Zara Case Study

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Table of Contents Executive Summary 2 Issue Identification 3 Root Cause Analysis 5 Value chain Model 6 Cost Analysis 8 Alternatives 10 Decision Criteria 10 Alternatives 11 Alternatives Evaluation 13 Recommendations 13 Implementation 15 Monitor and Control 16 Appendix A 17 Executive Summary Zara is a retail store of the Inditex group that started in 1975 and has now grown to 531 stores. Zara’s strategic business model focuses on product variety, speed to market, and store locations. The main business idea behind their model is to link customer demand to manufacturing and manufacturing to distribution which they have accomplished through vertical integration. Zara is currently facing the decision to…show more content…
Today Zara has 531 stores with majority located in Europe. Their main competition includes companies such as The Gap, H&M, and Benetton. The success of Zara has come from its vertically integrated supply chain structure and the close communication loop that it entails. It would prove difficult to duplicate the business structure of Zara exactly but other companies could learn from the company’s strategic model. Main Issue The main issue Zara is currently facing is whether to continue running their POS systems and terminals using DOS or to upgrade to a new operating system such as Windows, UNIX, or Linux. Currently Zara is the only company still running their POS systems using DOS which is no longer supported by Microsoft. Another reason this is being discussed is although the vendor of the POS systems said they had no plans to create a machine that is not compatible with DOS, the terminal maker provide no assurance to this matter. If Zara decides to switch operating systems it would require new hardware, operating system, and high-speed internet connection for all 531 stores. A highly trained IT department would be needed to implement and switch over to the new system and to train employees. An increase in the operating costs of each store would also occur due to the annual maintenance fees charged for each POS terminal in operation. Should Zara switch their outdated technology even though it is currently working for them? Here are

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