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Project presentation A case-study of ZARA Project presentation A case-study of ZARA

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IPYGO 2009
ZARA
Project presentation A case-study of ZARA
Project presentation A case-study of ZARA
The Slitherers
Michael Bijata Benjamin Buxton Enric Miralles Navarro Rub��n Moreno Pr��sper Sonja Sanwald

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IPYGO 2009
ZARA
Description of general details of the firm
Description of general details of the firm
Task 1
• Basic information: location, size,
history, business sector, competitors, organizational structure

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The Slitherers - IPYGO 2009
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Inditex Group
• First Zara store opens in 1974 in La Coruña
(Galicia).
• One of the worlds largest fashion distributors • Eight ��sales formats�� - Zara, Pull and Bear,
Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home and Uterq��e
• Activities related to textile design, production
and distribution

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Facts and Figures
• Half of employees work outside Spain • 83% female, average age of 26 years. • 4264 stores in 73 countries
Fiscal Year 2007 2006 07/06 Turnover (million €) 9,435 8,196 15% Net profit (million €) 1,250 1,002 25% Nº of stores 3,691 3,131 560 Nº of countries 68 64 4 International sales 62,5% 60,40% Employees 79,517 69,240 10,277 Source: Inditex

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Inditex Group Timeline
1963-74
Amancio Ortega Gaona founds textile manufacturing business. Several centres distributing products to various European countries.
1975
First Zara store opens Creation of Inditex group
1985
Logistics network created, designed for projected growth
1986

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Inditex Group Timeline
1988
International expansion begins (Portugal)
1989
Stores in US/France Internationalisation of business, with stores worldwide Total ownership of Massimo Dutti Creation of Pull+Bear 65% share in Massimo Dutti bought
1991 1990s 1998/9
Berhska created Stradivarius acquired

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Inditex Group Timeline
2000s
Creation of Oysho and Zara Home Public listing on stock market First online sales (only Zara Home) Two new logistics platforms
2007 2008
Creation of Uterq��e 4000th Inditex brand store opened

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Philosophy
• Fast international expansion and excellent
response to sales concepts.
��National borders are no impediment to sharing a single fashion culture.��

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Competitors
• Mango • El Corte Ingles • H&M • Cortefiel • Arcadia Group
(Burton, Dorothy Perkins, Evans, Miss Selfridge, Topman, Topshop, Wallis)
• Benetton • Ralf Lauren • Tommy Hilfiger • Quicksilver • O��Neall • Guess • Gucci • Diesel...

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IPYGO 2009
ZARA Products, services and goods
Task 2
• Products and services delivered to
customers.
•Design of a new good (or redesign)
offered by the firm: Basic details, usage of production, design documents and House of Quality.

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Products and services delivered to customers.
��Creativity and quality design together with a
rapid response to market demands��
• Mainly focused on clothing but spreading its
activity in homeware and related items
• From grandmother to grand-daughter, a catalog
for everyone

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The Slitherers - IPYGO 2009
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The new product
A new kind of t-shirt that fits
both men and women
Basic Details: • Material: specially treated cotton
that moves moisture away from your skin.
• Design: special edition by a strange
Japanese designer.
• Sized: from XS to XXL to reach the
widest market target possible.
• Colour: Huge variety of colours to
make it easy to find the one that fits your current clothes.

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IPYGO 2009
ZARA Quality management
Task 3
• Find some cases applications of
the quality tools selected and explained

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• It says:
▫ 20% of the costumers will buy 80% of the clothes sold ▫ 80% of the costumers will buy 20% of the clothes.
80% 20% of the causes
20% of the causes
• We will identify this
20% who spend more, and attract them
• Also: 20% of our
articles are sold 80% more than the others.
▫ identify and manufacture these more than others
The Principle of Pareto

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1 2 3 4 5 6 7 8 9 10 11 12 0 500 1000 1500 2000 2500 3000 Month Sa le s
Scatter Plot
• The Scatter Plot is very
useful to view the correlation between different kind of aspects which affect the company. One example of this is to relate the number of sales of swimming trunks with the months of the year.
Month J F M A M J J A S O N D Sales 3 2 100 30 75 3000 1500 1000 3 6 8 1

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Control charts
• We can use them to measure
some sorts of quality of the clothes like the resistance of the seams.
• The quality of article is a
random variable and the percentage of articles defectives depends of the distribution of these random variables.

