located in high traffic areas and change window displays frequently to engage customers.
Zara was founded in 1975 in La Coruña, Spain by Amancio Ortega. It has since expanded to over 1,671 stores across 85 countries. Zara designs and manufactures clothing and accessories for men, women, and children. It is known for its rapid response to fashion trends through a vertically-integrated business model that allows it to design, produce, and distribute new products to stores within 2 weeks. Zara owns factories in Europe to maintain tight control over production while contracting out some garment assembly. It has a highly efficient logistics system that delivers new stock to stores twice per week on average within 24-48 hours. Zara's international success is driven by its focus on local demands
Similar to OSCM_Zara for IT Fashion_HBR Case Analysis_Group I (20)
Papa John's has experienced only incremental growth in the new century. Domestic revenue growth decreased to 1% in 2003 and operating income and net income have been declining for the past 4 years. Additionally, Papa John's stock performance has underperformed compared to industry benchmarks. Key issues include a saturated pizza industry, rising costs, and a need to return to faster growth and store expansion. Product differentiation and focusing on unique attributes are theories that could help Papa John's enhance its competitive position.
Walmart is the largest global retailer founded in 1962. It operates in 16 countries with over 11,000 stores worldwide. Walmart faces challenges from market saturation and criticism over social issues. However, its strategies of cost leadership through supply chain efficiency and internalization to new markets have contributed to its success. Going forward, Walmart could consider fine-tuning its business strategies, continuing internalization with better approaches, and refreshing its supply chain strategies.
ENI was an Italian state-owned oil and gas company that had become heavily politicized and unprofitable until Franco Bernabe became CEO in 1990 and led an extensive restructuring process. Bernabe removed political interference, sold off non-core assets, fired corrupt executives, and introduced transparency and professionalism, turning ENI into a profitable private company. His leadership demonstrated how state-owned enterprises can be transformed from politically controlled to independently operated organizations through a commitment to integrity, communication, and operational excellence.
Commerce Bank implemented a revolutionary business model in the US banking industry by focusing on deposits rather than loans and providing an excellent customer experience through retail-inspired branches and services. This allowed Commerce Bank to grow much faster than the industry, with deposit growth averaging over 30% from 1998-2001 compared to 6% for the industry. However, competitors began adopting some of Commerce Bank's service offerings, threatening its position, and it faced pressure to continue innovating.
This document analyzes Benihana of Tokyo through a case study presented by a group from Binus Business School. It summarizes Benihana's history and business model, how it responded to problems in the restaurant industry, and the strategies that led to its success. Key points included introducing the hibachi table arrangement to keep labor costs low, maintaining Japanese authenticity, and investing heavily in training, marketing, and ensuring customer and employee satisfaction. The analysis examined Benihana's operations and strategies to understand its growth and identify issues it may face for future expansion.
This document provides an analysis of Apple Inc. in 2008. It begins with an overview of Apple's business evolution and product line expansion from the 1970s to 2000s. It then examines Apple's competitive positioning using Porter's Five Forces model and SWOT analysis. Key problems identified include deteriorating market share and strong downward pricing pressure. The document analyzes Apple's marketing strategy, business model, and retail store performance. It concludes with recommendations to help Apple maintain its leading industry position.
Starbucks faced several challenges in 2002, including maintaining consistent service quality across thousands of stores due to the complexity of its large drink portfolio. It measured service performance using metrics like mystery shopper scores but still sometimes struggled to meet customer expectations. Starbucks also had to manage intense competition from smaller coffee chains and large fast food competitors. Its aggressive growth strategy required carefully selecting new store locations and product mixes to continue expanding its global brand.
Barilla, the largest pasta manufacturer in the world, faced issues with fluctuating demand that strained its manufacturing and logistics operations. It analyzed adopting a Just-in-Time Distribution system to better match supply with unpredictable demand. However, implementing JITD would face resistance internally from sales and marketing teams and externally from distributors. Barilla would need to overcome this resistance by clearly communicating the benefits of JITD, addressing trust issues, and incentivizing participation from all parties.
