Zara Case Study
Essay by shey24 • March 23, 2018 • Case Study • 3,208 Words (13 Pages) • 2,847 Views
Introduction.
Zara is a Spanish company created in 1975 by Amancio Ortega Gaoan and Rosalia Mera in Galicia. It is part of a multinational group Industria de Disceno Textil (Inditex), with seven Zara-like brand, Masssimo, Pull and Bear, Dutti , Zara home, Bershka, Stradivarius, Uterques and Oysho. Zara is globally present in 93 markets, 2,213 stories and 39 online markets (Inditex annual report, 2016 page 15). Zara sales fashionable designs and accessories for kids, woman and men. As one of the latecomers in this industry Zara took advantage of the latest technology to strategically innovated it business model without scraping the old ways (Lo et AL 2004).
In this consultancy report we will describe Zara current system of organisational performance management (OPM) and make some recommendations to enhance the company performance management system. Area concern will be OPM, stakeholders, risk, quality management and development, finance, customer, people, and implementation issues.
1.0 Organisational performance management (OPM) broadly refer to a series of management operations designed to monitor, measure and adjust output of individual in relation to business output. It is both operational plus strategic, as such apply by management, internally to monitor business effectiveness, and externally to communicate to stakeholders the current statues of the firm (Mackie et al, 2014). In it vision and mission statements Zara pledge to continue innovating their business to improve customers experience. In this regard, the company is committed in attaining it objectives (Pablo 2016).
1.1 Key performance indicators (KPI); KPI provide quantified data on organisational aspects such as input, processes, and output or outcome, which emphases on the past, present and the anticipated future of the firm as an aid to evaluating the degree to which the firm is tracking and achieving its goals (Kravchuk and Schack, 1996). Zara main objective will be outline using the balanced scorecard.
1.2 Balanced scorecard: Balanced scorecard measures OPM from four business point; learning and growth customer knowledge, finance, and internal business process.
Area of performance | Target | Time frame | Primary concern |
Customers | |||
| 65,000 new designs pre-year from 36,000 in 2012. Earnings before interest and tax (EBIT) grow by 40% from 24% in 2012 | 2020 2020 | + Used customer feedback provided by point of sale. + Enhance customer services through staff training + steady expansion |
Employees | |||
| staff turnover reduces by 20% | 10 years | + Improve communication between management and staff |
Processes | |||
| Marginal cost reduced by 5% Asia sale increased to 40% from 20% in 2012 | 2020 2020 | + Outsource more production in Asia + Use the flag shop projection trend in Asia. |
Communities | |||
| Reduces unemployment rate in host nations by 3% Used more nature fibre | yearly yearly | + direct employment + outsource employment +Emission control, waste and dumping plans +Admission to Dow jones sustainability index |
Finance | |||
Financial sustainability | Net income increase by 40% - 30% from 2012 | 2020 | +Optimization of global expansion. +Reduction of cost +TQM practice. |
Source Inditex.
2.0 Stakeholders; Stakeholders represent anybody, person or group of people who can affect or are affected by the organisation, strategies or projects. Two broad categories of stakeholders exist, internal and external (Johnson & Scholes 2002). For any organisation to satisfy it objectives, stakeholders interest most be cohesive or reflected in corporate strategies or strategic direction (Harrison & freeman). Zara stakeholders are Staff, trade union, Customers, Supplies, Community, NGOs, and Shareholders. They commitments are meet or included in the company goals though diverts ways (Inditex annual report, 2016).
Table 2. Zara Stakeholders Perspective
stakeholders | Tools | frequency | Objectives | Key commitment | Samples |
People | -Ethics committee -internal communications -Volunteer packages -Training plus promotion. -Arrangement with UNI Universal union. | -On request -Constant -Constant | -Stimulate staff output. -Support pledge to the code of conduct and accountability | -Esteem for human plus labour right | -trade union -boutique staff -logistics staff -bureau staff |
Customers | -Specialised customer service teams. - Brick-and-mortar and online stores. -Media networks. - Product quality, health and safety teams | -Constant -Constant -Constant -Constant | -Rapid response to customer demand -customer services segmented by country and service to achieve a more personalised care | - integration into the entire business model | -Brick-and-store customers -online store customers -potential customers |
Dealers | - Supplies clusters. -Market and sustainable teams -Outline contract with industry-All -Ethics committee. | -Constant -On request -Constant -Constant | -Warrant Agreement with the code of conduct for producers and suppliers | -upgrade and defence human rights, labour right and universal standards. | -Workers -producers -Trade union -Direct suppliers |
Community | -Social Advisory Board -collaboration with NGOs. -Support & Patronage committee. | -Biannual -Constant -Constant | -Accomplish maximum scope and influence programmes developed | Involvement with economic and social development. | -Media -Government -schools -Civil society -NGOs |
Investors | -Overall shareholder’ conference. -Sustainable indexes -Stockholders relations | -Annual -Annual -Constant | -strengthen position on sustainability indexes -Corporate transparency | - Share interests | -Institutional stockholders -Private stockholders |
Environment | -Social Advisory Board -pledge to NGOs | -Biannual -Constant | - deliberate environment plan | -Admiration for the environment. - Protective of biodiversity | -Governments -Environmental Institutions |
Source; Inditex annual report, 2016.
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