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IFE Matrix——ZARA

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by

Michael VILIA

on 12 June 2016

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Transcript of IFE Matrix——ZARA

INTERNAL AUDIT/ANALYSIS
Image by Tom Mooring
STRATEGIC MANAGEMENT 2016
EFE Matrix
EXTERNAL AUDIT/ANALYSIS
ECONOMIC FORCES
SOCIAL, CULTURAL, DEMOGRAPHIC
TECHNOLOGICAL FORCES
Marketing
OPERATION
IFE Matrix
SUMMARY
WEAKNESSES
STRENGTHS
CONCLUSION
In a word, such shortcomings like copying pale into significance when set against Zara's crowning fulfillment in fast fashion field, which are mainly based on the customer-oriented quick-responsive supply chain integrated with effective and efficient Management Information System.

The 2016 has brought us a overwhelming crisis. There seemed a steepy cut in performance of fast fashion field from the latest financial reports of Uniqlo and H&M. The former decreased 31.8% and the latter 33.3%.

However, opportunities approached as well as threats, such as increasingly growing E-B market, leaving too much to be desired still, not only by Zara but all the others.


Insufficient global demand
Slow economic growth
Low speed growth of world trade
Overall stability of employment situations
Apparel industry sales corresponding rapid growth
Consumption habit
Attitude toward fast fashion
Population aging
Promoting recycling
More serious water pollution
Special tariffs
Environmental protection laws
Customs charge those products producing pollution
1.Zara goes with clear-cut plan with more emphasis on strategy of sustainability
2.Zara does well in organizing sales effectively.
3.Zara sells great product with reasonable price in fast fashion.
4.Chain stores were increasingly laid and tough to gain the great areas.
5.Inventory turnover was 4.19 better than industry 4.15
6.Marginal profit up to 13.8% in 2015.
7.DPO took 35.6 days yet DSO needed only 21.18 days.
8.Production and operation were of great sustainability, including using environmental-friendly raw materials and organizing donation.
9.Quickly responded to demand for 14-days designing and manufacturing with 12,000 new products annually facing consumers.
10.Augmented product added care instructions and some related instruments.
11.Mature MIS enables Zara to sustain a special scale of economy in the fashion industry.
12.Supply chain combined with MIS made an powerful role in business process to be quickly responsive, including demand forecast, controlling producing and supporting logistics.
1.Staff training system was right in direction yet limited in training resources and channels.
2.Slightly short of ability to effectively control and coordinate cost management.
3.Regarded as a fast fashion brand always working on grabbing those 18-35.
4.Not good at making various marketing activities or promotion work.
5.Assets turnover declined to 1.28, high total debt to equity up to 0.7% brought risk.
6.Paid inadequate attention to E-B platform and new market.
7.Augmented product lacks efficient after-sale services.
8.Non-original product design were suspected of copying.
9.Design team was made of young people, whose numbers were still less than others.

In order for the strategic management process to begin, managers are required to conduct an internal analysis.


A.Suppliers control
—40% raw materials self-provided
—outer 260 suppliers—no more than 4% order

B.Manufacture control
—50% outsourcing/ nearly 100% H&M
Competitive forces
3D printing
O2O business platform
Big data technology
Political Governmental, Environmental
Increasing intense competition
Gradual shifting into new platform of EB
FACTORS
R&D
customer
1.Zara goes with clear-cut plan with more emphasis on strategy of sustainability.
3.Staff training system was right in direction yet limited in training resources and channels.
2.Slightly short of ability to effectively control and coordinate cost management.
MANAGEMENT
GAP —the best balanced
ZARA —highlight logistics, cut marketing cost
H&M —cut production cost, add marketing
UNIQLO —emphasize on production quality
1.Quickly responded to demand for 14-days designing and manufacturing with 12,000 new products annually facing consumers.
1.Mature MIS enables Zara to sustain a special scale of economy in the fashion industry.

2.Supply chain combined with MIS made an powerful role in business process to be quickly responsive, including demand forecast, controlling producing and supporting logistics.
1.Chain stores were increasingly laid and tough to gain the great areas.
PRODUCTION
2.Non-original product design were suspected of copying.
3.Design team was made of young people, whose numbers were still less than others.
Presented by Team TRIVIGOR
WEIGHT SETTING
Assessment Benchmarks
Weight designing
WEIGHT SETTING
3.Regarded as a fast fashion brand always working on grabbing those 18-35.
4.Not good at making various marketing activities or promotion work.

5.Zara paid inadequate attention to E-B platform and new market. (Uniqlo big threat

2.Zara does well in organizing sales effectively.
4.Assets turnover declined to 1.28, high total debt to equity up to 0.7% brought risk.
MIS & Supply chain
2.Marginal profit up to 13.8% in 2015.
3.DPO took 35.6 (industry 32)days yet DSO needed only 21.18 days.(industry 30.92)
financial
1.Inventory turnover was 4.19 better than industry 4.15
Full transcript