Essay about Zara Case

1940 Words8 Pages
Introduction Zara, the largest retailer within the Inditex portfolio, has been able to maintain a competitive advantage over its competitors by offering up-to-the-minute fashions in its stores throughout Europe, Asia, the Middle East and the Americas. Zara is the result of a clothing factory integrating forward to take advantage of linkages between manufacturing and retailing. These linkages are facilitated by information technology and Zara has developed a highly automated production and distribution system to service its stores. The information systems within Zara stores are easy to use and stable, but much discussion is taking place regarding whether or not to upgrade them to take advantage of new technologies which could better…show more content…
Individual store managers choose which items will be sold in their stores. Designers determine what items should be produced based on current styles, while product managers have the authority to transfer merchandise from one store to another if necessary. Together, speed and decentralized decision-making allow Zara to respond to environmental factors at a speed no other major retailer has attained, leading to increased sales for the company. 2. Organizational Structure: IT Embedded Both Inditex’s Chairman, Amancio Ortega, and its CEO, Jose Maria Castellano Rios a former IT manager, believe that computers and technology are imperative to the execution of the company’s strategy. Inditex does not have a CIO. Instead, a technology steering committee, including Ortega and Castellano Rios, is responsible for initiating new technology initiatives. Even with this high-level attention to the opportunities offered by information systems, no cost/benefit analysis of IT projects is undertaken and there is no formal procedure for determining which projects will be undertaken. All of the company’s IT employees work from the company headquarters. Zara prefers to write its own applications, as opposed to buying commercially available software, because it believes this is the only way to meet its unique business needs. When developing production and distribution

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