Case Study Zara

• Discuss how Zara has been able to create a sustainable competitive advantage

Zara has been able to create competitive advantage through various ways;

a) Strong distribution network

Zara established a strong distribution network management.

i) It takes a short time, about 24 hours, to deliver the products to European stores (Documents Exchange, n.d). ii) The shipment was also done twice per week. iii) The lead time for goods was shorter than the competitors like H&M.

b) Creative product designs

Zara’s product designs are controlled by the customer demands. This implies that Zara creates value for the customers. Those in the field collect data on customer preferences and send the information directly to the “cube” where the clothes are designed

The mobile tracking also monitors the orders in channels of distribution by the customers and the various stores’ managers.

b) Facilitates communication.

Use of technology and information systems facilitates communication across the company. This involves the designers, those in the field scouting for consumer preferences, those in logistics, production personnel and the management at large.

Zara’s staff and store managers use the Point-of-Sale (POS) systems and Personal Digital Assistants (PDAs) to gather and analyze data from customers regarding their preferences and then do the designing.

Technology, in general, speeds up the complex tasks, lowers the cycle time and minimizes errors.

Discuss where Zara has succeeded where others such as Gap have failed… consider what role, if any information systems play in this success.

a) Centralized production

i) Many competitors of Zara outsource manufacturing to low-cost countries. However, Zara has maintained in-house production where manufacturing is done at the cube in

Additionally, since Zara keeps a close eye on the changing preferences and tastes of the consumers, they store less inventory. This is the opposite of the competitors like Gap who had to sell products in the stores for many years. This implies that the company was not in production and may even write off items. PDAs maintains the orders and helps production of clothes to meet the order. This leads to controlled inventory management at Zara.

• Discuss how Zara creates and maintains a relationship with their customers. Consider the role that technology plays in facilitating the relationship with the customer. Discuss how other firms in other product groups or industries might use these same techniques to develop deeper relationships with their customers.

a) Zara creates a relationship with customers by meeting their demands.

b) Zara designs what the customers’ needs, according to their preferences.

c) The clothes are timely delivered to the stores.

d) At the end of the working day, the staff does the forensics of the trendspotting to see which clothes were touched and not bought. This helps them to make informed decisions like color among others. When this is corrected, the Zara maintains the