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Flow Chart
• A can be very useful in our
own company, for example for to give advise to our employees about how to behave in front of potential customers
Cause-and-effect
says a tiny changes in our stores can achieve some effects which will increase the sales. For example if in the places where there are male clothes there are woman helping and vice-versa the sales will increase.
Customer comes into store
Customer comes into store
Looks like (s)he is going to buy?
Looks like (s)he is going to buy? Is (s)he young? Be cool Be respectful
Don��t talk to him/her
Don��t talk to him/her Yes Yes No No

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IPYGO 2009
ZARA
New product strategy
Task 4
• Select and describe the process suitable
strategy for the product and service designed in Task 2.
• Process Analysis and Design Questions

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Process strategy
• Chosen strategy: mass customization
(takes advantage of: repetitive focus, process focus and product focus)
▫ High volume (but low volume per single shop), ▫ High variety (many different models and sizes), ▫ Very short product lifecycle (to meet the particular
customer��s needs and fashion)
Modular design (e.g. some products have mutual patterns) Lean production
Effective scheduling Rapid logistics (JIT model)
Short selling time

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Flow diagram of production process

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Equipment and technology used
• Production equipment:
▫ Flexible Manufacturing System (FMS)
Advanced production management & scheduling system,
▫ The most efficient machinery combined with the manual production, ▫ Robots, ▫ Quality control machinery
• Logistics:
▫ Automated storage and retrieval system, ▫ Advanced tracking & scheduling system, ▫ RFID identification,
• Design:
▫ All products designed with CAD software.

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Competitive advantage
• Product��s competitive advantage achieved on the basis of
product differentiation strategy mixed with innovative processes design.
▫ Differentiation:
Superior design, Quality, Marketing (the brand), Medium price.
▫ Innovative processes design:
Incredibly short Product Life Cycle (product is being designed 3 weeks before it gets to the shops) Extremely fast logistics (including JIT system) Low product volume per shop (clients can��t wait for the sales, higher margin)

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Environmental sustainability
• Product��s materials fulfilling all of the
environmental standards,
• Use as many recycled materials as possible (if
they fulfill the quality requirements),
• Materials as recyclable as possible, • Taking into account the environmental impact
through the whole life cycle of the product.

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Questions for Process Analysis and Design
• Is the process designed to achieve competitive advantage
in terms of differentiation, response, or low cost?
▫ Yes, in terms of differentiation.
• Does the process eliminate steps that do not add value?
▫ Yes, the processes concentrate on adding value.
• Does the process maximize customer value as perceived
by the customer?
▫ Yes (short life cycle, lean production, more adjusted product design)
• Will the process win orders?
▫ Yes, it already does win the orders.

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IPYGO 2009
ZARA Technology and its benefits
Task 5
• Analyze and describe the tech side
of your company.
• Reflect about the possibilities
of Internet as a channel distribution for your products.

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• Production Process
▫ Mass-production for cheaper raw materials and production ▫ Production in Low Cost Countries
• Hi-tech facilities
▫ Dye and cut fabric ▫ Compatibility of the machines ▫ Automatized production

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• Use of computers to interactively design
products and prepare engineering documentation
• Centralized decisiones about design (colour,
material, presentation,��)
• Centralized acting of the purchasing department
(prices, locations, materials,��)

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• Integration of traditional internal information
systems as well as enhancement of communication between organizations
• Internet-based systems to realize global
manufacturing, delivery, and after-services activities
• Combination of Internet and e-commerce to
improve the value delivered to the customer, interacting with suppliers, and managing its employees

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• Less time for development of new products with
virtualization
• technical collaboration and transfer of
information to and from the provider
• Improved information systems and
enhancement of communication between organizations and the different locations of the company

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The Webpage of ZARA
• Online Catalog • New products • Fashion News from all over the world, tailored to
the particular needs of ZARA
• Motivation of the consumers to buy someting • Information about the nearest shop • Customer service (exchanging of products,
ordering of customer cards��)

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Possibilities of e-commerce
• Online shop
▫ Guaranteed actuality ▫ Customer Relationship Management
User accounts Newsletter Feedback forms
• Online shipment tracking • Cost savings
▫ Less personnel ▫ Possibility of locating the warehouse in cheaper areas

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IPYGO 2009
ZARA New technology in business
Task 6
• Consider the implications of
Twitter for your business.

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• What is twitter?
▫ Online real-time microblogging service ▫ Short-messaging (140 characters max) ▫ Broadcast type (no need to answer)

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• Not yet widespread • Possible uses:
▫ Shop to warehouse ▫ Warehouse to warehouse ▫ Client to shop ▫ Group mates

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• Pros
▫ Saves time:
non responding destinators Short message – short to read
▫ Higher performance ▫ Faster response time
• Cons
▫ Wireless infrastructure needed ▫ Twitter-dependency ▫ Many other communication ways already in use ▫ Not widespread

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IPYGO 2009
ZARA
Thanks for your attention Any questions?
http://ipgo.webs.upv.es/the_slitherers/

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