Zara is by far the largest, most profitable, and most internationalized of the chains.

Zaras marketing strategy focuses on product variety, speed-to-market, and store location. Zaras success is based on a business system that depends on vertical integration, in-house production, quick response, one centralized distribution center, and low advertising cost all of which made it so successful thus far. Zara faced tough competition internationally with companies including H&M, Gap, and Benetton. 3. Collecting vital information, such as daily sales numbers, allow designers to approximate what types of fashions are selling well. The designers have real-time information available when deciding which type of fabric, cut, and colors to use when designing new clothes or modifying existing ones. IT advantage has shortened the time it takes to go from design conception to the time of arrival at the distribution centers and finally to the stores to be placed on racks. 4. DESIGN SOURCING ANDRETAILING MANUFACTURING DISTRIBUTION 5. DBMS ERP SQL , Oracle SAP ,people softCENTRALIZED SERVER RFID NAPSTER 6. Sourcing and manufacturing About 40% of finished garments were manufactured internally, and of the remainder, approximately two-thirds of the items were sourced from Europe and North Africa and one-third from Asia. The most fashionable items tended to be the riskiest and therefore were the ones that were produced in small lots internally or under contract by suppliers who were located close by, and reordered if they sold well. More basic items that were more price-sensitive than time sensitive were particularly likely to be outsourced to Asia, since production in Europe was typically 15%20% more expensive for Zara. 7. DESIGN The teams used information systems to track customer preferences and sales Zaras store managers lead the intelligence gathering effort that ultimately determines what ends up on each stores racks. Digital assistants (PDAs) are used to gather customer input, staff regularly chat up customers to gain feedback on what theyd like to see more of. The valuable data allows the firm to plan styles and issue re-buy orders based on feedback rather than hunches and guesswork. The goal - to improve the frequency and quality of information system allows for the best design trends. 8. Sources of Information POS data Industry Publication TV Internet University Campuses 9. Zara uses software like C-Design and Corel Draw. Based on the power of CorelDRAW Graphics Suite, C-DESIGN Fashion is a computer assisted design (CAD) and technical pack tool that allows ZARA to create and merchandise its collections quickly and efficiently. Customers can choose a single software solution that supports the full creative lifecycle including design, textile drawing, technical packages, collection plans, line sheets and visual merchandising.

10. Distribution Zara has its own centralized distribution system.Sources of Information Centralised Distribution System Mobile Tracking Systems PDA Distribution center in La Coruna 11. Vertical integration Zara defies most of the current conventional wisdom about how supply chains should be run. Zara keeps almost half of its production in-house and uses smart technologies to have a competitive advantage. Rather than chase economies of scale, Zara manufactures and distributes products in small batches 12. Instead of relying on outside partners, the company manages all design, warehousing, distribution, and logistics functions itself. It uses latest technologies to keep up with latest trends. Under computerized system, the company reduced its design to distribution process to just 10 to 15 days. 13. The IT implementation of the OR models was relatively challenging, in that it required establishing dynamic access to several large, live databases (store inventory, sales, and warehouse inventory) to compute, under very stringent time constraints, many decisions that are critical to the companys distribution activities 14. About three-quarters of the merchandise on display is changed every three to four weeks, The average time between visits given estimates that the average Zara shopper visited the chain 17 times a year, compared with an average figure of three to four times a year for competing chains and their customers. 15. Promoting Quick response Coordination between retailing and manufacturing Sales and trend forecasting Marketing Strategies for different markets The aggregated demand is ascertained and the supply is allocated according to past performance of the various garments at the stores 16. Pricing was market-based. Zara uses information systems for customer profiling, to analyze the purchase patterns and direct targeting The company is able to more quickly respond to fluctuating customer demands in fashion trends. Zaras Unique Selling Proposition (USP) is to create or imitate the latest trends within a short two-week period Zara uses policy of zero advertising the company preferred to invest a percentage of revenues in opening new stores instead. Zaras marketing strategy is very effective because of its 1) affordable prices 2) unique response to market demands. 17. Challenges can be broadly seen under the following heads: People Data Process Software Devices 18. The resistance of change to new process methods by management and supervision. Inadequacy, inconsistency in the requirements agreed upon at the planning phase of the IS design phase and the actual requirements fulfilled by the system. General lack of user acceptance when the System has gone live. Inadequately educating the workforce to operate the new system properly. Possible changes to kitting demand during go live may stretch the new system and those operating it on a learning curve beyond capacity.

