Discussion: Zara A Global Retail

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Discussion: Zara A Global Retail

Discussion: Zara A Global Retail

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Analyze Google ’ s strategy and the type of market disruption it has created using a dynamic environment perspective.

Sources: Adapted from Michelle Colin , “ Champions of Innovation ,” Businessweek 3989 (June 1 8 , 2006 ), 18–26 , http://www.bloomberg. com/bw/stories/2006‐06‐18/champions‐of‐innovation; Vauhini Vara , “ Pleasing Google ’ s Tech‐Savvy Staff ” (March 18, 2008 ) , B6; Jason Bloomberg , “ Google ’ s Three‐Pronged Enterprise Strategy ,” Forbes Online (December 12, 2014 ) ; and Connor Forrest , “ Four Ways Google Makes Money ,” TechRepublic (January 16, 2015 ) , http://www.techrepublic.com/article/four‐ways‐google‐makes‐money‐ outside‐of‐advertising/ (accessed August 21, 2015 ).

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2 chapter

This chapter introduces the concept of building competitive advantage using information systems‐based applications. It begins with a discussion of a set of eras that describe the use of information resources historically. It then presents information resources as strategic tools, discussing information technology ( IT ) assets and IT capabilities. Michael Porter ’ s Five Com- petitive Forces model then provides a framework for discussing strategic advantage, and his Value Chain model addresses tactical ways organizations link their business processes to create strategic partnerships. We then introduce the Piccoli and Ive ’ s model to show how strategic advantage may be sustained in light of competitive barriers while the Resource‐ Based View focuses on gaining and maintaining strategic advantage through information and other resources of the fi rm. The chapter concludes with a brief discussion of strategic alliances, co‐opetition, risks of strategic use of IT, and cocreating IT and business strategy. Just as a note: this chapter uses the terms competitive advantage and strategic advantage interchangeably.

1 Inditex Web site, http://www.inditex.com/en/who_we_are/concepts/zara (accessed February 20, 2012); http://www.marinabaysands. com/shopping/zara.html (accessed May 2, 2015).

Strategic Use of Information Resources

Zara , a global retail and apparel manufacturer based in Arteixo, Spain, needed a dynamic business model to keep up with the ever‐changing demands of its customers and industry. At the heart of its model was a set of business processes and an information system that linked demand to manufactur- ing and manufacturing to distribution. The strategy at Zara stores was simply to have a continuous fl ow of new products that were typically in limited supply. As a result, regular customers visited their stores often—an average of 17 times a year whereas many retail stores averaged only four times a year. When customers saw something they liked, they bought it on the spot because they knew it would probably be gone the next time they visited the store. The result was a very loyal and satisfi ed customer base and a wildly profi table business model.

How did Zara do it? It was possible in part because the company aligned its information system strategy with its business strategy. Its corporate Web site gave some insight:

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