More from Alexander Martinus Christian, S.H., MBA (8)
Retail Audit Program | Retail Store Audit ProcessRetail Scan
Retail Scan is a pioneer in India in 100% customized retail audits. Retail Scan has a proprietary app-based store tracking technology. Our well-trained auditors go on the field and capture the status of in-store merchandising elements like windows, assets, POSM elements, planograms, product availability on shelf, etc. through survey data and images.
Presentation on Retail Banking - An OverviewAjay S
PPT on Retail Banking.
Introduction to Retail Banking
Let's start with an introduction to retail banking. Retail
banking, also known as consumer banking, involves providing
financial services to individual consumers rather than businesses. It
plays a crucial role in the financial system by offering services such
as savings accounts, loans, and credit cards. These services help
individuals manage their finances effectively and securely.
History of Retail Banking
Retail banking has a fascinating history. It began in ancient
times with temples providing loans. During medieval times, banks
like the Medici Bank emerged in Europe, offering services to both
merchants and individuals. The Industrial Revolution in the 18th and
19th centuries saw the establishment of modern banks, introducing
products like savings accounts and personal loans. The 1960s
brought about a significant change with the introduction of ATMs,
which revolutionized access to banking services. In the 21st century,
the digital revolution further transformed the industry, making
financial services more accessible through internet and mobile
banking.
Key Services Offered
Retail banks offer a variety of services. First, we have
deposits, which include savings accounts, checking accounts, and
fixed deposits. These accounts provide a secure place to store money
and earn interest. Next, there are loans, including personal loans,
home loans, and auto loans, which help individuals make major
purchases or investments. Lastly, credit and debit cards facilitate
cashless transactions and provide short-term credit for purchases.
Types of Retail Banking Accounts
Retail banks offer different types of accounts to meet various
needs. A savings account allows customers to store their money
securely while earning interest. A checking account provides easy
access to funds for daily transactions. Fixed deposits offer higher
interest rates for money that is locked in for a specific period.
Recurring deposits allow customers to make regular monthly deposits
that also earn interest.
Retail Banking Channels
Retail banking services are accessed through various
channels. Traditional branch banking involves visiting a physical bank
branch. Online banking allows customers to manage their accounts
and transactions via the internet. Mobile banking uses smartphone
apps for banking services on the go. ATMs, or automated teller
machines, provide cash withdrawals and other services without
needing to visit a branch.
Benefits of Retail Banking
Retail banking offers several benefits. It provides
convenience, allowing customers easy access to financial services.
Accessibility is another key benefit, as these services are available to
a wide range of customers. Finally, retail banks offer a variety of
financial products, from savings accounts to loans, to meet different
financial needs.
Challenges in Retail Banking
Despite its benefits, retail banking faces several challenges.
Boost Engagement and Retention with MaxLearn’s Microlearning LMS.pdfakshaykumar888810
MaxLearn offers a cutting-edge microlearning platform that helps to create, deliver, and verify the courses with a click of a button to improve employee efficiency.
How to Manage a House of Brands like P&G, Unilever and NestlePromptCloud
A "House of Brands" is a strategic model where a company owns and manages several distinct brands, allowing them to maintain their individual image and value proposition.
Examples include P&G, Unilever, and Nestle managing multiple brands in different product categories.
How to Manage a House of Brands like P&G, Unilever and Nestle
OSCM_Zara for IT Fashion_HBR Case Analysis_Group I
1. 9/22/2014
CFV Project - MAPI
1
Case Study Analysis
Zara: IT for Fast Fashion
Binus Business School,
MM Executive Batch 20
Presented by Group I
Alexander Christian
Dina Sandri Fani
Jenna Widyawati
Ridwan Martawidjaja
2. Table of Contents
9/26/2014
2
Introductions
About Zara
Zara’s Issues
Analysis
Recommendations
1
2
3
4
5
Case Analysis – Barilla SpA
3. Table of Contents
9/26/2014
3
Introductions
About Zara
Zara’s Issues
Analysis
Recommendations
1
2
3
4
5
Case Analysis – Barilla SpA
4. Inditex Landmarks
CFV Project - MAPI 9/22/2014
4
1963 Amancio Ortega Gaona, chairman and
founder of Inditex, launches his business as a
clothing manufacturer.