19. Values between the systems were incorrect, so comparisons need to be made on the values from the legacy system with those on the new system. Possible failure to cut over to the new system through the inappropriate systems testing of volume, stress and data conversion. User authorization problems, such as, password and user level clearance. Temporary halt of work on the stores due to unavailability of systems. 20. Transaction problems while dealing with multiple systems and problems in accurate communication between diverse systems. The possible failure of providing inadequate and ongoing support after implementation. Maintenance difficulties may occur on bridged legacy systems and with external partner systems. Issues may occur in the security implementation and encryption of the data being transmitted. 21. At Zara PDAs were used primarily for ordering and for tasks such as handling garment returns to distribution centers and transmitting information to all the stores. The PDAs may result in problems of lack of expertise in staff which may lead to manhandling of the device. Connectivity issues may be there between PDA and the main backend system. Proper maintenance activities need to be regularly carried out for each store location. 22. The POS terminals used at ZARA stores used back dated DOS operating system that was no longer supported by Microsoft. This could lead to problems if in future the hardware vendor decides to upgrade its software. The employees had to copy daily sales data from each terminal onto a floppy disk and then carried these disks to one modem-equipped terminal to accomplish the data. This could lead to serious implementation issues from human errors of copying sales data. 23. The IS at ZARA need to use sophisticated mathematical models to generate Optimal Solution and Plans. Hence a better software with the necessary capabilities will be required. The data from the Customer Relationship Management System (CRM) can become cumbersome and difficult to understand for an ill-trained user. The IS needs to be able to handle multiple access to the system from varied geographical locations simultaneously. The roles of each individual accessing the system needs to be clearly defined and appropriate rights and privileges need to be administered. 24. Accurate capturing and storing data from multiple points need to be ensured. Gaps may occur while transmitting data between various systems in an IS leading to inconsistencies. Data theft and other data loses may occur if the data is not secured.

What does Zara make? Where do they make it? Where do they sell? How does Zaras unique global organization make it more competitive? What does Zara offer customers that is different from other stores? 11- Copyright 2010 - Roula Jannoun- BAU 3. Conceived To Make What We Sell Vs. Sell What We Make The Concept of the Right Product, in the Right Place, at the Right Time, for the Right Price Pioneered New Style of Quick, Custom-Made RetailingCheap Chic or Retail at the Speed of Fashion Cutting Edge Design; Multiple Inputs Live Collections designed, sourced, manufactured, distributed, sold in 2 weeks State of the Art Factory and Logistics Store Fronts and Location are Medium Geographic Price Policy Speed, Customization, Information Technology Continuous Exchange of Data from stores to multilingual design, mfg, operations staff Key to Growth: Finding the Right People with Right Mindset Copyright 2010 - Roula Jannoun- BAU 4. Growth The firm tripled in size between 1996 and 2000 Its earnings skyrocketed from $2.43 billion in 2001 to $13.6 billion in 2007. By August 2008, sales edged ahead of Gap, making Inditex the worlds largest fashion retailer While the firm supports eight brands, Zara is unquestionably the firms crown jewel and growth engine, accounting for roughly twothirds of sales. Copyright 2010 - Roula Jannoun- BAU 5. Zaras Popularity Zaras duds look like high fashion but are comparatively inexpensive (average item price is $27, although prices vary by country). A Goldman analyst has described the chain as Armani at moderate prices, Legions of fans eagerly await Z-day, the twice-weekly inventory delivery to each Zara location that brings in the latest clothing lines for women, men, and children . Copyright 2010 - Roula Jannoun- BAU 6. Zara's five-point marketing approach to reach its customers Store location: The company always tries to find the perfect location and ensure its brand is visible to as many people as possible Store window: The first meeting point with the customer and the place where Zara advertises the next season's look Interior design and store image: Has to be right every time. Zara renews this image every six to eight months in all of its stores Goods display: A dedicated team of co-ordinators display the collections by showing off the best trends, fabrics and colours Customer service: Something Zara believes it's excellent at. The aim is to have as much personal contact with the customer as possible. Copyright 2010 - Roula Jannoun- BAU 7. Stores Spain : 504 stores France : 118 stores Italy : 90 stores Portugal : 82 stores United Kingdom : 65 stores Germany : 65 stores Japan : 48 stores Mexico : 48 stores Greece : 47 stores United States : 46 stores China : 35 stores Russia : 32 stores Belgium : 26 stores Brazil : 26 stores Poland : 26 stores Turkey : 26 stores Saudi Arabia : 21 stores Israel : 19 stores Canada : 18 stores Netherlands : 15 stores South Korea : 15 stores Colombia : 12 stores Austria : 11 stores Venezuela : 11 stores Sweden : 10 stores Switzerland : 10 stores Ireland : 9 stores Romania : 9 stores Argentina : 8 stores Indonesia : 8 stores United Arab Emirates : 8 stores Chile : 7 stores Singapore : 7 stores Czech Republic : 6 stores Philippines : 6 stores Hungary : 5 stores Kuwait : 5 stores Malaysia : 5 stores Thailand : 5 stores Cyprus : 4 stores Finland : 4 stores Latvia : 4 stores Lebanon : 4 stores Lithuania : 4 stores Morocco : 4 stores Norway : 4 stores Serbia : 4 stores Slovenia : 4 stores Ukraine : 4 stores Denmark : 3 stores Egypt : 3 stores Bahrain

