Zara A Business Overview With IT Recommendations Research Paper

Zara A Business Overview With IT Recommendations - Research Paper Example The way in which the company is designed supports a great deal of IT support, however, the IT that is currently being used is now out of date and the company is in danger of losing access to the necessary hardware it needs to operate. The operating system is out of date and may no longer be made by the manufacturer. Therefore, Zara is in need of an update that will provide the company with a more solid foundation from which to find continued success. Zara: A Business Overview With IT Recommendations Case study Zara is a clothing manufacturer and retailer that has taken a unique and highly successful approach to their creation, delivery and sales. Zara is a subsidiary of Inditex and is based out of Spain, having been founded by Amancio Ortega with over 800 stores worldwide. The success of the store has led to some amazing achievements, including the launch of a 20,000 square feet outlet in Dublin, Ireland (Hines & Bruce, 2007, p. 247). The business model has embraced the idea of the d isposability in combination with the speed at which trends shift, creating a system that delivers clothing to the stores in the quickest possible ways with volume created through a large number of styles with few of each style created. From the design room to the floor will average five weeks of production with a two week turnaround when a style is redesigned. The target markets for the retailer is women, men, and children - basically covering everyone who needs to wear clothing (Dickens, 2007, p. 267). Zara approaches their business model by equating clothing to food and giving it an expiration date. Through the way in which they designs are created, Zara has appeal to a broad variety of demographics with the designs crossing age boundaries and style boundaries, servicing the greatest number of people possible. The clothing was â€Å"not designed and manufactured to be highly durable; they were described as ‘clothes to be worn ten times’† (Through having a large number of styles and limiting the production runs on those styles, the theory is that one of the styles available will appeal to the consumer. In addition, through the limited number of each style and the high turnover, consumers feel encouraged to visit the store frequently. The profit margin is low on each garment, but because of the volume, the overall profit is high. In continuing the idea that the clothing is like food, the style can become stale, thus creating a short shelf life for each design. According to Dutta (2002), Zara changes its stock twice per week so that what is in the store is always new and fresh. Speed is the key to the model that Zara has been designed around. The first way in which the company creates quick turnover of its fashions is by having their manufacturing plants in Europe as opposed to Asia or Africa where the wages for workers would be lower. However, Zara considers the advantage of speed more important than the savings that would be seen from plan ts that were in lower wage countries. The salaries in Spain average around 2000 Euro per month, where in Asia the same worker would be paid around 300 Euro. Money is saved in shipping and in time, so the offset is considered worth the differences (Capell, 2008). An example of the problems that are solved by having plants near the outlets can be seen by the unusually warm autumn of 2003 when warmer clothing was not selling very well. While other companies were having problems with high levels of stock that was sitting on the shelves, Zara was able to quickly reposition its inventory and create new designs that were more appropriate to the weather (Tiplady, 2006). Goals and strategy If one