Theorems

Issue Identification

Immediate Issues

Costs to upgrade and support the new systems as well as the risk of failure

Systemic Issues

DOS no longer supported by Windows Timing: Immediate

Risk: High

POS terminal vendor has assured they will not change and obsolete DOS as well. However, they have indicated that Zara is the last customer still using DOS and contract negotiations to include some assurance failed.

Changing over all current Zara stores to new POS Timing: Short - Long term

Risk: High

The trial basis would include the switch of three Zara stores, as well as all newly opened Zara stores would include new POS terminals. This will be labor intensive and likely result in a needing to hire additional employees for IT support

Continued Growth Timing: Mid to Long term

Risk: Moderate - High

Executives want to focus on the continued growth within Zara’s current market. Italy is a focus of expansion, the rollout of the new POS and a trial store in Italy will help give Zara more market research and a good indication of The Italian market in terms of time, effort, and the difficulties that will be encountered

IT Support and Service Timing: Short - Long term

Risk: Moderate

New POS systems will create an increasing demand for IT support and service. The most important issue will be keeping the installed programs up to date, this will result in a large initial investment that can be seen tapering off and resulting in a lower maintenance cost over the long run.

Environmental and Root Cause Analysis

Qualitative Analysis

Zara has a vertically integrated system in place, its ability to quickly adapt and change to the market place allows it to be one step ahead of the competition. Inditex has shown an increase in their net margin operating results over 2001, and 2002 equal to €97 MN and an addition of 274 stores.

Zara offers competitive advantages over its...