: 2 stores Costa Rica : 2 stores Croatia : 2 stores El Salvador : 2 stores Estonia : 2 stores Guatemala : 2 stores Honduras : 2 stores Iceland : 2 stores India : 2 stores Jordan : 2 stores Luxembourg : 2 stores Panama : 2 stores Qatar : 2 stores Slovakia : 2 stores Syria : 2 Stores Tunisia : 2 stores Uruguay : 2 stores Uzbekistan : 2 stores Andorra : 1 store Bulgaria : 1 store Dominican Republic : 1 store Kazakhstan : 1 store Malta : 1 store Monaco : 1 store Montenegro : 1 store Oman : 1 store Pakistan : 1 store Puerto Rico : 1 store Copyright 2010 - Roula Jannoun- BAU

8. How Does Zara coordinate its value chain? Designed in Europe, near fashion other designers. Centrally located manufacturing in Latin America and distribution. Used basic fabric that can be changed quickly and easily for rapid production. 11- Copyright 2010 Roula Jannoun- BAU 9. Examples The Spanish manufacturer Zara has a simple business model that provides a significant strategic advantage. Their system links demand to manufacturing and manufacturing to distribution. Customers visit up to 17 times per year to check on new items that may have arrived. Since products are limited customers will immediately purchase products they like. Loyal and satisfied customer base. Copyright 2010 - Roula Jannoun- BAU 10. Zara aligns its information system strategy with its business strategy. The POS system sends daily updates to Zaras headquarters. Managers report to designers what sold and what customers wanted but couldnt find. The information is used to determine what to keep and what to discontinue or change. New designs can be ordered twice a week. The entire process is automated so that new designs and products can be created quickly. Copyright 2010 - Roula Jannoun- BAU 11. Zara and consumer behaviour Products are a means to an end but what ends do we choose product specific goals based on personality, self image, beliefs, attitudes Hot fashions reflecting consumers self image undersupplied to add exclusivity and urgency to shop Sold in fashionable, prestigious, regularly refurbished locations to retain contemporary appeal and reinforce responsiveness Informed by cool hunters who feedback, lifestyle and directional fashion trend information Copyright 2010 - Roula Jannoun- BAU 12. Pricing to market At the Zara stores, price tags stated in many currencies and for multiple countries so customer feel equality . Copyright 2010 - Roula Jannoun- BAU 13. How Does Zara Do It Store Staff Zaras store managers lead the intelligence-gathering effort that ultimately determines what ends up on each stores racks. Armed with personal digital assistants (PDAs) to gather customer input, staff regularly chat up customers to gain feedback on what theyd like to see more of. A Zara manager might casually ask, What if this skirt were in a longer length? Would you like it in a different color? What if this V-neck blouse were available in a round neck? Managers are motivated because as much as 70 percent of salaries can come from commissions. Copyright 2010 - Roula Jannoun- BAU 14. The Store Staff As soon as the doors close, the staff turns into a sort of investigation unit in the forensics of trend spotting, looking for evidence in the piles of unsold items that customers tried on but didnt buy. Are there any preferences in cloth, color, or styles offered

among the products in stock? PDAs are also linked to the stores point-of-sale (POS) system that captures customer purchase information. In less than an hour, managers can send updates that combine the hard data captured at the cash register with insights on what customers would like to see. All of this valuable data allows the firm to plan styles and issue rebuy orders based on feedback rather than hunches and guesswork. The goal is to improve the frequency and quality of decisions made by the design and planning teams. Copyright 2010 - Roula Jannoun- BAU

