Case studies are frequently done at the MBA level for business students. One such company that has been done quite frequently is Zara. A way to do a Zara case study is to compare the fashion giant with another, such as The Gap. Paper Masters will custom write a case study such as this for any corporation you need. Below is a comparison of what The Gap needs to do to insure its market share over Zara.
To effectively compete with Zara, The Gap must do the following:
- Redesign its internal business systems with particular emphasis on shortening its supply cycle and obtaining market information from customers. Zara's primary strength lies in its vertically integrated supply chain, which reduces inventory costs and enables the rapid production of relatively small batches to minimize the financial impact of fashion misses. Zara also relies heavily on data regarding sales and customer preferences in determining production and a marketing strategy that creates a sense of urgency to promote immediate sales.
- The Gap should engage in backward integration to take direct control of a higher percentage of its production to reduce production demand fluctuations and to increase response speed to market preferences. This requires that the firm redesign its supply chain to shorten cycle times, with both external and internal production flowing to a central distribution hub.
- Products should be shipped in small batches from the distribution hub to the retail stores twice a week to minimize the amount of inventory on hand in the stores and in the distribution hub. Air transportation by third-party carriers to locations remote from the distribution hub is financially viable, with the cost of rapid delivery offset by the reduction in inventory carrying costs.
Zara and Outsourcing and Use of Information Technology
Outsourcing could be retained for low-end items such as tee shirts or component items such as zippers. The firm's direct production, however, should focus on the high end products and the ability to produce small batches in relatively short periods of time. The GAP should also insure that it is making appropriate use of information technology to connect points of sale with distribution and production centers. This type of system can use an electronic data interchange system based on either bar coding or radio frequency tags monitors the location of inventory in the supply chain. It can facilitate the development of a docking system in which inventory is essentially transshipped at the distribution hub, with inventory held for only a brief period of time.