CASE STUDY ANALYSIS
ZARA: IT FOR FAST FASHION
Introduction
The success of Zara in apparel manufacturing and retail business started from their belief that customers
taste in fashion is hard to predict. Zara’s strateg
...
CASE STUDY ANALYSIS
ZARA: IT FOR FAST FASHION
Introduction
The success of Zara in apparel manufacturing and retail business started from their belief that customers
taste in fashion is hard to predict. Zara’s strategic intent to respond quickly and accurately to the fastchanging market demand has become the basis in building their core competency of highly responsive supply
chain. This supply chain enables Zara to quickly capture the unpredictable market demand, shorten the
turnaround production time and deliver the new design in only 3 weeks from conception to store. It can be
seen that the highly responsive supply chain is fundamental in delivering distinctive value to each of Zara’s
products.
Zara’s supply chain relies heavily on the information exchange throughout every phases and people who
involved in it. To make information transfer easy, Zara established operational procedures which involve the
use of information systems. However, there are still challenges in regards to unreliable infrastructure and
ineffective communication flow that hampering the information exchange. These challenges need to be
strategically addressed as it is putting Zara’s core competency at risk.
The purpose of this paper is to examine how information system can strengthen Zara’s core competency.
Firstly, it will describe the core competency then examine the challenges that Zara face in cultivating this
competency. Secondly, it will discuss the role of information systems in strengthen Zara core competency.
Finally this paper will conclude by offering recommendation so that information system can be implemented
to help the organization.
Challenges in Cultivating the Core Competency
Zara’s preference for speed and responsiveness has been formulated since its inception. Zara tries to capture
rapid change of customer’s demand and fulfilling it in timely manner. The core competency that enables Zara
to do this lies in their highly responsive value chain. This value chain is built from constant learning and
collaboration of different part within organization and it becomes a distinctive value (Prahalad and Hamel,
1990).
Zara’s value chain is designed to close the information gap between the upstream chain and the end
customers. It relies heavily on the information exchange throughout the value chain. Zara established
operational procedure which consists of three cyclical processes: ordering, fulfillment and design and
manufacturing. Information system is heavily used to link one activity to another. However, there are still
challenges which can be categorized into two issues below:
1. Unreliable Infrastructure
Zara’s unreliable infrastructure is caused by two factors. Firstly, it relates to the outdated DOS
operating system that Zara used in point-of-sale (POS) terminal of each store. Although the system is
operable currently, DOS is no longer supported by Microsoft and there is no maintenance such as
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