15. The Designers Data on what sells and what customers want to see goes directly to The Cube (central command of the Inditex Corporation outside La Corua0), w here teams of some three hundred designers crank out an astonishing thirty thousand items a year versus two to four thousand items offered up at big chains like H&M (the worlds third largest fashion retailer) and Mango, Individual bonuses are tied to the success of the team, and teams are regularly rotated to cross-pollinate experience and encourage innovation. Copyright 2010 - Roula Jannoun- BAU 16. Quick Turnaround In the world of fashion, even seemingly well-targeted designs could go out of favor in the months it takes to get plans to contract manufacturers, tool up production, then ship items to warehouses and eventually to retail locations. Zara excels in getting locally targeted designs quickly onto store shelves When Madonna played a set of concerts in Spain, teenage girls arrived to the final show sporting a Zara knock-off of the outfit she wore during her first performance. The average time for a Zara concept to go from idea to appearance in store is fifteen days versus their rivals who receive new styles once or twice a season. Smaller tweaks arrive even faster. Zara is twelve times faster than Gap despite offering roughly ten times more unique products! At H&M, it takes three to five months to go from creation to deliveryand theyre considered one of the best. Other retailers need an average of six months to design a new collection and then another three months to manufacture it. At Zara, most of the products you see in stores didnt exist three weeks earlier, not even as sketches. Copyright 2010 - Roula Jannoun- BAU 17. Quick Turnaround The firm is able to be so responsive through a competitor-crushing combination of vertical integration and technology-orchestrated coordination of suppliers, just-in-time manufacturing, and finely tuned logistics. Vertical integration is when a single firm owns several layers in its value chain A value chain is the set of activities through which a product or service is created and delivered to customers. Copyright 2010 - Roula JannounBAU 18. Quick Turnaround While H&M has nine hundred suppliers and no factories, nearly 60 percent of Zaras merchandise is produced in-house , with an eye on leveraging technology in those areas that speed up complex tasks, lower cycle time, and reduce error. Profits from this clothing retailer come from blending math with a data-driven fashion sense. Inventory optimization models help the firm determine how many of which items in which sizes should be delivered to each specific store during twice-weekly shipments, ensuring that each store is stocked with just what it needs. Outside the distribution center in La Corua, fabric is cut and dyed by robots in twenty-three highly automated factories. Copyright 2010 - Roula Jannoun- BAU

