• 
  
  • 

Complete the reading of the case and present a written document where you perform a substantive analysis answering the following questions:

1. What is the problem presented by the case?

2. How would you advise Salgado on how to proceed with the issue of improving Zara's POS systems? a. Based on his answer: i. To what degree should the company place terminals with a modern operating system at its points of sale? ii. To what degree would be building stores in new networks mean? iii. To what degree would you assume employees can search through inventory for their stores? iv. To what degree would you assume that employees can search through the inventory of other stores?

3. What is Zara's business model? How different is the business model compared to other clothing stores? What weaknesses, if any, do you see within this business model? Is it scalable?

4. What information does Zara need to operate its business model?

5. In his opinion, what are the most important aspects of Zara's approach to information technology? Are these approaches applicable and appropriate anywhere? Yes or no? Where will they not work well?

6. What is the current or potential weakness (if any) that you see in Zara's IT infrastructure and IT strategy?

Spanish retailer Zara has hit on a formula for supply chain success that works. By defying conventional wisdom, Zara can design and distribute a garment to market in just fifteen days. From Harvard Business Review. by Kasra Ferdows, Michael A. Lewis and Jose A.D. Machuca Editor's note: With some 650 stores in 50 countries, Spanish clothing retailer Zara has hit on a formula for supply chain success that works by defying conventional wisdom. This excerpt from a recent Harvard Business Review profile zeros in on how Zara's supply chain communicates, allowing it to design, produce, and deliver a garment in fifteen days. In Zara stores, customers can always find new products-but they're in limited supply. There is a sense of tantalizing exclusivity, since only a few items are on display even though stores are spacious (the average size is around 1,000 square meters). A customer thinks, "This green shirt fits me, and there is one on the rack. If I don't buy it now, I'll lose my chance." Such a retail concept depends on the regular creation and rapid replenishment of small batches of new goods. Zara's designers create approximately 40,000 new designs annually, from which 10,000 are selected for production. Some of them resemble the latest couture creations. But Zara often beats the high-fashion houses to the market and offers almost the same products, made with less expensive fabric, at much lower prices. Since most garments come in five to six colors and five to seven sizes, Zara's system has to deal with something in the realm of 300,000 new stock-keeping units (SKUs), on average, every year.