Cost Analysis Within The Zara Company Marketing Essay

Cost Analysis Within The Zara Company Marketing Essay Describe how Zara uses technology to improve operational responsiveness to customer expectations, and at the same time to reduce costs in certain areas. Zaras main strategy is to give a quick answer to end consumer demands and anticipate consumer trends through information technology and human resources. It operates on the basis of heavy backward vertical integration, working its way from the end consumer all the way back to the manufacturing and distribution. It ensures a very tight control of production through simple and effective IT systems as well as a high tech distribution center (DC.) It realizes cost optimization on its basic items for production and also time optimization in terms of speed to market of its fashion items making use of technology. Zara adapted to trends and differences across markets by interacting regularly with the store managers using the PDA and phone systems to get updates on customer feedback, fashion sense etc. The Point of Sale system (POS) in the store computers also provided valuable sales data to the distribution center which had a mobile tracking system that docked hanging garments in appropriate bar coded areas. The various garments were given Stock Keeping Units (SKUs) and orders were placed from the hand-held computers in the stores twice a week or more, to the distribution center where if particular items were in short supply, allocation decisions were made on the basis of historical sales levels and other considerations. After the orders were approved, the warehouse issued lists for delivery to the stores. Zara design teams tracked customer preferences and used sales information such as sales analysis, store trends and product life cycle information from the store managers, based on a consumption information system to transmit repeat orders and new designs to internal/external suppliers and the DC. The design teams thereby bridged merchandising and the backend of the production process and they developed the right products within the season to meet consumer demands. Zaras product development teams attended high fashion fares and exhibitions to translate the latest seaso nal trends into the designs. Hence, a super fast rate of operational responsiveness to customers was maintained and the DC was more of a place to merchandise than merely for storage. Technology also helped keep Zaras costs under control. By using the POS systems in store computers, handheld PDA devices for store managers and phone systems, accurate information regarding orders required were transmitted to the DC. The SKUs ensured accuracy in terms of which products needed to be produced and in what quantities and the DCs could use all this information and feedback from the design teams to make orders of the right quantity of each kind of product. Thus, inventory costs were very low, runs were limited and production costs were maintained at very manageable levels in spite of the large number of new items that are continuously produced. Zaras factories were also heavily automated, specialized by garment type and focused on the capital intensive parts of the production process, like pattern design and cutting as well as final finishing and inspection. A Just-in-time system was installed in collaboration with Toyota in these factories and this helped in faster comple tion of work and controlling of costs through continuous improvement processes. Management Information System technology plays a crucial role in Zaras customer responsiveness and cost control measures. From what you see in the case, does Zara price to market or on the basis of other factors? Zara always followed a market based pricing method. In each country, Zara always placed more focus on the market prices (local pricing levels) rather than on its own costs to forecast prices of items in particular markets. These forecasts were later overlaid on cost estimates that included all considerations such as distance, tariffs, and taxes and so on to see whether the potential market could achieve profitability in a year or two of opening the first store. Zara followed a different pricing strategy in each country, for example, in Italy and Paris the focus was more quality oriented and so the price of the same items were much higher, however, in Germany where consumers are price sensitive the items were lesser priced. This figured in the different marketing strategy followed in each country. Zara controlled its costs through its production and distribution processes and was positioned in many countries as high fashion at affordable prices which though were centrally determined, much lower than competitor prices for comparable products in its major markets. Percentage margins still held up, this was possible because of the direct efficiencies of short, vertically integrated supply chain, reduced advertising costs, and markdown requirements. Thus Zara competed at reasonable prices through a cost leadership strategy, completing Porters generic strategy through differentiated products and broad segmentation. Zaras customers in many countries bore the extra costs of supplying the items from Spain though the prices were market based, for example, prices were 40% higher in Northern Europe and 70% higher in the Americas than in Spain. This could be seen on the garments price tag which was an atlas to the customers. These higher prices outside Spain affected Zaras positioning overseas as high end instead of mid market range products to better validate the price differences. Like in Mexico where the target consumer base is narrow, it is geared towards the upper and middle class that knows fashion. Moreover, as in Europe, the artificial scarcity that Zara creates of its products in its stores urge the customers to pay the price and buy rather than wait it out. Markdowns are very low for Zara in Europe and elsewhere, 15-20% of its sales as compared to 30-40% for its European peers. Zara does not completely compete on basis of price as the usual Zara customer is not that price sensitive; instead, it competes on fashion and its quick response capability. Zara (2010) has just launched an on-line, e-retail distribution service.     