Teaching Guide to What Business is Zara In? Curriculum Web February 12, 2009 What Business is Zara In? A Curriculum Web created by Professor Daniel Doiron Aim The What Business is Zara In? curriculum web will build confidence in fourth year BBA or MBA students to construct an understanding of how companies compete in an industry via analyzing their business models. Through this process students will build skills which will enable them to confidently study an industry and draw key conclusions of how companies can effectively compete within that industry. This is more easily accomplished by studying companies who have introduced disruptive business models into their industries, like Zara, Southwest Airlines, Wal‐Mart or Dell. Introduction Zara is one of the most successful apparel manufacturing and retail business in the world today. They are not the biggest, but their profit margins and growth rates are leading the industry. Most interesting though is that they have accomplished this through the introduction of a very unique business model within their industry. Let’s find out how they did it . . . Rationale Graduates with business degrees or MBA’s too often are led to analyze problems or opportunities through narrowly focused functional silos like operations management, marketing, distribution, financial management or supply chain management. They are taught to perform SWOT analysis, which can build long lists of external and internal factors which are rarely put in context of the industry and the company’s competitors. The proper approach starts with an understanding of how the business model for an industry works. When students have a picture in their minds of how an industry works, from a broad perspective, they can more easily solve a problem or address an opportunity any one stakeholder or company in that industry is facing. © Daniel Doiron (2009) Page 1 of 9 Teaching Guide to What Business is Zara In? Curriculum Web February 12, 2009 Building this kind of perspective is difficult for students, who have little business experience. The use of business cases is one effective method to help students engage in this kind of high level thinking. Business cases typically describe a situation in which a company finds themselves. It is the job of the instructor and students to dissect the situation and build to a solution for the problem or opportunity. The instructor will usually begin the in‐class discussion of the case by attempting to build an understanding of the industry and then build a picture of how the company fits within that particular industry. This top down approach can be very difficult to execute successfully, with the industry analysis usually taking up at least half of the class time allotted to the case discussion. A curriculum web will not replace an in‐class case analysis and discussion, but it can better prepare the students for this discussion. Specifically it can help the students to understand the dynamics of the industry and the business model which is driving the companies within that particular industry. This will better prepare the students for the class discussion and more importantly, free up the class time to focus on the company, discuss and ultimately analyze various solutions to the problem at hand. Zara is a perfect case to exemplify how this concept can work as they have introduced a very successful, yet simple, business model, into a complex industry – fashion apparel manufacturing and retailing. Their approach to succeeding in this industry is radical, yet easy to understand. Students can be led to answer the question at hand – What Business is Zara In? In doing so they will gain an understanding of how Zara’s business model is radically different than that of their competitors. The fun part of this case is the answer to the question is a two word answer, which when discovered is almost always is an aha moment for the learner. Building this understanding will help them gain the confidence to look at other companies, in other industries, from a broad perspective. General Goals The curriculum web was developed by Daniel Doiron as part of BA4101 Competitive Strategy, which is a fourth year capstone course in an undergraduate Business degree program. One of the primary goals of the course is to help the students learn to look at business from a broad, overarching perspective. This is accomplished in part through the delivery of in‐class © Daniel Doiron (2009) Page 2 of 9 Teaching Guide to What Business is Zara In? Curriculum Web February 12, 2009 strategic business case studies. One of the case studies used is the Harvard Business School Case ‐ Zara: IT for Fast Fashion. Zara is a fashion manufacturer and retailer based out of Spain. They are the most profitable in the world when you consider their profit margins, although they are far from the largest. Zara has adopted a very unique approach to the market, through a disruptive business model. Identifying this model is key to understanding their success and ultimately their unique approach to fashion retailing. The goals of this WebQuest are to have the students build an understanding of the business model for the industry and then understand the unique approach or business model of Zara. This WebQuest will be used in preparation for an in‐class case discussion. Subject Matter Description This web is a problem centered curriculum, which is trying to answer what at first glance seems like a very simple question – What Business is Zara In? It is centered on understanding how Zara approaches their business, to better help the student build skills in analyzing and observing an industries business model and ultimately learning to look at business from a broad, overarching perspective. This web involves the exploration and understanding of: •