1975 Zara is founded with the opening of the
first store on A Coruña (Spain) city center street
1976 The Zara fashion concept is well
received by the public, allowing it
to expand its network of stores to major
Spanish cities
1985 Inditex founded as the head of the
corporate Group
1986 Group manufacturing companies sell all
of their output to Zara and lay the groundwork
for a logistics system capable of addressing
expected rapid growth
1988 1st Zara store outside Spain opens in
December 1988 in Porto (Portugal)
1989-1990 The Group expands to the United
States and France with the opening of stores in
New York (1989) and Paris (1990)
1991 Launch of Pull&Bear. The Group
acquires 65% of Massimo Dutti Group
1995 Inditex buys 100% of Massimo Dutti’s
share capital
1998 Bershka launches, targeting a younger
female market
1999 The acquisition of Stradivarius makes it
the Group’s fifth concept
5. Inditex Landmarks
CFV Project - MAPI 9/22/2014
5
2000 Inditex moves its headquarters into a
new building in Arteixo (A Coruña, Spain).
2001 Launch of the Oysho lingerie brand. On
23 May 2001 Inditex goes public and is listed
on the stock market
2003 The first Zara Home stores open. Inditex
inaugurates its second Zara distribution centre,
Plataforma Europa, in Zaragoza (Spain),
supplementing the Arteixo logistics hub (A
Coruña, Spain).
2004 Opens store number 2,000 in Hong Kong,
bringing its presence to 50 countries in Europe,
the Americas, Asia and Africa
2006 Opens store number 3,000 in Valencia
(Spain), a Zara Home store in one of the city’s
busiest shopping areas.
2007 Adds two news logistics platforms in
Onzonilla (León) and Meco (Madrid), both in
Spain. Inditex has eight logistics platforms in
Spain.
2008 Launch of fashion accessories concept
Uterqüe, the company’s eighth chain. Inditex
opens the store number 4,000, this time in Tokyo.
2010 The Group reached the 5,000-store mark
with the launch of a cutting-edge, eco-efficient
Zara store in the heart of downtown Rome (Italy).
In September, Zara began selling its products
online and by year’s end the online store was
available in 16 European countries.
2011 All the Inditex concepts have online stores.
6. About Inditex
Inditex presents in 88 markets in all five continents, with upwards of 6,460 stores and
128,000 employees
CFV Project - MAPI 9/22/2014
6
12. Inditex’s Business Structure
CFV Project - MAPI 9/22/2014
12
Traditional model Inditex model
Design
Sourcing
Store
Customer
Customer
Store
Sourcing
Design
Opposite of traditional clothing
cycles
Pull type production process
Quick response
Real-time sales information from its
stores
Small batch quantities allow the
retailer to see what items are
working with shopper
A central distribution center in
Arteixo, with strong IT systems
developed by Inditex and third
parties, supports its supply chain
model
All items are shipped back to Spain
where they are then shipped out to
stores around the world
13. Inditex Retail Chains
CFV Project - MAPI 9/22/2014
13
Founded in 1975
Continuous design based on
customer desires, for
women, men, & children
Acquired in 1995
Higher fashion for men and
women
Founded in 1998
Trendy clothing for a
younger market
Founded in 1981
Offering casual clothing at
affordable prices
Acquired in 1999
Youthful urban fashion
Founded in 2001
Lingerie
14. Table of Contents
9/26/2014
14
Introductions
About Zara
Zara’s Issues
Analysis
Recommendations
1
2
3
4
5
Case Analysis – Barilla SpA
15. About Zara
CFV Project - MAPI 9/22/2014
15
Opened its 1st store in 1975 in A
Coruña (Spain) by Amancio Ortega
Operates in 87 markets with a network
more than 1,900 stores located in
major cities
Consists of more than 200
professionals and aimed to bring Zara’s
design process closely linked to public
Introduce vertical integration of
activities in order to be flexible and fast
in adapting to the market
Require to constantly updated
merchandise: new garments must be
landed in stores twice weekly
Pays special attention to the design of
its stores in order to deliver a superior
customer experience
16. About Zara
Vision and Mission
CFV Project - MAPI 9/22/2014
16
Vision
“Zara is committed to satisfying the desires of our customers. As a
result, we pledge to continuously innovate our business to improve
your experience. We promise to provide new designs made from
quality materials that are affordable”
Mission
“Through Zara’s business model, we aim to contribute to the