For an apparel retailer what are the advantages and disadvantages of online distribution?   Can Zara make it work? Inditex has long used the internet to promote its various lines and corporate image and is also popular on Facebook, where it has 4.5m fans. Its Smartphone application, launched about a year ago, has been downloaded by 2m people. Zara can very easily make its online e-retail distribution service work successfully. Familiarity with the Zara stores thus provides name recognition for the online retail site, and the combination of customer data gathered by the store and the online retail site (through Google Analytics, for example) could lead to substantial personalized marketing efforts, using various channels. With Zaras policy of a lean advertising budget, an online retail portal will add greatly in terms of branding and awareness. Zara had initially decided not to sell clothes on the internet since the returns rates were too high. However, as of September 2010, Inditex put Zara branded products online for its customers, waiting for online demand to build. Customers can choose from the usual range of paying methods and opt either for a free store pick-up or paid-for postal delivery. The online return and exchange policy is identical to the store system, with shoppers given 30 days to change their minds. iPhone and iPad applications that allowed purchasing will soon be available and online sales will help Zara reach potential customers who have no easy access to physical stores. For an apparel retailer, the advantages of online distribution would be providing convenience to the shoppers to buy from the comfort of their home, save on travel time and costs and have easy access to the products. Customers will have 24 hour access to the shopping platform online and make better buying decisions through online chat and discussion. Researchers identify convenience as a fundamental objective related to online shopping (Schaupp Belanger, 2005). This is relevant to 72% of online shoppers claim that they would rather surf online than go to retail store to attain information about a product (Lokken et al., 2003). Costs on human resources (Vendors, shop assistants, managers) can be saved by the retailer and customers can make relaxed wise buy decisions without pressure from vendors. Infinite shelf space will be available in that, products available at all store locations and around the world without geographical boundaries, to the customers to choose from. Comparison sh opping in terms of styles and prices will be easier on the online portal than in the store for the consumer. Boston Consulting Group analysts Evans and Wurster theorize that the three main strategic draws of online retail are reach, affiliation and richness. Reach is defined as access and connection: how many customers a business can access and how many products it can offer. Moreover, a retailers range of product offerings was traditionally limited by the size of its stores and the cost of carrying inventory while online retailers as intermediaries between customers and suppliers need not necessarily have an inventory at all, only a catalog, often transparent to the customer. Affiliation refers to whose interests are represented by the online retailer who can treat the products from their various vendors more objectively, providing more objective information and better product comparisons for their customers. Richness refers to the depth and detail of information, about products and about customers. Evans and Wurster argue that traditional retailers still are at an advantage to supply expe rt information about products to their customers, and that they also are still in a better position to gather information about product sales and customer profiles and buying patterns. Online retailers are quickly catching up, however, gathering data about customer browsing behavior, purchasing history, and demographics. Online retailers are subsequently able to use this data to provide their customers with a fully customized online shopping environment, including individualized web pages, targeted ads and offers, and specific product suggestions, something traditional retailers cannot effectively do at their retail outlets. Some of the disadvantages of online retail would be the difficulty to gather trend information, product sales and customer suggestions. Zara could remedy this by using analytics and customer feedback forms online that are user friendly and attractive. The experience of shopping in a Zara store would be lost, but Zara would need to make its retail platform very interactive and spellbinding. Zaras prime store locations cost a lot of investment, and the advent of online shopping could mean cannibalization of its retail outlet sales and a waste of upkeep costs, this could put Zara into a fix. Customers will not be able to touch and try the product like they can in an actual store, [t]he likelihood of purchasing on the Internet decreases with increases in product risk (Bhatnagar, Misra, Rao, 20000, p. 100). Apparels in particular had negative rating in online shopping because of it is difficult to feel and see the texture of colour online that is incomparable to going to a retail store. The biggest drawback itself would be the concept of infinite shelf space that an online distribution will bring, for Zara. Being a company that thrives on the creation of artificial scarcity of its products, the online distribution channel will have to be very carefully controlled to ensure that customers buy the products with the same fervour as when they visit the store, knowing that it might not be available the following week. Zara can remedy this situation by advertising only a limited number of units of each product online so customers will know if the numbers are dwindling and that they need to act fast in order to acquire the product just as in the case of the actual store.