A competitors approach and business model to the apparel manufacturing and retailing business by looking at Gap. •
Understanding the key core competencies of Zara. •
Understanding the supply chain management capabilities and practices at Zara. •
Recognizing the strong beliefs or overarching principles that guide the business and how they are weaved into the company’s strategy and business model. •
Recognizing the role key employee groups play in the company. •
Ultimately recognizing the difference in Zara’s approach to the business •
Seeing how a different approach to business can lead to superior results •
Understanding how business risk can be almost completely mitigated through the proper strategic approach © Daniel Doiron (2009) Page 3 of 9 Teaching Guide to What Business is Zara In? Curriculum Web February 12, 2009 Learner Description
The activities in this curriculum web are designed for fourth year Bachelor of Business
students or MBA students taking a Competitive Strategy or Managing Innovation course. They
will be familiar with and will have used business or situational analysis techniques, such as
performing SWOT analysis. They will also have knowledge of functional business topics, such
as marketing, finance, operations management, manufacturing, and human resources
management. They typically do not have much “real world” business experience. This
curriculum web is designed to be used in conjunction with the Harvard Business School Case Zara: IT for Fast Fashion. As this case study can be presented from a number of different
business contexts, including strategic business growth, managing innovation, human resource
management, competing globally and implementing disruptive business models, the audience for
this web could potentially vary widely. For example, this case and curriculum web could be part
of a seminar series being delivered to management employees at a large enterprise or to a group
of technology entrepreneurs trying to understand how to grow their business globally.
Prerequisites Students taking this curriculum web will typically be in the fourth year of a Bachelor of Business program or in an MBA program. They will have had previous experience in case study management and have a foundation of knowledge in core functional business areas, such as operations management, supply chain management, financial management and marketing. They will understand the basic notion of a “business model” and have some confidence in discussing industry level analysis. All of this educational experience can of course be replaced or augmented with experience. Learning Objectives On completing this curriculum web, students will be able to:
1. Describe the key elements of disruptive business models in the retailing, airline
and personal computer businesses.
2. Discuss the general business model for the apparel industry and describe the
inherent risks associated with this business model.
© Daniel Doiron (2009) Page 4 of 9 Teaching Guide to What Business is Zara In? Curriculum Web February 12, 2009 3. Describe the unique customer characteristics and behaviors of Zara’s customers.
Related these to the behavior drivers inherent with Zara’s approach to the
business.
4. Discuss the key core competencies of Zara and the business measures driven by
these competencies.
5. Draw a picture and provide a succinct overview of Zara’s business model. In
doing so discuss how Zara has all but eliminated risk in what is a very hard to
predict business; the fashion apparel industry.
6. Answer the question What Business is Zara In?
Materials All of the materials required for this curriculum web are available for download within the web site itself, with the exception of some of the research information, which is hosted on various other web sites and directly accessible via links. The business case itself will not be made available through the web as there are licensing restrictions with Harvard Business School Publishing which do not allow this case to be posted. It can be accessed and purchased at http://www.hbsp.com. The following documents, worksheets and interactive materials are included in the web: 1. Worksheet #1 ‐ The Question 2. Worksheet #2 ‐ Business Models 3. Worksheet #3 ‐ Customer’s & Behaviors 4. Worksheet #4 ‐ Competencies and Competitive Advantages 5. Zara Crossword Puzzle 6. Zara Word Scramble 7. Teaching Guide for What Business is Zara In? 8. Imbedded Video – Clayton Christensen at MIT Computer Technology Requirements
© Daniel Doiron (2009) Page 5 of 9 Teaching Guide to What Business is Zara In? Curriculum Web February 12, 2009 This curriculum web contains a number of interactive and multi-media features. For
these to run smoothly the student’s computer must have an up-to-date browser, such as Internet
Explorer 7.0, the appropriate Java run time application (which is typically embedded in IE 7.0),
Flash player to view a streaming video and a copy of Adobe Reader. Parts of this curriculum
web will not function properly if the user does not have a broadband connection to the internet.
Certain interactive applications have been duplicated onto Adobe pdf files for students unable to
run the Java applications, either due to an insufficient browser or security measures on their
computer which will not allow them to turn on the “Active X” capability required for the web.
All of this required capability is available on the University computers in the computer
labs or libraries.