sustainable development of society and that of the environment with
which we interacts”
17. About Zara
Competitive Advantages
CFV Project - MAPI 9/22/2014
17
Cost Leadership
Fashionable (quality) at
reasonable price
“Cheaper price than
Benetton and GAP, and
still being fashionable”
Fast Production
Ability to design and get
finish goods in stores
within 4-5 weeks
Very quick to get
designers-influenced
products into their
stores
Product Variation
Ability of Zara to launch
new trends, design,
and variation of
product
Low level of inventory
Efficient distribution
system
Product turnover is high
18. CFV Project - MAPI 9/22/2014
18
About Zara
Perceptual Mapping against its competitors
Perceived as a brand with a low price but with a high fashion taste!
19. CFV Project - MAPI 9/22/2014
19
S W
T
Strengths
• Cost leadership strategy
• Efficient distribution
• Fast delivery of new products
and trends
Opportunities
• Global market penetration
• Online market
• Distribution center in US and
developing countries
Threats
• Local competitors
• Global competitors
• Zara based in Spain and has
a huge number of stores in
Europe will dent in revenues
O
Weaknesses
• Centralized distribution
system
• Low marketing expenditure of
0.3% of its revenue
• Only has one manufacturing
and distribution center in the
world
About Zara
SWOT Analysis
20. Zara’s Business Model
Value Chain Model
CFV Project - MAPI 9/22/2014
20
ORDERING
Administration & Systems
FULFILLMENT
Procurement
DESIGN
MANUFACTURING
DISTRIBUTION CENTERS
STORES
Business Support Units
Support
Activities
Primary Activities
Firm’s
Value
Chain
Michael Porter’s Value Chain Model for Zara
“Link customer
demand to the
manufacturing,
and link
manufacturing
to
distribution”
21. Zara’s Business Model
Empowering the store managers and commercial teams
CFV Project - MAPI 9/22/2014
21
Input
Process
Output
Raw material
Fabric Wool
1 Design
2 Extend & modify
3
Place production
orders
4 Set prices
Leather
1 Sketch
2 Approved sketch
Commercial
Team
Served as La Coruna’s main interface with Zara stores
Helping the design teams to keep abreast of fast-changing
trends
Traveled extensively: mystery shopping on what resident
wears; interviewing store managers to find out what
kinds of clothes were selling
Communicate the findings to the design teams
Store Product
Manager
22. Zara’s Business Model
Vertical Integration Model
CFV Project - MAPI 9/22/2014
22
Design/Production/Logistics Store Customer
Full discretionary of
commercial team, i.e.
product managers
Product managers to
set the garment prices
Invested heavily on
stores
Store layout completely
changed every 4-5
years
New layouts designed &
tested before being
rolled out
La Coruna traveled
around the world to set
up the new configuration
Short product life spans
within customers’ closet
Impulsive buying: grab it
as soon as they saw
Generate repeat
customers: visit the
store often as new
styles showed up all the
times
23. Zara’s Business Model
Continuous design, production, and distribution
CFV Project - MAPI 9/22/2014
23
Creative
Departments:
200+ staffs
Samples: prototypes
made in-house & by
suppliers
Spreading:
material for
garments laid out
in layers &
marked
Cutting: a machine
cuts the fabric
according to the
patterns
Sewing: cut fabric is
shipped to
workshops to be
stitched
Delivery: garments
arrive in stores within
48 hours of ordering
Shipping: from
logistic centers to
stores, road and air
Finishing: garments
are pressed,
dressed, and quality
checked
Design, Product,
and Market Cycle
1. Final design: 1
day
2. Manufacture: 3-
8 days
3. Transport: 1 day
4. Selling: 17-20
days
24. CFV Project - MAPI 9/22/2014
24
Zara’s Operating Model
Three cyclical processes involved
Order
(twice a week)
Fulfillment
Design &
Manufacturing
Replenishment Initial Request
Predetermined quantities based on
past selling data for those who missed
the order submission deadline
Store manager to decide
replenishment quantities by using
canvassing model
Order made through PDA handheld
that was linked to information systems
at La Coruna
Personalized offers for each store
(developed by commercial team)
Divided the offer into segments
Store staffs fill in the offer for their
segment
Beam backs to the store manager
Store manager to review and
send the completed form back to
La Coruna
25. CFV Project - MAPI 9/22/2014
25
Zara’s Operating Model
Three cyclical processes involved
Order
(twice a week)
Fulfillment
Design &
Manufacturing
Received order
SKU ≤
Supply?
