Zara, The Largest International Fashion Companies Of The World

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Zara is one of the largest international fashion companies of the world. Founded in 1975 in La Coruña by Amancio Ortega, the company still lives by the simple idea of linking the customer demand to manufacturing, and link manufacturing to distribution. In 1985, Inditex became the holding company of Zara and Jose Maria Castellanos. Ortega and Castellanos both believed that in order to success in the type of business they wanted to build, the use of computers, a quick response to customers and disintegrated decision making were critically important.

The two most important aspects of their business model are firstly, being able to respond to the fast changing trends of fashion demand and fashion industry and secondly, the senior managers
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Zara has differentiated from its competitors by producing low-cost designs, which can be produced and distributed to stores in a very short turnaround time. Zara´s IT strategy is to use minimal cost equipment without the need for substantial amount of information systems support. Zara´s IT internal department consists in 50 people, almost from Galicia and local universities, with a very low turnover rate and located in La Coruña. They are responsible for developing the applications for Zara´s unique business. All Zara´s IT operations are centralized from the headquarters.

Firm-based value chain model

We need to review the primary and secondary activities of the company using Michael´s Porter value chain model (Figure 1) in order to identify the series of value-creating activities in Zara and the role of Information System (IS) and Information Technology (IT) strategy within the business. This framework is useful in determining the ways in which an organization cam implement IT or add value to the services or products. Primary activities are related to production and delivery of a product or service; inbound logistics, operations, outbound logistics, sales & marketing and customer service. Secondary/ supporting activities are those that facilitate primary activities and contribute indirectly to the production of products and services; human resource
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