Clarion Boys Case Essay

One problem in the Clarion School for Boys case is that employees did not have enough training on the system. On the survey taken, most employees responded that they were dissatisfied with the training they had received and most had training of only 1-3 hours. Since there was little training given on the system, the users were uncomfortable using it. It seemed that if they could not figure something out, they would give up and go back to doing it the old way. The bookkeeper commented, â€Å"I have been trying to finish this month’s books for the last two days, but I am having the same problems as last month. The accounts receivable software program is still giving me difficulties. I think I’ll just do them by hand this month.† When the system was first installed, the staff was excited about it but as time passed and there was no learning progression of the system, people became bored with it and stopped using it as much. Another comment made by the education supervisor was, â€Å"There was a lot of initial excitement about e-mail, but I haven’t heard much about it since then. I know I’ve been too busy to lean it myself, and I missed the training sessions because of other meetings.† I personally worked with a company where a new system was implemented and because of the lack of training and tutorials, there were major problems. For months the system was incorrect, causing many hours of overtime as well as many mess ups that had to be corrected. Familiar to this case, there was not a plan of action nor any goals set or a timeline for certain projects to be mastered. There was a lack of training causing the staff to have little confidence in their abilities to work the system. This problem falls under strategic planning. One component of strategic planning is training. Under strategic planning, the employees should be encouraged to be active in the system. They should be encouraged through training programs and help sessions. The team should establish goals and time lines of what they want to have accomplished by a specific date. In this case, there was not a formal plan or measures set. They were not able to judge how they were doing because they did not make a strategic plan to begin. I think this is a minor problem. I think the major problem is that once the system was implemented, there was no enforcement created. It seemed that the users did not want to get out of their comfort zone and learn something new. There was not much communication at the beginning and everyone seemed to be doing their own thing.