Yes
No
Inventory to be divided to all stores
Determine which stores should get
the available inventory and which
wouldn’t based on past
performances
Commercial team to consult with
product managers in determining future
productions
Increase the production a.s.a.p. when
demand > supply
Decrease replenishment request and
stop placing new factory orders when
supply > demand
Showed up at stores 1 or 2 days after
order was placed
Truck delivery for stores in Western
Europe from 2 Spanish DCs
Replenished from smaller local DCs for
stores in Latin America
Air delivery from Spanish DCs for
remote stores
26. Zara’s Operating Model
Three cyclical processes involved
CFV Project - MAPI 9/22/2014
26
1 Zara’s design team monitors
fashion trends and store sales.
Based on this they come up
with 1,000 designs a month
Design team
They send these out
for manufacturing
around the world
Manufacturing
3
2
Completed designs
are shipped back
to Spain
The design team then
flies or trucks out
consignments for each of
Zara’s stores based on
local needs and trends. A
store gets consignments
twice a week
Local store manager
in each country tells
the Zara HQ in
Spain what the store
needs and much
4
5
Retail
Design &
Manufacturing
27. Table of Contents
9/26/2014
27
Introductions
About Zara
Zara’s Issues
Analysis
Recommendations
1
2
3
4
5
Case Analysis – Barilla SpA
28. Zara and Information Technology
Information systems at La Coruna, factories, stores, and DCs
CFV Project - MAPI 9/22/2014
28
No CIO and no formal processes for setting
an IT budget, including on deciding a
specific technology investments and
projects
Zara’s IT spending was below average of
North American retailers, i.e. 0.5% vs. 2% of
its revenue or amounted to €25 million
Little justification for IT efforts
Cost-benefit analysis conducted only for a
proposed efforts
Prefer to build in-house application rather
than buying commercially available software
as operations were too unique and complex
IS Department consisted of 50 people;
divided into 3 functional areas i.e. Store
Solutions, Logistics Support, and
Administrative Systems
29. Zara and Information Technology
Information systems at La Coruna, factories, stores, and DCs
CFV Project - MAPI 9/22/2014
29
Several information systems are used to prepare
orders, distribute them over internets and collect
them
Factories had simple apps which provided
information about order and due dates
DC had largest automation with complete
tracking of SKU’s
Stores used PDA’s which communicate to La
Coruna via modems
PDA’s were upgraded constantly while POS
terminals remained same for over decade
POS used DOS as operating system and its
installation and maintenance was very simple
No real time feedback from stores to Zara’s HQ
Transmission required copying into floppy disc &
then sending it using internet which happened at
the end of the day
No dialogue between PDA and POS inside store
or between two stores
30. CFV Project - MAPI 9/22/2014
30
Zara and Information Technology
Current Status & Dilemma
Current Status
Currently uses POS system based upon DOS which is
very easy to use & working fine for them
Does all the basic ops of billing but does not provide any
customer insights, real-time data or any advanced sales
projections
Zara is getting bigger & bigger: operations are becoming
more complex
Hardware vendor may modify peripherals for POS so
they may not run on ancient OS such as DOS
Dilemma
Shall they let go off DOS which is working great for them
& migrate to modern OS such as Windows, Linux?
