TEST WALKTHROUGH - 2013 S1 Section C
Thursday, 12 September 2013
9:59 a.m.
KEEP IT SHORT AND BRIEF! Concise answers show you know the answer :) 
If you do write something wrong and you write more onto the overflow page, write 'see overflow' at the bottom of the page where you left off. 
Wherever possible, quote directly from the case.
Try to make your answers flow on from each other -- they are structured in such a way that they can be answered linked to each other.
Analyse the case and summarise briefly the situation by identifying Zara's vision, customers, and suppliers. Justify your answers with evidence from the case.
vision: a statement which conveys the values of the company, could include
'customer is at the heart', 'closely linked to their customers'
'special fondness for fashion'
'non-stop flow of information'
customers:
'wealthy upmarket customers'
people interested in fashion
suppliers:
fabric and trim suppliers
garment cutting machine suppliers - Zara 
logistics companies for deliveries
IT suppliers
If you can't find a supplier, remember that every organisation has specialised suppliers as well such as accounting and consultancy.
Using Porter's Five Forces Model, analyse the industry structure of the international fashion industry. Make reasonable assumptions where required and justify your answers with evidence from the case.
Buyer Power - High
Supplier Power - Low
Threat of New Entrants - High
Threat of Substitute Products/Services - Low (clothes = no substitute)
Rivalry among Existing Competitors - High
Using Porter's generic strategies, identify the strategy that Zara is currently following. Justify your answers with evidence from the case.
Differentiation:
high cost:
'wealthy upmarket customers' suggest high cost
broad market: 
'shoppers in 86 countries [in] its network of 1751 stores … in the world's largest cities'
'wide range of people, cultures and generations'
If you think otherwise, and can argue your perspective well, then you can select a different strategy.
Identify the three most important business processes that generate value for Zara. Also identify the corresponding Porter's value chain activity for each process. Justify your answers with evidence from the case ONLY.
Identify some processes:
capturing feedback from customers - 'email or phone call received from stores'
information capturing process - trend information flows daily from database
creating new design lines
modifying existing lines
cutting and assembly of garments
distributions and deliveries - supply chain management
Any process you can justify and back up from the case will be accepted -- importance is subjective but back up the process you've identified.
Which value chain activity matches the most important processes?
Manufacturing garments = Make the product or service
Designing garments = Research and Development (R&D)
Getting feedback from customers = Service after sale
Identify two SPECIFIC information systems that support Zara. Also identify the corresponding broad information system type. For each of these specific systems, describe how they add value to Zara. Justify your answers with evidence from the case.
transaction processing system (TPS) 
sales processing system - business exists to make money and sales
decision support system (DSS) 
manufacturing management system
customer relationship management (CRM)
customer feedback capturing system - can share information with various branches
supply chain management (SCM) 
inventory and raw materials management system - more time for design
distribution processing system - in distribution facilities: sorting, underground tracks
In class we discussed how information systems and technologies enable an organisation and its employees to achieve the following goals:
(a) reduce cycle time
(b) reduce costs
(c) improve customer satisfaction and
(d) gain competitive advantage
For each goal provide an example of how this is achieved in the case and identify a specific key performance indicator (KPI) that Zara could use to measure if the goal is actually being achieved.
Try to structure your answer using a specific system with evidence from the case and 'flow-on' effect (eg. how a system affects something else which affects something which achieves a goal).
(a) 
inventory and raw materials management system: fast inventory turnover = reduction in cycle time
KPI: level of inventory on hand (indicates product obsolescence)
customer feedback capturing system: responding to needs = less delay in designing or better stock management = reduction in cycle time
KPI: level of inventory on hand 
(b) 
distribution processing system: increased automation = less human labour input required = lower costs involved
KPI: expenses across years, lowered cost percentages
(c)
customer feedback capturing system: responding to needs/responding to feedback = maintaining good customer relations/increasing customer satisfaction
KPI: survey results, in-store feedback
(d)
customer feedback capturing system: responding to needs/responding to feedback = appealing to markets = 
KPI: market share in the fashion industry - growing or shrinking?
(NB. More people does not necessarily equate to a greater market share!)