IIM-LUCKNOW NOIDA CAMPUS

Management Information System

ASSIGNMENT Case Study - ZARA
By

GROUP- B7B Rajeev Misra (WMP6103) Rakesh Rawat(WMP5048) Rakesh Sharma(WMP5049)

Submitted to: Prof. Amit

ANALYSIS FOR Case Study- ZARA

1. What are the current and potential impacts of globalization on the inequality among countries? . Discussion: Computers have become an integral aspect of fashion industry. Zara had a lot of success with its organization of its information technology. The IT infrastructure that is at the heart of Zara's business enables the garments to be shipped quickly from the distribution centers to the stores. Collecting vital information, such as daily sales numbers, allow designers to approximate what types of fashions are selling well. Thus, the designers have real-time information available when deciding which type of fabric, cut, and colors to use when designing new clothes or modifying existing ones. This IT advantage has shortened the time it takes to go from design conception to the time of arrival at the distribution centers and finally to the stores to be placed on racks. The progressive IT thinking has also benefited the area of product information and inventory management. It has allowed Zara to manage thousands of fabric and trim specifications, design specifications, and their physical inventory. Information from headquarters to the stores is easily transmitted through the PDAs. However, technology in Zara has been particularly most effective in supporting its expansion of stores. Information technology has basically been able to revolutionize the process of opening a store by transforming it to simply a "plug and go" system that any store manager can perform. The one drawback of information technology is that it often requires updates and of course that adds to the cost. While information technology has been thoroughly incorporated into Zara's business, it would be a mistake to not pursue an upgrade to the IT system in place.

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Having a system that is incompatible because it has not been upgraded with future software applications could lead to operational and security problems in the future. With an upgrade of the entire technical network in all the stores, an extensive IT department and budget would need to be formed to deal with the long implementation schedule and the related costs. Integration of the new systems into their present business practices and processes could prove to be disastrous. Maintaining updated systems is clearly advantageous, but the potential pitfalls might be too significant to ignore. However, to alleviate those fears, perhaps rolling out the upgraded systems at a test site will help Zara's executives forecast what type of problems that may arise. If after a specified time period productivity and customer satisfaction is increased, a company-wide implementation can be considered. In the end, it is up to the entrepreneur's judgment in how to use the growing importance of information technology in its company. Hence Zara managed to get productivity/efficiency benefits from IT.

2. Nic Carr in his HBR paper IT Doesnt Matter argues that IT is a

commodity and cant offer any competitive advantage. This case argues that compared with GAP and Prada, Zara has gained competitive advantage from IT. Using your learning from the course, explain why Zara could gain competitive advantage from IT.
Discussion/Arguments: As case Quotes Zaras winning formula can only exist through managements savvy understanding of how information systems can enable winning strategies. It is technology that helps Zara identify and manufacture the clothes customers want, get those products to market quickly, and eliminate costs related to advertising, inventory missteps, and markdowns it self signifies that Zara gained competitive advantage from IT through change in business strategy.

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