HowwouldyouadviseSalgadotoproceedontheissueofupgradingZara’sPOSsystem?ToanswerthequestionwhetherornotupgradingZara’sPossystem,wemustagreethatthePossystemshouldhelpthecompanytouseinformationwiselytoaddvaluetotheirperformanceinsomecriticalfieldssuchasfinancing,marketing,operationandsoon.Moreover,thePossystemoughttobesuitablefor3dimensionsincludingorganization,technologyandpeople.ShouldthecompanyupgradethePOSterminalstoamodernoperatingsystem?Atpresent,Zara’sPossystemgivessupporttoitsdailyoperatingandmanagement.Managersandemployeesinheadquarteraswellasvendormembersallovertheworlduseitwell.However,thereisacontradictionwecan’tignore.Zara’sPOSsystemrunsonDOSwithoutassistofthesupplier,Microsoft,whichleadstoatroublethatZaradoesn’thavePOSsoftwarethatworkswithitsPOShardware.Inotherwords,Zarafacesadilemma.Someholdtheviewpointthatit’snotnecessarytoupdatethePOSterminaltoamodernoperatingsystem.OnereasonisthatmembersininformationsystemdepartmentareabletocompileDOS-compatibleprograms.AnotherreasonisthatupgradingPOSsystemmaypushstoremanagersandemployeesinamessandittakestimetoadapttothenewone.Inaddition,ZaraisabigcustomerforDOS.That’stosayZarahasthepowertobargain,whichmeansalowercost.However,POSsystemwalksontwolegs,thesoftwareandhardware.Inthelongterm,Zaraneedstoupgradeit.SinceZaraisbecomingmoreandmoreglobalwithincreasingtrendinrevenue,profitandbranchesaroundtheworld.Forfurtherdevelopment,Zarahadbetterkeeppacewithinternationalconventions.Afterall,fromtechnologicalangle,Zara’ssystemfallsbehind.What’smore,noonecanpromisehardwarewithincompatiblesoftwarewillalwaysrunsmoothly.Whatifitbreaksdown?Nosupport.YoucanimaginethedamagetoZara.Naturally,thetransitionneedsaspecificplan.Maybe,theprocessfrompointtosurface,takingexternalandinternalenvironmentintoconsideration,isagoodchoice.Shouldthecompanybuildin-storenetworks?Yes,itshouldbuildin-storenetworks.Now,thePOSterminalswerenotconnectedtoanotheroneviaanyin-storynetwork,soemployeescopieddailysalestotalsfromeachterminalontoafloppydisk,thecarriedthesediskstotheonemodem-equippedterminaltoaccomplishthetransition.AndmodernPOSterminals,sincetheywerereallymodernPCs,couldaccommodateevenmoresophisticatedcapabilities,especiallynetworkswithinstoresandacrossthecompany.Wirelessnetworkswereparticularlyintriguingsincetheyweremuchcheapertoinstallwithinastore.Withawirelessnetworkinplace,itwouldnolongerbenecessarytocarryfloppydisksaroundthestoreattheendofeachbusinessdaytotallyuptotalsales.Inaword,buildingin-storenetworkscansavemoremoneyforthecompany,andimproveitsefficiency.Shouldthecompanygiveemployeestheabilitytolookupinventorybalancesforitemsintheirownstores?Wethinkthecompanyshouldgiveemployeestheabilitytolookupinventorybalancesforitemsintheirownstores.Nowinthecompany,orderingisstandardizedaroundtheworld.Storepersonnelcannotlookuptheirinventorybalancesonanyin-storecomputer,socanvassingthestorewastheonlywaytolearnaboutstocklevels.Inthisway,onlythestoremanagersknowwhathadbeensold.Thecompanyshouldgiveemployeesthepowertocheckinventorybalancesforitemsintheirownstores.Firstly,theemployeeswillknowhowwelltheywork.Iftheyhavefinishedtheachievementwell,theywilldotheworkenthusiastically.Ifnot,theywillmakeeffortstorealizegoal.Secondly,iftheemployeesknowwhatkindofgarmentsellsbetterorworse,theywilltakethedifferentstrategieswhentheysellthedifferentkindsofgarments,whatwillearnmoremoneyforZara.Thirdly,theemployeescangivesuggeststostoremanagersaboutordering,whichwillimprovetheemployees'satisfactionandparticipation.Inaword,ifthecompanygivesemployeestheability,Zarawillbemorelikelytomakeabigdifferenceandrealizethebusinessstrategy.