Zara’s Business Model

1. Aside from the two reasons stated in the case, what other reasons can you give to explain: why Zara does not sell online (at the time of the case)?

As it is mentioned in the case study the  two reason Zara decided not to sell clothes over the internet, first the company distribution centers we not configured for picking small orders and shipping them to consumers, second it would be complicated to handle returns of merchandise bough online.

2)      Describe Zara’s business model and how is it different from other fashion retailers such as Gap?

       Zara is more fashionable and follow up  with the fashion, and always the first one to get the latest fashion in the world, and prices are less Gap, where as Gap is a regular retailer stores, doesn’t pay much attention to the fashion outline.

3)      What information does Zara need to operate its supply chain and how is it congruent with its business model?

Zara established three cyclical processes, ordering, fulfillment and design and manufacturing. Ordering happen twice a week, the most important thing is the flow of information, the sales data to have an exact forecast demand and be able to respond quickly.

4)      What is Zara’s value proposition?

As it mentioned in the case it business idea was very simple, like customer demand to manufacturing and link manufacturing to distribution.

5)      Why does Zara not advertise like its competitors?

Their business model is not to advertise, the company placed ads only to promote its twice  yearly sales and to announce the opening of a new store.it spend little on ads, Zara spent relatively heavily on its stores,

6)      Should the company upgrade its IT system/POS etc.?

They prefer to write the applications they needed rather than buying commercially available software. I think they are good enough with their IT systems, because the applications are supporting ordering, fulfillment, and manufacturing.

7)      Should Zara buy an off the shelf system?

No it shouldn’t

8)      Should they change the OS for their IT system?

I think they should and slow down the process, there is no need to put a new system now in the current system.

9)      Should the company give its employees the ability to look up inventory in other stores?

       Yes I think the employees should have the ability to look for the inventory, it will help them to get more organize. This will help in low costing too the employees will be doing the job instead of hiring new team.