Question

preparation for our next class, February 16, read textbook Chapter 3 on the firm Zara, and answer the following questions: (total of 250 words or less) 1. What has been Zara's approach to achieving and sustaining competitive advantage? The super-efficient fashion model acquired by ZARA is a strong source of competitive advantage. Styles are updated frequently and faster. At Zara, most of the clothing we see in stores didn’t exist three weeks earlier, not even as sketches. The fast fashion enables ZARA to replenish its stores frequently. The average time for a Zara concept to go from idea to appearance in store is fifteen days. In addition, Zara is also a pioneer in going green, with an environmental strategy that includes the use of renewable energy systems at logistics. 2. How has Information Technology (IT) enabled Zara's strategy? Zara excels by targeting technology investment at the points in its value chain where it will have the most significant impact. Zara’s IT expenditures are low by fashion industry standards. The IT implementation of the operation research requires establishing dynamic access to compute several large live databases (store inventory, sales, and warehouse inventory). This helps Zara to change the merchandise on display every three to four weeks and customer’s average time between visits to its stores is more than its competitors at 17 times a year. It is technology that helps identify and manufacture the clothes customers want, get those products to market quickly, and eliminate costs related to advertising and markdowns. 3. What Zara resources (tangible or intangible) support their corporate strategy? Zara's intangible resources are: its ingenious and fast design team, especial online strategy, productively directed supply chain, boosted its e-commerce efforts, limited production runs allow the firm to reduce to a minimum the risk of making a mistake, faster inventory turnover, reduced risk, and less advertising.

Answer 1

Step-by-step explanation:

Zara's approach to achieving and sustaining competitive advantage has been to maintain a super-efficient fashion model that enables them to update styles frequently and replenish their stores rapidly. They achieve this through fast fashion, where most clothing in stores didn't exist three weeks earlier. Zara's average time for a concept to appear in-store is fifteen days, and they use renewable energy systems in logistics to support an environmental strategy.

Information technology (IT) has enabled Zara's strategy by allowing them to target technology investment where it will have the most significant impact. Zara's IT expenditures are low, but they use IT implementation to establish dynamic access to live databases to compute several large databases. This helps them change merchandise on display every three to four weeks, and customer's average time between store visits is 17 times a year. IT also helps Zara identify and manufacture the clothes customers want, get those products to market quickly, and eliminate costs related to advertising and markdowns.

Zara's resources supporting their corporate strategy are both tangible and intangible. The intangible resources include their ingenious and fast design team, online strategy, productively directed supply chain, boosted e-commerce efforts, and reduced risk through limited production runs. Additionally, Zara's faster inventory turnover and less advertising contribute to their competitive advantage.

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