ORGANIZATION INFORMATION CHIEF OFFICER

Organization Information Chief Officer



Organization Information Chief Officer

Task 1: Zara Fashion Retail

Zara, the most profitable brand of Inditex SA, the Spanish clothing retail group, opened its first store in 1975 in La Coruña, Spain; a city which eventually became the central headquarters for Zara's global operations. Since then they have expanded operations into 45 countries with 531 stores located in the most important shopping districts of more than 400 cities in Europe, the Americas, Asia and Africa. Throughout this expansion Zara has remained focused on its core fashion philosophy that creativity and quality design together with a rapid response to market demands will yield profitable results. Zara sells women's, men's, and children's apparel and also offers plus-size and maternity lines to clothe its larger customers. Zara is Inditex's principal chain and accounts for about two-thirds of its parent company's sales (hbswk.hbs.edu).

Zara's unique approach to product development is instrumental to their success. Zara gives store managers significant autonomy in both determining the products to display in their stores and which to place on sale, and relaying market research and store trends back to their headquarters in La Coruña. At headquarters there are teams of commercials who take this information into account to design and effectively plan and produce all of Zara's products. Zara maintains a design team of 200 people, all of which produce approximately 12,000 new styles per year for Zara. The process of obtaining market information and relaying it to design and production teams expedites product development by shortening the throughput time of a product to 3-4 weeks from design to distribution. This process is very different from its competitors. Many competitors rely on a small elite design team that plans both design and production needs well in advance. Stores have little autonomy in deciding which products to display or put on sale because Headquarters plans accordingly and ships quantities as forecasted. Zara's speed to market in product development exceeds the capabilities of its competitors. This in itself provides additional value to stakeholders, customers, and stores in producing quality clothing at affordable prices .Zara's product development capabilities are essential to Zara's business strategy and future success (hbswk.hbs.edu).

Task 2: Zara Information system

Zara was always leading the sector by its commitment to IT. The suppliers, manufacturers, warehouses, stores, and the top management were all connected with each other with the IT infrastructure. This was the core reason of success in Zara's complex business system. As an example, Zara's IT requirements were so unusual that they mandated internal development instead of using logistical packages available on the market (hbswk.hbs.edu).

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. Zara is already getting all of this information with its current IT infrastructure. In particular, the company appears to have little need to make inventory balances available to stores; the Zara business model works well without it, and encourages employees to sell clothes rather ...