.ZARA: FAST FASHION
What are the distinctive features of ZARA’s operations strategy that support its business strategy? How? Work the numbers! Compare ZARA to an ‘average’ retailer with similar posted prices. (Assume that the retail price is twice the manufacturer’s selling price to the trade.) What are ZARA’s advantages and disadvantages? How are ZARA’s operational and strategic ‘choices’ linked together to support its quick-response capability and to create sustainable competitive advantage and overall long term profitability? Are there any ‘weaknesses’ in ZARA’s system – any challenges to continued growth and increasing profits? How should ZARA grow? What recommendations would you make to Inditex CEO Jose Maria Castellano?
- HINTS ON OPERATIONS MANAGEMENT CASE ANALYSIS:
- READ THE CASE – AT LEAST TWICE – ONCE BACKWARDS. LOOK FOR IMPORTANT NUMBERS. IDENTIFY THE ‘PROBLEM(S)’ THAT NEEDS TO BE SOLVED. See what the ‘Exhibits’ tell you. Look for the cause/problem – effect/symptom relationships.
- MAP (draw) THE PROCESS (ES) – IN DETAIL. Identify the sequence of tasks that need to be performed to produce the product (goods or services or both) and map out which must be done in series and which may be done in parallel. Remember there may be more than one ‘process’ going on; either in series or parallel. For each process; identify in detail each task (design/equipment/people/knowledge, time standard and capacity) and identify the ‘bottleneck’ in any multi-stage process sequence.
- Work the numbers!! Analyze each process for Cycle Time and Lead time and don’t confuse the two. Consider capacity, scheduling and productivity/asset utilization for each task and for the process as a whole.
- Step back – look at the product/service the process is designed to produce and ask if there is a good ‘fit’. What ‘business’ is the organization in? Who is the Customer? What Problem does the ‘process’ solve for that customer/market segment? Why do they come to us (we are either ‘better’ or lower cost/cheaper priced) and how does the process support that ‘sustainable competitive advantage’?
- Identify the ‘4 V’s’ – See the Slack book. How many products/services is the process trying to produce and do they conflict? Is the process trying to support more than one ‘business’ and do they conflict with or support each other?
- Work the Economics and Financial numbers. Is this process profitable? Will recommended changes improve profitability? How? Why?
- Think again about the fundamental problems that need to be fixed. Will fixing those help the customer and/or make the SBU more profitable?
- Create solutions to the problems identified – be creative. Then go back and redo d – g. More than once if necessary.
- ‘Step back’ again and look for ‘fit’ between your process changes, other functions, and the organization structure and strategy of the SBU.
- FINALLY, review for logic, proper use of ‘evidence’, ‘fit’, flow of ideas, persuasiveness of your ‘argument’, proper grammar/vocabulary/organization of ideas.
- MOST IMPORTANTLY, READ/STUDY THE ELLET BOOK and do the CASE ANALYSIS COACH Simulation Exercise.