19. Quick Turnaround Zara makes 40 percent of its own fabric and purchases most of its dyes from its own subsidiary. Roughly half of the cloth arrives undyed so the firm can respond as any midseason fashion shifts occur. After cutting and dying, many items are stitched together through a network of local cooperatives that have worked with Inditex so long they dont even operate with written contracts. The firm does leverage contract manufacturers (mostly in Turkey and Asia) to produce staple items with longer shelf lives, such as t-shirts and jeans, but such goods account for only about one-eighth of dollar volume. Copyright 2010 - Roula Jannoun- BAU 20. Shipping Trucks serve destinations that can be reached overnight, while chartered cargo flights serve farther destinations within forty-eight hours. The firm recently tweaked its shipping models through Air FranceKLM Cargo and Emirates Air so flights can coordinate outbound shipment of all Inditex brands with return legs loaded with raw materials and halffinished clothes items from locations outside of Spain. Zara is also a pioneer in going green. In fall 2007, the firms CEO unveiled an environmental strategy that includes the use of ren ewable energy systems at logistics centers including the introduction of biodiesel for the firms trucking fleet. Copyright 2010 - Roula Jannoun- BAU 21. Limited Production Limited runs encourage customers to buy right away and at full price. Savvy Zara shoppers know the newest items arrive on black plastic hangers, with store staff transferring items to wooden ones later on. Within three weeks, either an item has been sold or moved out to make room for something new. A study by consulting firm Bain & Company estimated that the industry average markdown ratio is approximately 50 percent, while Zara books some 85 percent of its products at full price. Copyright 2010 - Roula Jannoun- BAU 22. Limited Production The constant parade of new, limited-run items also encourages customers to visit often. The average Zara customer visits the store seventeen times per year, compared with only three annual visits made to competitors. Even more impressive Zara puts up these numbers with almost no advertising. The firms founder has referred to advertising as a pointless distraction. The assertion carries particular weight when you consider that during Gaps collapse(american), the firm increased advertising spending but sales dropped. Fashion retailers spend an average of 3.5 percent of revenue promoting their products, while ad spending at Inditex is just 0.3 percent. Copyright 2010 - Roula JannounBAU 23. Limited Production Limited production runs allows the firm to, as Zaras CEO once put it reduce to a minimum the risk of making a mistake, and we do make mistakes with our collections. Failed product introductions are reported to be just 1%, compared with the industry average of 10%. Copyright 2010 - Roula Jannoun- BAU 24. Headquarters While stores provide valuable front-line data, headquarters plays a major role in directing in-store operations. Software is used to schedule staff based on each stores forecasted sales volume, with locations staffing up at peak times such as lunch or early evening. The firm claims these more flexible schedules have shaved staff work hours by 2 percent. This constant refinement of operations throughout the firms value chain has

helped reverse a prior trend of costs rising faster than sales. Copyright 2010 - Roula Jannoun- BAU

25. Headquarters Even the store displays are directed from The Cube, where a basement staging area known as Fashion Street houses a Potemkin village of bogus storefronts meant to mimic some of the chains most exclusive locations throughout the world. Its here that workers test and fine-tune the chains award-winning window displays, merchandise layout, even determine the in-store soundtrack. Every two weeks, new store layout marching orders are forwarded to managers at each location. Copyright 2010 - Roula Jannoun- BAU 26. Challenges Limitations of Zaras Spain-centric, just-in-time manufacturing model. By moving all of the firms deliveries through just two locations, both in Spain, the firm remains hostage to anything that could create a disruption in the region. Firms often hedge risks that could shut down operationsthink weather, natural disaster, terrorism, labor strife, or political unrestby spreading facilities throughout the globe. If problems occur in northern Spain, Zara has no such fall back. Copyright 2010 - Roula Jannoun- BAU 27. Challenges The firm is potentially more susceptible to financial vulnerabilities as the Euro has strengthened relative to the dollar. Zaras Spain-centric costs rise at higher rates compared to competitors, presenting a challenge in keeping profit margins in check. Rising transportation costs are another concern. If fuel costs rise, the model of twice-weekly deliveries that has been key to defining the Zara experience becomes more expensive to maintain. Zara is able to make up for some cost increases by raising prices overseas In the United States, Zara items can cost 40 percent or more than they do in Spain. Zara reports that all North American stores are profitable, and that it can continue to grow its presence, serving forty to fifty stores with just two U.S. jet flights a week. Copyright 2010 - Roula Jannoun- BAU 28. Zara's competitiveness comes from Innovation: not to stop but always producing new things based on customer desires and changes in market. Segmentation: the company took advantage of unserved segment, a segment where some one might offer good quality fashion at a reasonable price and managed to insert themselves in. Simple strategy: the company is looking for a target without analyzing ages or lifestyles, which simplifies things a lot. It targets buyers who like fashion and that is not limited by international borders. Selection of personnel: having motivated and dedicated personnel, people who think about the company 24 hours a day, people who understood this type of work from the outset. Quick response time that led to significant compression of cycle times enabled by improvements in information technology and encouraged by shorter fashion cycles and deeper markdowns. Experience regarding real estate, personnel costs, hiring and other contract negotiating. Copyright 2010 - Roula Jannoun- BAU 29. Broader Economic Conditions When the economy falters, consumers simply buy less and may move a greater share of their wallet to less-stylish and lower-cost offerings from deep discounters like Wal-Mart. Zara is particularly susceptible to conditions in Spain, since the market accounts for nearly 40 percent of Inditex sales, as well as to broader West European conditions (which with Spain make up 79 percent of sales). Global expansion will provide the

firm with a mix of locations that may be better able to endure downturns in any single region. Copyright 2010 - Roula Jannoun- BAU