If they are not migrating to new OS then should they
stock up on current POS terminals to protect them from
sudden loss of support from vendor?
If they migrate to new OS, can they use this opportunity
to build new capabilities in POS?
If they are building new POS, can they extend its
capabilities so that it can have network across the stores
& within the company?
31. Table of Contents
9/26/2014
31
Introductions
About Zara
Zara’s Issues
Analysis
Recommendations
1
2
3
4
5
Case Analysis – Barilla SpA
32. CFV Project - MAPI 9/22/2014
32
Zara and Information Technology
DOS based POS
Why DOS based POS work for Zara
DOS based POS is in alignment with Zara’s business
philosophy
Majority of business concentrated in Europe
especially in Spain
Zara prefers speed based decentralized decision
making
Highly responsive vertically integrated supply chain
reduces need for long range sales forecast
More dependant on market feedback from
‘commercials’ than from customer data insights
Believed in ‘manufacturing on fly’ rather than long
range sales forecast
Low level of inventory in current scale operation:
reducing need for smart inventory management
Current scope of operations makes ordering and
fulfillment possible using DOS based POS
33. CFV Project - MAPI 9/22/2014
33
Zara and Information Technology
IT Installation
Easy installation & ease of operation
Use of DOS based POS is very user friendly, stable,
and easy to maintain
Layman like store employee can switch on system &
set up entire POS architecture
Complete software installation does the trick in the
event of serious software malfunction
No need to separate maintenance crew for POS as
employees can do it by themselves
Ease of customization on POS: Zara operated in
various geographies & currencies which necessitates
need of customization
Majority of complex operations such as sewing,
dyeing were outsourced by Zara. Hence factories
require simple apps rather than complicated apps
due to its current scope of business
34. CFV Project - MAPI 9/22/2014
34
Zara and Information Technology
Need for new system
Why we need a new system
Zara is the only customer using DOS
DOS does not get support from Microsoft anymore:
exposed to system malware
DOS cannot catch up with the evolved needs at
stores
Hardware vendor might upgrade their machines
which are not DOS-compatible
Shipments and sales were not recorded perfectly
under the old system
Hardly to monitor the stocks; thus open the room for
theft, damage, and other losses
Centralized data may help to expand in different
countries
The expansion of Zara in Asian continent would
require new system
35. CFV Project - MAPI 9/22/2014
35
Solving the problem
Should the project to revenge the IS be fully or practically externalize?
18,000 hours
Basic assumption for
the IT investment
Assuming that only 10 people are devoted to
POS software
10 people are available to handle the project working 8
hours a day
Estimated project timeline is 7 months
Would take too much time to set up this project.
However, notices that they have the skill to handle
perfectly the project
Assuming we outsource the project
Faster timeline but will be more costly
Have to integrate a training system of the staff to lower
the outsourced fees
However, not sure if it match Zara’s IT policy as it
always develops its own IT solution
Proposal
Partially outsourced assisted by internal IT staffs
Faster timeline and lowering the professional fees
36. CFV Project - MAPI 9/22/2014
36
Solving the problem
Which solution would you recommend and why
The change of old system is unavoidable
DOS is an obsolete system as Microsoft doesn’t
support the system anymore
POS terminal will not be compatible with the
current POS software
PDAs used in all Zara stores and POS terminals
are not connected with Zara’s HQ or with other
stores
No in-store connection to link employees’
information like daily sales and the employees
have to copy this information on a disk
Windows as the preferred solutions
Noticed that UNIX provided the cheapest fees
But Windows is the leading player on the IT
solutions and has been tested
37. CFV Project - MAPI 9/22/2014
37
Solving the problem
The Calculation
CAGR of 22% calculated using past data of 1996-2002
Rest of the costs such as COGS, operating costs are calculated based upon past data
Migration to Windows based POS will cause net margin decreases to 9.98% but well
above average net margin of 8.29%
Cost of system upgrade can be funded through cash & cash equivalent of 525 million
Euros