Chapter 3 Team Critique
Zara: Fast Fashion From Savvy
Systems
Brandi Muller, Leelina
Dagim, and Chenmei Quian
Stated Objectives
1. Competitive Advantage: Understand how Zara’s parent
company, Inditex, leveraged a technology-enabled strategy to
become the world’s largest fashion retailer.
1. Zara’s production process: Contrast Zara’s approach with the
conventional wisdom in fashion retail, examining how the firm’s
strategic use of information technology influences design and
product offerings, manufacturing, inventory, logistics, marketing,
and ultimately profitability.
1. Traditional Industry Costs: Detail how Zara’s approach
counteracts several profit-eroding challenges that many fashion
retailers struggle with.
1. Environmental Threats: Identify the environmental threats that
Zara is likely to face, and consider options available to the firm for
addressing these threats.
Footnotes of Value
1.
None
Critique
1)
How did Inditex use an information
technology strategy to gain a
competitive advantage? Inditex used PDAs
and a high tech point of sales system to track
consumer preferences and allow managers to
make quicker more efficient decisions.
1)
How does Zara’s business strategy differ
from the strategies of its competition?
Zara is very vertically integrated which allows
it to improve coordination among suppliers,
optimize their inventory, and use just-in-time
manufacturing.
Critique Continued
3.
How did Zara use information technology to
counteract the traditional costs of fashion
retail? Zara increases the chance that customers will
buy full price quickly and return to the store using a
high tech point of sales system and highly automated
factories. The use of technology to detect mid season
fashion changes, optimize inventory, and send certain
products to certain stores increases the exclusivity of
Zara’s products.
4.
What threats will Zara face ? How can they overcome them? The firm is vulnerable to disruptions in
the region and currency fluctuations since all of Zara’s production is in one place. Zara is also vulnerable to
transportation costs. Zara has to continually look for new opportunities to use developing state of the art
technology to keep its competitive advantage.