30. The Importance of MIS & IT Zaras winning formula can only exist through managements savvy understanding of how information systems can enable winning strategies Many tech initiatives were led by Jos Maria Castellano, a technophile business professor who became Ortegas right-hand man in the 1980s). It is technology that helps Zara identify and manufacture the clothes customers want, get those products to market quickly, and eliminate costs related to advertising, inventory missteps, and markdowns. A strategist must always scan the state of the market as well as the state of the art in technology, looking for new opportunities and remaining aware of impending threats. Copyright 2010 - Roula Jannoun- BAU 31. Differentiation or added value strategies Provide unique or different products/services in terms of features/benefits valued by buyers Better products or services at the same price Unique, improved performance, design expertise Marketing based branding Vision Express higher perceived value Zara consumer insight Competence based service delivery John Lewis Zara, supply chain agility Copyright 2010 - Roula Jannoun- BAU 32. Differentiation strategies depend on Knowing who the customer is Knowing what the customer values Knowing who the competitors are and what they offer Knowing how customer needs change Knowing imitability of competitive advantage AND continually redefining value proposition Copyright 2010 - Roula Jannoun- BAU 33. ZARA Business Concept Integrated fashion delivery: Fashion at low cost!!! Get it approximately right Reduce creative design Define a fast-response process incl design Finalize design knowing material supply constraint Optimize the process Manage follow-up (next batch) and customer flows Store experience Copy fashion Involve the customers and his group / cohort Create a network / brand Low Cost Fashion Copyright 2010 - Roula Jannoun- BAU 34. ZARA Customer Offer: Lean and Focused Fresh / Fast Fast copying of leading styles Fast delivery in own stores Limited editions Quality Raw material: medium Knit: poor Look: grand! Customer satisfaction: fashion at low price! Cost Low monetary cost Low time cost: the Zara experience Copyright 2010 - Roula Jannoun- BAU 35. ZARA Customer Offer: Lean and Focused Flexibility: - / + Limited customer variety: only what is on display and in limited choices But every customer is participating in the process: help determine the next batch Copyright 2010 - Roula Jannoun- BAU 36. Zara Retailing strategy summary To be successful an organisation must have a clear competitive strategy Distinctive competences based on critical success factors in the value chain are the source of competitive advantage Each element of the value chain can serve to increase value; A clear understanding of customer needs, motives and patronage decisions is fundamental to retail strategy In increasingly competitive markets new ways of hearing, understanding and responding to customer needs are of vital importance Copyright 2010 Roula Jannoun- B

ZARA Zara, the most profitable brand of Inditex SA the Spanish clothing retail group, opened its first store in 1975 in La Corua, Spain operations into 45 countries with 531 stores located in the most important shopping districts of more than 400 cities in Europe, the Americas, Asia and Africa. Zara has remained focused on its core fashion philosophy that creativity and quality design together with a rapid response to market demands will yield profitable results 5. FAST FASHION 6. ZARA- Goals These goals helped to formulate a unique value proposition: to combine moderate prices with the ability to offer new clothing styles faster than its competitors. 7. ZARA- Business Model Zaras business model can be broken down into three basic components: Concept: To maintain design, production, and distribution processes that will enable Zara to respond quickly to shifts in consumer demands. Capabilities: It maintains tight control over their production processes keeping design and manufacturing in-house or with some strategic partnerships located nearby . They have strategic agreements with local manufacturers that ensure timely delivery and service. Thus, maintaining the flexibility necessary to design and produce over 12000 new items annually. Value drivers : for Zara are both tangible and intangible in the benefits that are returned to all stakeholders. Tangibly Inditex, the parent company of Zara, has 11.02% net margin on operations. Intangibly, customer loyalty and brand recognition have provided significant value to Zara. 8. Information Technology @Zara DBMS A DBMS is a set of software programs that controls the organization, storage, management, and retrieval of data in a database. E.g MySQL , Oracle ERP ERP software applications to improve the performance of organizations' resource planning, management control and operational control. e.g SAP ,people soft Centralised server managing and controlling of data and command from single point e.g Napster RFID Radio-frequency identification (RFID) is a technology that uses communication via radio waves to exchange data between a reader and an electronic tag attached to an object, for the purpose of identification and tracking. E.g Barcode detector 9. Information Technology @Zara The blend of technology Strategy enabled Zara to break all the rules in the fashion industry Zaras store managers leads the intelligence gathering efforts that ultimately determines what ends up on each stores rack. ZARA uses PDAs (personal digital assistant) to gather customer input PDAs are also linked to stores POS system, showing how garments ranked by Sales Zaras Staff regularly take feedback from customers on what they they would like to see more of.e.g colour design etc 10. IS practical Implementation , showing its potential for supporting enterprise growth 11. ZARA-IS Implementation 12. Design The company can design a new product and have finished goods in its stores in four to five weeks It can modify existing items in as little as two weeks. Shortening the product life cycle means greater success in meeting consumer preferences. Zaras capacity

