Zara Case Anaylsis

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Overview: In the year of 2003 Zara, Inditex’s largest chain of stores, were facing a problem of whither to upgrade their DOS based point of sale (POS) terminals. Inditex and Zara were fast expanding at the time. At the beginning of 2003, Inditex operated 1558 stores in 45 countries, of which nearly 550 were part of the Zara chain. The group opened on average one store per day across the world. Forty-six percent of the group’s sales were inside Spain. Inditex executives felt that ample room for growth existed within its current market. Inditex’s western European expansion could be largely supported with its current infrastructure. This implied that it would not be necessary to build entirely new production and distribution networks in order to support future growth. The key idea of Zara’s operation is “fast fashion”. They believe the speed to keep up with latest fashion is their core competitiveness. And their way of managing was to take advantage of the intelligence and trust the judgment of employees throughout the company. The use of information technology in Zara was also serving for the speed and decentralized decision making. There are no CIO and no setting budget for IT. What Zara have is an approximately 50 people IS department, which respond for writing applications and all IT support of Inditex stores around the world. Each of Inditex stores has two separate information system. One of them is PDAs. In 2003, PDAs in Zara was used primarily for ordering and for handling garment returns to DCs and transmitting information from headquarters to all stores. The other is the POS terminals, which helps track the “theoretical inventory”. In 2003, the POS terminals are still using the DOS operating system, which was no longer supported by Microsoft. Neither the POS terminals nor the PDAs were always connected to Zara’s headquarters or to other stores. Customers:

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