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Copy of Zara International: Fashion at the Speed of Light

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Shinta Laxmi

on 11 September 2013

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Transcript of Copy of Zara International: Fashion at the Speed of Light

Zara International: Fashion at the Speed of Light
•Classical management can be seen in their active reduction of their expenses whenever and wherever possible.
•Bureaucracy was evident as every point in the supply chain is optimized to achieve the overall goal which is shorter runway-store garment production
•The organization structure follows scalar chain considering Zara’s nature of industry (fast fashion and retail)
•Store Managers utilize handheld computers to track sales data and order hot items in due time. They are given immediate data on where they can invest for more profit.
•Behavioural management approaches can be seen in their eye-catching layouts of their stores so as to keep the employees have a desirable working space and attract customers at the same time. They also use simple packaging strategy (black plastic hangers) to imply that the items are the newest of the new.
•There is unity of direction in the supply chain (from design to retail sales) and turnaround time is clearly set for each point.
•Inditex Group controls design, production, and distribution and retail sales of Zara Intl.
1.In what ways are the elements of the classical management and behavioural management approaches evident at Zara International.
•Zara’s main objective was to bring the new trends in fashion to the customers as soon as possible.

•They have utilized the global advantage of having Inditex on the production and distribution of their product.

•Zara introduced a fast-paced delivery of latest designer trends on a lower price to their stores that are also located in fashion capitals and other continents.

o2 weeks update of garments
o2x a week garment replenishment
oLogistical centers for timely distribution (24 hrs for Eu, 48 hrs for US and Asia)

•Zara enticed their customers not by advertisements but by effective visual merchandising of their items and stores.

•As for contingency, Zara uses data from handheld devices that are updated by store managers to track what items are “Hot” or was is “Not”. This data is used by the design team as reference on what customers want or need.
2.How can Systems concepts and the notion of contingency thinking explain the success of some of Zara’s distinctive practices?
•Jeffrey Pfeffer would be the best consultant for Zara because the said firm is more mainstream in management approach essentially because its operation is fast paced and profit oriented. It has to parallel its business objectives to values, leadership, employee engagement, and social responsibility.

•Mary Parker Follett. As Zara broadens its reach towards internationalization, investors will be considered in this setup. Because of this, the principal will be dealing with several cultures with different perspectives in business. They should be able to control them without making the investors feel like they are being pushed around. The concept of power sharing would be most beneficial when the time comes.

•Max Webber would be a suitable consultant to Zara International. His bureaucratic approach could benefit the organization in terms of quality assurance and controlling workers. His focuses are for the improvements of organizations that could help Zara on their fast fashion approach.
3.Zara’s CEO has asked your management consulting firm for advice in how the firm can make immediate improvements to stay ahead of competition. You must choose one of the consultants for this job – Frederick Taylor, Max Weber, Mary Parker Follet, Chris Argyris or Jeffrey Pfeffer. Which one would you assign to Zara and why?
•According to Zara and its competitors’ sustainability report, Zara is still at the forefront of the fast fashion industry. In that sense, Zara’s lightning-quick supply chain strategy is still worthy of being a benchmark for other firms to follow. However, apart from the need for additional globally strategic manufacturing sites, Zara has to keep abreast with fashion industry’s campaign for corporate social responsibility if it intends for greater international expansion. Below is a summary of H&M’s 2011-2012 Sustainability Report

•Highlights from H&M’s 2011 Sustainability Report:
oMore than 442 000 workers in Bangladesh have been trained on their rights since 2008 by H&M
oH&M is the number one user of organic cotton in the world
oH&M saved 300 million liters of water in denim production compared to 2010
oMore than 2,3 million garments were donated to charitable causes by H&M

•The aim is to ensure that the garment industry has a positive impact on the country’s development and to create a stable labour market, not just counting jobs, but also improvements in labour and women’s rights, skills, education and health.

•In 2012, H&M reduced carbon emission by 5%.

•Meanwhile, Zara is not a benchmark for marketing strategy only because it eliminates the challenge of attracting customers by strategically placing itself in fashion capitals of countries.

•Source: http://about.hm.com/content/hm/NewsroomSection/en/NewsRoom/NewsroomDetails/657405.html
4.Gather the latest information on competitive trends in the apparel industry, and on Zara’s latest actions and innovations. Is the firm continuing to do well? Is it adapting in ways needed to stay abreast of both its major competition and the pressures of a changing global economy? Is Inditex still providing worthy management benchmarks for other firms to follow?
Nona Francisco
Hector Atienzo
Carlo Sismaet
Sherwin Chang
Lawrence Tapalla
Group 1
THANK YOU FOR
LISTENING
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