This report will provide you an understanding of how Zara manages a selection of structured and dynamic business processes that guide them in their day to day operations and also how they interact with their Management Information System, ITX Stock. Some of these structured and dynamic processes will be examined and analyzed in an attempt to clarify or even improve their operational aspect. By improving information systems and processes not only will it help Zara but it will also make it very efficient for the employees since it will be easier for them to retrieve information on a certain product. By understanding information systems managers and employees at Zara will be able to work better.
Zara was founded in 1975 by Armancio Ortega in Galicia, Spain. What started out as one store that primarily sold lower-priced lookalikes of trendy and designer clothing quickly became a trendy, design house of their own making. They are synonymous with the term “fast fashion” as their founder referred to his business strategy of “instant fashion” in the 1980’s. His decision to focus on using information technology and groups of designers rather than one main designer as other popular fashion clothiers did at the time was revolutionary. It shortened the time to get a design into a store to about one week which is almost unbelievable when compared to the average industry standard of six months. Zara is one of the leading retail clothing stores in the world with nearly 3,000 stores in 96 countries (Forbes, 2021) and this includes their Zara Home and Zara Kids stores which are popular in Europe. While Zara is low-cost for everyday use when compared to higher-end fashion brands, they are not a cheap alternative for everyday clothing choices. With store locations across the world, the use of Information systems will be essential since many stores can run out of stock in a short period of time or on a certain product due to their business model..
Zara releases about 12,000 new designs each year and relies on very little warehousing and advertising (Guardian, 2021). If they advertised a certain piece of clothing, it is very likely that that piece would no longer be in stock by the time someone went to their store. The company has numerous lines of clothing and accessories; women, men, children, beauty, lingerie, home decor, shoes and more. They just rolled out a new line, Massimo Dutti, to reach the younger and chic customer who want more avant garde designs. The company's quicker fashion cycles, which brings multiple collections in a year rather than two or three, are one of the main draws of Zara, which has seen its popularity increase over the years.
Zara has roughly 75,000 employees and realized about $19.5 billion in revenue in 2021 making them the major revenue producer for Inditex Group. Their major competitors are H&M, Forever 21, and Boohoo Group. The pandemic caused a revenue drop for the first time in years but they quickly rebounded along all brands and lines. Zara has embraced the use of information technology and using best practices to have the competitive advantage of the shortest lead time from concept to creation within the textile field. Not many companies would be able to pivot and adapt as quickly as Zara is able to with their expertise and openness to focusing on making what the customer wants. A solid understanding of your business’s processes and systems can drive company profits and enhance customer relationships. Globalization requires companies to be more intelligent in their business decisions and processes enable this.
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