(4)Shouldthecompanygiveemployeestheabilitytolookupinventorybalancesforitemsinotherstores?Ourteamholdstheopinionthatthecompanyshouldgiveemployeestheabilitytolookupinventorybalancesforitemsinotherstores.Thereasonsareasfollows:Itwouldpromotethecompany’sinternalinformationchange.Eachbranchwillhavemoreaccesstoparticipateintheoperation.3)Itwillmakegreatcontributiontoprovidingmuchmoreusefulinformationforshopgoodstransferamongnearbystores.4)Wealsobelievethattheautomatedlookupcanbetrust---whetheronlineinventorybalancesaregenerallyaccurateinretailenvironments.Eachbranchalsowantstoshowthelocalconsumer’sdemandwiththerealsalesdate.WhatisZARA’sbusinessstrategy?Itsbusinessstrategyismainlydifferentiationintegratedwithcostleadership.Thedifferentiationrevealson:therapidresponseforthemarketdemand,thefashionabledesignwithinextremelyshortperiodcomparedwithitscompetitors,theconstantlychangingshoplayoutsandtheart-designedwindowdisplay.Intermsofcostleadership,itprovidesproductswithrelativelyreasonableprice,whichjust“canbeworn10times”,byconductinglittleadvertisingsandverticallyintegratedmanufacturingoperationanddistributionsystembasedoninformationsystem.HowZararealizethestrategy?Asfarasweareconcerned,wethinkZararealizethestrategythroughthreeaspects:Businessmodel,Operations,IT.Thenwewillexpoundtheseaspects.BusinessModelThebusinessidea----retailing,manufacturingandapparelindustryintegrated.SystemformedinearlytimeZara→informationtechnologyInternallyownedsuppliersZara→informationtechnologyInternallyownedsuppliersRetailchainsBusinessmodelofZaraDetailanalysisoftheZarabusinessmodelwillstateinthreeaspects,asfollowing：First,thetwobeliefsoftheadministratorsensurethespeedanddecisionmaking.Oneisthatrespondingquicklytothedemandsoftargetcustomersbasedonspecialmarketingposition,insteadofsimplyrelyingonthepersuasivenessofmarketingtopushclothes.Andtheotheristhattakingadvantageoftheintelligenceandtrustingthejudgmentofemployees,insteadofrelyingonasmallsetofdecisionmakers.Thedetailsofthisdecisionmethodareasfollowings：Storemanagershavemoreresponsibilities;Thetwo“commercials”isafeatureofZara,suchashaving2designersand2productionmanagersofeveryteam,andthestoreproductmanagersservedasLaCoruna’smaininterfacewithZarastores;Employeeswithinthecommercialfunctionexercisedautonomy;Emphasisondecentralizeddecisionmaking.Secondisthemarketing,merchandisingandadvertising.Wecansummarizeitasthefivemainstrategies.Virtuallynoadvertising,placingadsonlytwiceayeartoannouncetheopeningofnewstores;Payingattentiononthelocation;Thepricesetting’sregulation;Noproducing“classics”,alwaysinstyle;NeversellingclothesovertheInternet.Thelastpointisaboutfinancialandgrowth.Forexample,Zaragenerated73.3%ofthegroup’ssales,continuingatrendofrapidandprofitablegrowth,andhaveampleroomforgrowthexistingwithinitscurrentmarkets.Soitwouldnotbenecessarytobuildentirelynewproductionanddistributionnetworksinordertosupportfuturegrowth.OperationsZaraestablishedthreecyclicalprocesses-ordering,fulfillmentanddesignandmanufacturingtooperatewell.Toorder,everymajorsectionofaZarastoreplacedanordertoLaCorunatwiceaweek,andtheorderincludedbothreplenishmentofexistingitemsandinitialrequestsfornewlyavailablegarments.Tofulfillment,therearecommercialsatLaCoruna,andtheirjobwastomatchwiththesupplyoffinishedclothescomingfromfactoriesintotheDCwiththestores’demandsfortheseitems.Todesignandmanufacture,Zara’sverticallyintegratedmanufacturingoperationsenabledtheconstantintroductionofnewitemsandalsoensuredshortleadtimes.Productionrequirementsweredistributedacrossanetworkofspecializedfacilitiesthatquicklyproducedanddeliveredtherequiredgoods.ITSStoresolutionsAdministrativesystemsLogisticssupportFirst,theyweredividedinto3groups,whichyoucanseefromthechartaboveclearly.ThenatLaCoruna,severalinformationsystemswereusedtosupporttheoperationsofZara.Applicationskepttrackofthe“theoreticalinventory”.Andtheyhavesomegoodequipmentsandsophisticatedtechnologiesinfacto