Firms o f ten hedge risks that co uld shut do wn o

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Unformatted text preview: enabling the other elements of Z ara’s counterintuitive strategy? Could the firm execute its strategy without technology? Why or why not? 5. How does technology spending at Z ara compare to that of rivals? Advertising spending? Failed product percentages? Markdowns? 6. What risks are inherent in the conventional practices in the fashion industry? I s Z ara susceptible to these risks? I s Z ara susceptible to different risks? I f so, what are these? 7. Consider the Prada case mentioned in the sidebar “Technology ≠ Systems. ” What did Prada fail to consider when it rolled out the technology in its flagship location? Could this effort have been improved for better results? I f you were put in charge of this kind of effort, what would determine whether you’d go forward with the effort or not? I f you did go forward, what factors would you consider and how might you avoid some of the mistakes made by Prada? 3.3 Moving Forward L E A RN I N G OBJ E C T I V E S 1. Detail how Z ara’s approach counteracts specific factors that Gap has struggled with for over a decade. 2. I dentify the environmental threats that Z ara is likely to face, and consider options available to the firm for addressing these threats. The ho ly grail f o r the strategist is to craf t a sustainable co mpetitive advantage that is dif f icult f o r co mpetito rs to replicate. And f o r nearly two decades Zara has delivered the go o ds. But that’s no t to say the f irm is do ne f acing challenges. Co nsider the limitatio ns o f Zara’s Spain-centric, just-in-time manuf acturing mo del. By mo ving all o f the f irm’s deliveries thro ugh just two lo catio ns, bo th in Spain, the f irm remains ho stage to anything that co uld create a disruptio n in the regio n. Firms o f ten hedge risks that co uld shut do wn o peratio ns—think weather, natural disaster, terro rism, labo r strif e, o r po litical unrest—by spreading f acilities thro ugho ut the glo be. If pro blems o ccur in no rthern Spain, Zara has no such f allback. In additio n to the operat ions vulnerabilities abo ve, the mo del also leaves the f irm po tentially mo re suscep...
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