Zara Case Study

Zara – Case Study

Table of Contents

1.0 Executive Summary 2

2.0 Issue Identification 4

3.0 Environmental and Root Cause Analysis 4

4.0 Options 6

5.0 Recommendations 9

6.0 Implementation 9

7.0 Monitor and Control 10

8.0 Conclusion 11

1.0 Executive Summary

I recently had dinner with Bruno Sanchez Ocampo where we had a discussion regarding the possible upgrading of Zara’s point-of-sale (POS) terminals to units that operate in the modern Windows Operating System (OS). Zara’s current POS terminals run on the Microsoft Disk Operating System (DOS).

As the largest retail chain established by Inditex, Zara generates 73.3% of the group’s sales. With the ability to quickly respond to the demands of their target customers, young fashion-conscious city dwellers, Zara are able to produce and deliver styles while they are still hot. Zara has three departments (Men, Women, and Children), each department, at corporate level in La Coruna, is managed by a group of “commercials”. Commercials consisted of two project managers and two designers, they are responsible for purchasing material, production orders and setting garment prices. Another group of commercials, called store product managers, travel extensively to observe current fashion trends and to discuss sales with store managers. Store project managers have the ability to transfer garments from store-to-store, based on the current sales trends in each geographic location. Store project managers report their finds to the project managers and designers for development of new designs or to re-order garment(s) that are popular. As a result, Zara’s clothing line changed continuously throughout the season, 75% of garments in the average store are changed over a period of three to four weeks. The constant influx of new designs produce two positive results in store sales and traffic, firstly, shoppers would buy garments on the spot to ensure that the did not miss out on the garment, and...