Zara Case

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KEY INFORMATION : ZARA

 Zara was founded by Amancio Ortega in 2003 in Spain .  Ortega had started in 1963 with clothing factories.

 First zara store in La Coruña in 1975.

 Zara goal was to link customer demands to manufacturing and link    

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manufacturing to the distribution . Zara uses o0.3% of revenue for its marketing expenditure (3%-4% competitors ). Invest heavily on prime store locations and store layout . Store inventory changes frequently : 75% of the merchandise is changed three to four week. Major investment on prime store locations & store layout . Low investment in IT / own accounting software / lack of commercial software's.

MAJOR ISSUES IN ZARA

 ZARA current OS (DOS) is outdated ,Microsoft has stopped providing

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support for DOS anymore . In future vendors planning for updating the OS to its latest version . It wont be compatible with the Zara (DOS) anymore . Opening of new store will require the OS and Microsoft is not providing any support for DOS . Lack of information sharing / inventories cost / low internet use . Lack of commercial software‘s / Own accounting software. Zara spent little on internet advertising. Redundancy in PDA . Limitation in real time communication between dealer and supplier .

STRATEGY :

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Zara uses the outdated OS (operating system), and all operations such as customer ordering, order fulfillment and design manufacturing, and the in store operations (payment / returns)are not that efficient. By implementing IT solutions or upgrading its OS from DOS to windows they can enhance there process more effectively and it gives them competitive edge as compared to their competitors.  Also it will helps ZARA to keep track of changing customer needs / fashion trends and respond in a better way .  Better customer service results in more value to the brand recognition resulting in adding new customer and more profit margin.

BENEFITS IMPLEMENTING SCM

 ZARA goal was to link...