ZARA

It for fast Fashion

CASE ANALYSIS
 How would you advise Salgado to
proceed on the issue of upgrading
Zara’s POS systems?
Positives
Zara currently uses POS system based upon DOS which is very easy to
use & working fine for them
This system does all the basic operations of billing but doesn’t provide
any customer insights, real-time data or any advanced sales
projections
Use of DOS based POS is very user friendly, stable & easy to maintain
Negatives.
As Zara is getting bigger & bigger its operation are becoming more
complex.
Hardware vendor may modify peripherals for POS so that they may not
run on ancient OS such as DOS.
Zara is the only customer using DOS
 What is the Zara “business model”? How
is it different from the business model of
other large clothing retailers? What
weaknesses do you see with this within
this model?

• The first difference of Zara’s business model compared to others is that their
model is highly responsive vertically integrated.
• The second is that their that stores do not have any participation in the design
of the clothes they receive.
• The third difference is that each store is in charge of aggregating the mix of
clothes they will receive.
• The fourth short life span but increased launches of new style clothing. Average
new launches per year:11000
• The fifth sales forecast is not done due to flexible factories.
• The fifth difference is that stores will perform differently in terms of sales, gains
and loses. And this will be the main weakness and strength identified in this
model. One mistake is not centralized but winning is not either.
What information does Zara need to operate its
business model?
In order for Zara to work, they need
the following information:

Order for each store.

Raw material inventory
Finished good inventory DC
Finished good inventory in store
Sales by SKU by store
 What current or
potential weaknesses
(if any) do you see in
Zara’s IT infrastructure
and IT strategy?
• Zara is the only customer using DOS
• Hardware vendor might upgrade their
machines which are not DOS- compatible
• Vendor not ready to sign a contract
• Centralized data to help expand in different
countries
• Following table shows the expansion of Zara in
Asian continent which would require the new
system
0.5% of revenue as in-house applications
were developed
 ZARA
By
Héctor Fabio Bianchá
Juan Sebastián Herrera