Business and Management
Submitted By lica
The volatility and dynamics of the business environment represent stimulations to change and expand new working areas that possibly would improve management goals. Today’s business environment deals and intersects with different factors. As a result, the working environment becomes a complex system which should remain unique and reliable to all stakeholders. Rapidly changing society, technologies and trends make the big fashion companies to propose not just a brand but also a fast fashion brand accessible to all eager customers.
One of companies “…that introduced the idea of fast fashion some two decades ago, then developed a highly centralized and often studied—but rarely duplicated—design, manufacturing, and distribution system” (Berfield & Baigorri, 2013) is Zara International. Zara International belongs to, “…Spanish retail giant Inditex owns some of Europe's most popular clothing stores and is rapidly expanding around the world” (Inditex Group (Zara), n.d. para.1).
After releasing the company Zara International by Index Group, parent company, Zara’s brand becomes one of the most popular in clothing industry worldwide and continues to keep the position despite of the fierce competition.
The study case Zara International: Fashion at the Speed of Light would reveal and emphasise the main characteristics of the popularity and particularity of the fast fashion industry through analysis some of the aspects and rules of the Spanish company, Zara International.
DISCUSSION OF FINDINGS
It is well-known that every organization would like to excel in some criteria specific to their sphere of activity. Due to fast changing trends, the management should acknowledge that they should continuously improve and motivate all working parts of the company. Because the main purpose of an organization is to achieve the established objectives, the management has to organize a good system to reach them.
According to the definition of the system, the management should understand the company as a system of interrelated parts that operate together to accomplish a common purpose. Therefore, referring towards our case study, Zara International has an organizational system well established with subsystems that interrelate together to achieve the common purpose, bringing latest and higher fashions to customers. Zara’s system is composed of subsystems that integrate as business functions of the value-chain as possible. They have departments such as design of the product, production, marketing, distribution and customer services. Their complex system has the possibility of just-in time production and the accessibility to keep inventory system in the same time. This fact makes their company to be forward others. The distribution centres could perform an order in European stores just in twenty-four hours and forty-eight hours in America and Asian stores. Their well-performed system helps Zara International to have “… high levels of quality and customer satisfaction with product time-to-market processes of 15 days” (Inditex Group (Zara), n.d. para. 3).
Having available high technologies as handheld computers, stores managers could reorder the desired garments less than an hour that emphasises how quickly the subsystems interrelate between them to achieve the common goal fast fashion clothing available to customers. As soon as the latest fashions are finished, they are distributed to stores worldwide twice a week that definitely makes Zara International to be “With so many diverse brands, businesses and locations - in a highly competitive industry - its growth has to be managed carefully. That's why Inditex turned to Telefónica to help harmonise its operations under one overarching communications platform” (Inditex Group (Zara), n.d. para.1).
Zara’s International organizational network of subsystem cooperates together that leads the company to achieve the performance criteria and makes the company exclusive:
Inditex required a cost effective communication system across its operations, which includes more than 100 companies associated with its business of textile design, manufacturing and distribution. The company also had to upgrade its shops, the main point of contact with customers. Its ICT systems had to be able to handle, and utilise, increasing data flows while enabling employees to provide a fast and effective customer service (Inditex Group (Zara), n.d. para.4).
As stated before, the main focus of the company is to achieve performance. Therefore, Zara International accomplishes the performance due to the management contingency thinking. For instance, the management tries to makes Zara International one of the first worldwide retailers that offers to style-savvy customers latest brands very quickly and in small batches, twice a week. According to the case, a high degree of specialization makes Zara’s fashion style being unique and recognized worldwide. So, the company is focused on the ability to design, manufacture and distribute emerging fashions.
Another example of contingency thinking is the achieved performance to be recognized and awarded as a brand after launching “…the idea of fast fashion some two decades ago, then developed a highly centralized…system” (Berfield & Baigorri, 2013). The management organized the company as a centralized system that brought the company to success around the world. Today, the company is trying to outsource production; however, it still manufactures about half of production in hometown La Coruna, Spain. “The building is officially known as the Cube. Those who work there think of it as the brain.
The Cube is central command for a fashion empire built on an unconventional idea: speed and responsiveness are more important than cost” (Berfield & Baigorri, 2013).
Keeping a leader position in fast fashion trends is a difficult work that should be performed every day. Zara International is doing well the job due to another strategy based on critical thinking. The attention to details was one of the company purposes. For example, management believes that interior and exterior design of stores is one the most important keys to make the brand recognized anywhere.
Not only has Inditex been opening new stores around the world, the company has been bringing its stores up-to-date with cutting edge ICT and new interior design. In the newly modernised shop premises, features like ADSL for POS (point of sale) have created fast and uninterrupted transactions… Inditex is well known for the fresh image of its products and brands. Therefore, the visual and aesthetic appearance of its retail stores is a critical component of its brand and the ICT had to play its part in getting the look of the stores just right (Inditex Group (Zara), n.d. para.6).
According to the case, Zara International could be included in the list of learning companies because it is a company that changes continuously and adapts to the new market demands all the time. Zara International is a company that changed the vision of fashion industry by making it quickly available to customers. Having a huge network around the world, more than one thousand four hundred retail stores, confirms the fact that the company is a learning organization. The most important source that assists in learning process is the preferences of their customers. Due to their complex system, the management could know just in an hour or less which the hottest items are and which are not. Therefore, Zara International adapts to the requirements and preferences of the style-savvy customers very quickly. Avoiding the distribution delays and maintaining the position of one of the first Index Group companies that expands worldwide, Zara International, definitely, is a learning organization.
Nowadays, all around us change continuously and the management of Zara International found out that the fashion industry should change too. So, they understood the “hard facts” that should work really well for them in achieving their desired purposes. From theory point of view, the company used the principle of the Evidence-Based Management that involves taking the decisions based on hard facts. In Zara’s case “hard fact” was the ability to create and bring latest fashions to customers, regarding their preferences, at the beginning in Spain then worldwide. This achievement was possible due to management’s concentration on the purpose of the fast and qualitative products. As a result, the company received the right to be named Europe’s largest fashion retailer. As previously mentioned, Zara International is expanding her brand around the world, so the management knows the strategies that should be taken upon this accomplishment. Continuing to learn from own experience, customers, competitors, and from others helps the management to remain in the right path towards what really characterizes the twenty-first-century leadership. Moreover, the company does the right things that really count for them such as going worldwide and maintaining the same performance in fast-fashion retailers. While Zara International wants to keep performance as a leader in fashions and to have a competitive advantage, the management should not forget about environmental issues and ethical values that certainly would add value to organization. In my opinion, Zara International meets requirements of the twenty-first-century leadership by having inspiring leaders, global strategies and high technologies that invoke continuously learning.
The case Zara International: Fashion at the speed of Light presents a good example of a modern company with appropriate strategies to manage a business. Analyzing the Zara International from different points of view, we could conclude that the company continuously changes and develops based on own experience, competitors and preferences of customers. As a company that evolves and expands new territories around the word is well-managed despite of threats of inefficiency of the supply chain. Zara grows internationally without diluting the identity of her brand. As long as the demand of the Zara’s garments exists, I believe that the company would perform well now and in the future.