Instructional Plan
Students should be able to complete this web prior to the class discussion of the Zara
case. This can be done in the computer labs on campus or at home. This web is designed to be
executed by students individually. However, there is no reason why they could not do it in
groups. It should take 4 - 5 hours to complete the research, all the worksheets and activity sheets,
including the interactive crossword, word scramble and watch the online video of Clayton
Christensen. These are all accessible and downloadable through the curriculum web. This will
prepare the students to present a supported answer to the question What Business is Zara In?
Plans for Assessment & Evaluation As part of the assessment students will be required to complete and submit four
worksheets, an interactive crossword puzzle and word scramble and prepare and present a power
point presentation to class.
The following rubric has been designed to assess each of the learning objectives, with appropriate
weighting on sections of greater importance, complexity or relevance to the overall learning goals
of the curriculum web. Please note item numbers in the rubric should correspond to the
associated learning objective, with the exception of the final presentation, which will demonstrate
all of the learning objectives.
© Daniel Doiron (2009) Page 6 of 9 Teaching Guide to What Business is Zara In? Curriculum Web February 12, 2009 Rubric for Evaluating the Learning Objectives for What Business is Zara In?
Learning
Assigned Task
Incomplete
Complete
Objective
1.
Disruptive
Business Models
Enthusiastic
Score
Learner
0 points
2 points
4 points
Complete
No submission or
Good
Apply disruptive
Section 1 of
poor research as
understanding of
litmus test to each
Work Sheet 2
evident by
at least two key
of the three
misunderstanding of
elements all three
business models.
disruptive business
disruptive
models.
business models.
0 points
4 points
8 points
Complete
No submission or
Good
Strong
Section 2 of
poor research as
understanding of
understanding of
Work Sheet 2
evident by
apparel industry
the apparel
misunderstanding of
business model as
industry business
the apparel industry
evident by
model through
business model.
pictorial view and
concise pictorial
description of
view which
three key
demonstrates
elements of the
strong research
model.
into Gap’s
2.
Apparel Industry
Business Models
approach to the
business.
3.
Customer
0 points
1 point
2 points
Complete Work
No submission or a
Strong discussion
Strong links
Sheet 3
basic regurgitation
supporting facts
between customer
of facts from case.
from the case.
characteristics and
characteristics &
behaviors with an
behaviors
eye to the driving
factors.
4.
0 points
3 points
6 points
Zara
© Daniel Doiron (2009) Page 7 of 9 Teaching Guide to What Business is Zara In? Curriculum Web February 12, 2009 Competencies and
Business
Complete Work
No submission
Sheet 4
Measures
Students show an
Students show an
understanding of
understanding of
at least three key
at least three key
core
core competencies
competencies of
of Zara and links
Zara.
these to achieving
core business
measures and
results.
5.
Zara Business
0 points
6 points
12 points
Complete
No submission or
Good
Strong
Section 3 of
complete lack of
understanding of
understanding of
Work Sheet 2
understanding of the
Zara’s business
Zara’s business
uniqueness of Zara’s
model.
model, which is
Model
business model.
well
communicated
through a pictorial
representation.
Interactive
Exercise
0 points
4 points
8 points
Complete Zara
No submission or
Completed
Completed
Crossword
incomplete
crossword.
crossword and
Puzzle
crossword.
unscrambled letter
puzzle with
correct two word
answer to the
question.
6.
What Business is
Zara In?
0 points
5 points
10 points
Answer(s) on
No submission or
Right answer.
Right answer
Work Sheet 1
wrong answer.
showing a strong
sense of what it
means.
What Business is
0 points
10 points
20 points
Zara In?
© Daniel Doiron (2009) Page 8 of 9 Teaching Guide to What Business is Zara In? Curriculum Web February 12, 2009 Presentation
Class
No submission
presentation
Good succinct
Good succinct
presentation
presentation
showing a strong
showing strong
understanding of
understanding of
the uniqueness in
the uniqueness in
Zara’s business
Zara’s business
model.
model and
discussion on why
this is a disruptive
business model
and how Zara has
all but eliminated
the core risks
associated with
the industry
through this
model.
Total Score
/70
The answers to the worksheet questions will lead to completion of the crossword and to the answer to the question at hand. The students ability to answer the question AND describe its relevance as a disruptive business model will be key deterministic factors in their learning achievement. Also, student’s ability to simply and accurately describe the different risk profiles of the two business models is also a key deterministic factor. © Daniel Doiron (2009) Page 9 of 9