IT STRATEGY

Presented by: Anurag Iyengar Kamal Syal Rahul Verma Vishwesh Samant

Contents
Need for IT strategy
Strategy Grid - ZARA Strategy Alignment - ZARA

Need for IT Strategy

IT helps to design business model for operational effectiveness IT helps accelerate value chain process

IT Strategy in Zara

With the help of IT, it becomes possible to venture into new business areas like online retailing To support the core business strategy Rapid response to market demands, decentralized decision-making, having better inventory and better connection between stores.

What technological changes occur with time in Zara

Till 2006, Zara hardly changed their IT infrastructure,

No major IT/IS implementation were done . In 2006,they upgrade their DOS based Point-of-Sale (POS) system which resulted in better check and count inventory, better information retrieving ability and better connection between stores. In Fall 2010, they introduced Online retailing, especially for US customers .In 2011, they introduced online retailing at a global level. Now, they are providing online retailing in 22 countries.

IT strategy for Dell and Amazon

Amazon or Dell has a common revenue generating IT strategy to support their core business of selling directly to Customer via online mode, which helps rule out distributor and retailer cost in supply chain. IT strategy of Dell and Amazon turned out to be extremely successful for them.

Strategy Grid - ZARA

High

Impact on Business operations

Factory

Decreased Switching Cost

Strategic

Change Basis of Competition

Preference for reliable IT systems

Aversion to risk arising out of moving to a newer applications Low cost of advertising and IT personnel
Support

Developing internal relationship within Zara for smooth function of supply chain at large

Turnaround

Critical day to day operation like order by store support, logistic support, administration support, POS & PDA
Low

-To develop online retailing -To explore business in new emerging markets like Asia, US Lower - Diversification
High

Low

Increased Supplier Power

Barrier of Entry

Impact on strategy

Strategy Grid ZARA ( Five forces)

Barrier of Entry IT helped ZARA to enter into online fashion market where other brands were already established ZARA is able to manage the inventory and production forecast through software's likePOD,POC etc. Zara provided online design availability which further enhance Buyers power. ZARA IT strategy has maintained minimum switching cost on changing fashion patters in production Store managers regularly update product manager & commercial team about latest trend in market which helps them bringing new product in short time. ZARA is ahead of competitors by producing latest trend s at affordable rate, whereas other competitors push new design in market at higher rate.
8

Supplier Power

Buyer Power Switching costs

Existing Product/ Services Basis of Competition

Strategy Alignment - ZARA

Business
- Supply chain Network - Decentralized decision-making - Creating a Scarcity value - Low advertising cost(Almost Nil)

IT
-PDAs and POS Systems based on DOS. Should it be changed to Windows? -Should investment in IT be encourage in Zara.

Strategy Capabilities

-Vertical integration - Fast and continuous communication - Meticulous store design, layout and location.

-To run the store system with minimum down time -To develop in-house IT system as per business requirement - Self designing of applications(Customization) - Outdated systems and applications