Targeted Killings: The Case of Anwar al-Awlaki

The killing of al-Awlaki was a violation of U.S. due process procedures. Anwar al-Awlaki had US and Yemen nationality. Since the American Civil War, this has seemed to be the first time the US government has deliberately killed a US citizen as a wartime enemy without trial. The president's power is not examined. This approach raises the question about who the next target during the president's execution will be and whether the authorities will take similar actions in the United States in the future. There may be a situation where no one knows the evidence and then the government tells everyone evidence what they want to tell. Ben Wizner, a lawyer for the American Civil Liberties Union, said: â€Å"If the existence of the Constitution is valuable, it certainly means that the President has no power to be unexamined and cannot rashly execute any American citizen who he considers to be a public enemy of the country.† The manslaughter occurred in this killing and violated in International Humanitarian Law. In the process of facing anti-terrorism, misjudgment and missed judgment are problems that cannot be solved in the forecast. The number of people killed in Pakistan due to drone attacks since 2004 has been between 2,500 and 4,000, and most of them have been classified as â€Å"extremists† by the US government. In the years that followed, thousands of innocent people in Pakistan could lead to premature death because of the misjudgment of the drone. â€Å"Anwar Al-Awlaki and Samir Khan were killed in a U.S. drone strike in Yemen on September 30, 2011. Abdulrahman Al-Awlaki, a 16-year-old boy born in Denver, was killed in a U.S. drone strike in Yemen on October 14, 2011, while he was eating dinner at an outdoor restaurant with his teenage cousin.† 90% of the deceased are not the target of the US military, but they are all labeled by the US as â€Å"the enemy that has been killed in action.† Anyone who appears to be near the established attack site is considered â€Å"accomplice† and there is no conclusive evidence that they should be killed. However, when the US military implemented the drone assassination plan, the assassination target was not necessarily a serious threat to the United States. Most of the casualties caused by drone strikes were innocent people, which caused the US government and the Pentagon to be blamed by the outside world. Before the fight against terrorism, the United States did not prove that there were no other non-military ways to choose from. It was more like an after-the-fact retaliation. In the process, the United States over-emphasized its own interests by slogans against terrorism, or the value is imposed on people, and the drone attacking terrorist crimes violates the sovereignty of other countries, making the contradictions even more intensified. Secondly, the U.S. attack on drones does not conform to the principle of proportionality, and it has harmed many innocent civilians while attacking terrorism. The US military still carried out bombing missions while knowing that there were civilian houses in the area where it was attacked. When the target cannot be clearly identified, the US military will call these innocent people â€Å"the enemy of death.† Therefore, the United States' dispatch of drones to the territory of other countries for military strikes against terrorism does not meet the constitutional elements of â€Å"pre-self-defense rights† and cannot be recognized as legitimate. On November 25, 2013, in San Francisco, the demonstrators put on a drone model against Obama's use of drone to counter-terrorism policies. The use of drones had put a lot of pressure on the US government. The use of drones needed to become more rigorous in the future. The US military is trying to improve the technology of this drone. On May 2013, the White House announced a new guide to counter-terrorism operations, placing more restrictions on drone attack plans. In a speech, Obama announced that drone operations will be strictly targeted at those who â€Å"form a sustained and powerful threat to the American people.† Obama also stressed that â€Å"only when the target of the attack poses a threat to US security, the assassination can only be initiated, and it must be ensured that the assassination will not harm civilians.† This incident created a new precedent in how the U.S. propagates its war on terror. The US military is making more efforts on drones to resist terrorism. Since the terrorist attacks of September 11th, the use of drones to combat individuals has become a frequent means of US counter-terrorism operations. These targeted killings are effective in many ways. Military priority policies are expected to bring greater transparency to drone strikes and better coordinate these actions in accordance with the spirit of certain aspects of international law. Since the beginning of the 21st century, drones have rapidly developed into a new type of air power and have shown an increasingly important role in modern warfare. The United States is the world's number one military power. It is currently at the forefront of military drone technology. However, the US military has never relaxed its exploration and development of drone technology. The research institute headed by the US Defense Advanced Research Projects Agency and the United States. The industry has jointly launched a series of technical projects involving cognitive electronic countermeasures, precision fire support, coordinated navigation and bee colony-enabled operations, etc., providing technical upgrades for the US military's future military drones. Drones have made great contributions to the US military in the war on terror. UAVs are playing an increasingly important role. Being able to fight 24 hours a day, delivering real-time activity videos to control personnel and pinpointing targets, makes drones indispensable in war. Finally, the use of drones in traditional wars, armed conflicts, or counter-terrorism operations with modern characteristics should be applied to international humanitarian law. From the perspective of international law, it is necessary to incorporate drone attacks into the normative system, giving them clear definitions and reasonable regulations, and prevent some countries from exploiting the loopholes and contradictions of international law to undermine the world order. In international law, whether the acts involving drones against terrorists violate the relevant rules of international humanitarian law. Clearing prohibitions should be made to solve the problem of defining too general and vague. Furthermore, peace and stability in the world situation are of paramount importance. As more and more countries use drones, they can hold international conferences about drone attacks and call on relevant countries to sign international treaties.

The Demise Of The Andersen Accounting - 1746 Words

The Enron scandal was one of the most notorious bankruptcies of all time. Many people know about the energy titan’s downfall but less realize that it was also one of the biggest auditing blunders in American corporate history, leading to the dissolution of the Arthur Andersen LLP, which at the time was one of the five largest auditing and accountancy partnerships in the world. The most intriguing aspect of this case is that Andersen was eventually cleared by the United States Supreme Court, yet the company still failed to live on due to its tarnished reputation stemming from its unethical behaviors. The pressure to generate revenue for clients while simultaneously auditing their books became too large a burden for the firm and they eventually resorted to unethical means to achieve their objectives. 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