to adopt to new trends, understanding differences between markets was highly relied on High frequency Information Systems. Sources of Information POS data Industry Publication TV Internet University Campuses

13. Manufacturing Highly Automated and Capital Intensive factories Developed J.I.T system incorporation with Toyota Production Scheduling Reduced Cost Transportation and production Material Requirement and Planning Fully Automated Order Application Sources of Information Internal - 20 owned factories near Spain External HK and Barcelona 14. Distribution Transportation and Logistics Route and schedule optimization Queue Management Systems for turnaround and waiting period of the ships at the docks Air Travel (Main Costs) Optimize routes to minimize cost and travel time inventory management Sources of Information Centralised Distribution System Mobile Tracking Systems PDA Distribution center in La Coruna Factories in Arteixo 15. Zaras inventory model 16. Advantages Vertical Integration Zaras Business System through the Value Chain Forward Vertical Integration Reduces Bullwhip effect Backward Vertical Integration Reduces Cost and Improves Quality 17. Retailing Sources of Information store managers decision influence on the replenishment of garments there is a heavy reliance on historical information from the store manager Promoting Quick response Coordination between retailing and manufacturing Sales and trend forecasting Marketing Strategies for different markets The aggregated demand is ascertained and the supply is allocated according to past performance of the various garments at the stores 18. Potential for supporting enterprise growth 19. Enterprise growth Correct prediction of Buying Behaviour and trend analysis Market research on university campuses, discos, mall etc. Feedback from stores Sales report Helps in taking quick decisions Regional managers analyse the collected feedback. Analysis used by designers to introduce new product line and modify existing ones Designers decide with commercial teams on fabric, cut, price of new garments. Inventory Control Distribution Constant stream of information Leads to constant input in product development process. Control early investments in raw material, direct and indirect of process and production capabilities. Communication and IT are essential in maintaining constant interface of various functions of management and production control. 20. Enterprise growth Cont Competitive Advantage Reduced Cost Reduced time and effort Customer Relations/Satisfaction Feedback Process Improvements 21. CHALLENGES ENCOUNTERED 22. People Cultural Issues Language Issues Technical Issues Procedures Solution: Provision of training. Research and analysis of various markets. Acquisition of new workforce. Recruitment of local people.

23. Database Maintain huge amount of data/ data loss Organize and interpret from available data Security measures against spy Compatibility Solution: Technological Up gradation Hire skilled employees. Acquire reliable storage devices which is a critical for the company. 24. Hardware/Software 18 months technology upgrade Compatibility between hardware and software. License issues Cost of equipment and technology Geographic and natural constraints Solution: Sharing information where there is sophisticated technology. Working under legal boundaries. 25. Procedures Inventory management Procedure Change with technology. Data collection procedure in different markets. Sales & Trends forecasting in new markets Solution: Applying large number of POS in the supply chain. Formation of Local Teams to analyze the market for forecasting. 26. Key Success Factors for Zara Business is built on quick response Production responds to trends. Deliveries are twice weekly, unlike most of the competitors weekly schedule. KSFs: Market Research Ready raw material base Multi-functional quick decision making Vertical integration to ensure control over supply chain, and proximity Technology Cost Control, despite flexibility Technology and Infrastructure 27. References http://www.zara.com/ www.3isite.com/articles/ImagesFashion_ Zara _Part_I.pdf www.3isite.com/articles/ImagesFashion_ Zara _Part_II.pdf Harvard Business Review http://en.wikipedia.org/wiki/Fast_fashio