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Unformatted text preview: n invest ment (ROI)—the amo unt earned f ro m an expenditure—o f any such ef f o rt (i.e., what will we get f o r o ur mo ney and ho w lo ng will it take to receive payback?). And designers need to tho ro ughly test the system bef o re deplo yment. At P rada’s Manhattan f lagship sto re, the ef f o rt lo o ked like tech cho sen because it seemed f ashio nable rather than f unctio nal. K E Y TAK E AWAYS Z ara store management and staff use PDAs and POS systems to gather and analyz e customer preference data to plan future designs based on feedback, rather than on hunches and guesswork. Z ara’s combination of vertical integration and technology‐orchestrated supplier coordination, just‐in‐time manufacturing, and logistics allows it to go from design to shelf in days instead of months. Advantages accruing to I nditex include fashion exclusivity, fewer markdowns and sales, lower marketing expenses, and more frequent customer visits. Z ara’s I T expenditures are low by fashion industry standards. The spectacular benefits reaped by Z ara from the deployment of technology have resulted from targeting technology investment at the points in the value chain where it has the greatest impact, and not from the sheer magnitude of the investment. This is in stark contrast to Prada’s experience with in‐store technology deployment. While information technology is just hardware and software, information systems also include data, people, and procedures. I t’s critical for managers to think about systems, rather than just technologies, when planning for and deploying technology‐enabled solutions. QU E S TI ONS AND E XE RC I S E S 1. I n what ways is the Z ara model counterintuitive? I n what ways has Z ara’s model made the firm a better performer than Gap and other competitors? 2. What factors account for a firm’s profit margin? What does Gap focus on? What factors does Z ara focus on to ensure a strong profit margin? 3. How is data captured in Z ara stores? Using what types or classifications of information systems? How does the firm use this data? 4. What role does technology play in...
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