Integrated Business Management Assignment 2020

Integrated Business Management

Introduction

The term Integrated Business Management (IBP) refers to the effective planning of the business which is further expanded as per the principles of the S&OP throughout the supply chain , product portfolios, customer portfolios, demands of the concerned customer and the tactical planning so that the overall operations can be completely streamline and well oiled in nature.

In addition to this we are also going to explain about the phases of the integrated business management and there we are going to explain about the Co-ordination phase, and thencome to the Business Process control, thirdly we are going to explain about the automation phase and the last but the most important phase is the integration phase.

In addition to this we are also going to provide a vivid and a detailed account about the marketing strategy of Zara and the way it is quite effective in nature and then we are also going to explain about the ways by which the supply chain management of Zara works in an efficient and well oiled manner.

In this report we are also going to describe about the integration of the marketing and the kind of responses that are obtained from the end side customer of Zara fashion store (Cheng,2019).

Business concept 1

Marketing strategy of Zara

The CEO and the founder of the Zara Armancio Ortega, becomes an essential part of the organization because the vision of the organization along with the management style of the organization is set by him.

He has an exceptional management and leadership style whereby his preference is for personal and close interactions and he has a down-to-earth, humble and hands on management style.

Management style of the organization is very customer focused, and this company always looking for comprehending the needs of their consumers and they try their best to fulfil the needs of their customers (Mayrhofer and Roederer2016).

As per the expectations of their consumers they offer their product. Moreover, Zara depend heavily on their store managers to recognize the demand of their consumers in order to translate this back into the approach of their manufacturing.

Marketing strategy of the company takes a transformational approach because employees of the company are encouraged to go beyond the thing what is anticipated of them and endorse an entrepreneurial culture.

It becomes apparent in their management style along with their leadership style of open communication, teamwork and self-imposed high standards by means of which a clear guidance and direction is led not only for their employees but also for their organization as a whole.

As the development and growth of their employee is encouraged by them through offering various program for training, their customer focused approach is as well expanded to their employees (Özlen and Handukic2013).

On the basis of the above it becomes clear that the company have an effective leadership and management style in places, because an in-depth understanding and learning within their business model is promoted by the company.

In addition, management style of Zara correlates with the strategy of marketing that is used by the company within their business model. The target group mainly includes women aged 18-40 years who work in a big city or receive higher education, are in middle income and are generally interested in fashion trends and in their appearance.

The company has established itself as a store that sells a variety of medium quality, affordable fashionable apparel and has stores in 70 countries around the world. Pricing strategies are generally affordable and reasonable.

Zara’s marketing strategy differentiates competitors, creating a customer-centric product that separates Zara from competitors,through bringing a new look to the category of plus size, feeding on the existing Zara names and values related with the brand (Gamboa and Gonçalves2014).

In terms of marketing strategy of the company, it monitors the feedbacks of their consumers and then response as per the feedbacks. Store managers of the company are far from minimum wage employees.

Moreover, store managers are knew the way to pay attention to the words of their consumers and they are experts in observation and fashion (Mo 2015). Through including consumers in the improvement and design procedure, huge brand loyalty is built by the company.

An anti-marketing approach is as well used by the company. Only 0.3 % of the sales of the company are spent by them on advertising and Zara do not have much marketing to speak of.

This is why Zara becomes quite different from other company. Instead of investing on advertising, Zara is more likely to invest more on their location and refurbishments of their stores. Generally high streets retail areas are selected by the company to set up their stores (SANJAYAand HAVRANEK 2014).

Integrated Business Management Assignment 2020

Business Concept 2

Supply chain management of Zara

Zara comes to be one of the most profitable fashion brand across the globe by the help of its lean and agile supply chain and able to sustain their growth and competitive advantage in every year.

Deliveries are taken by the stores twice per week and they can acquire ordered inventory among two days after placing their orders. After the shipment, items are arrived at the stores first then directly go on to sales floor.

By this it becomes possible for the managers of the stores to get the product as per the need of their consumers (Lu 2014).

With the evolvement of the consumers’ preferences about their style and appearance, Zara stores respond practically in real time. This is regarded as a great business model that helps the company to sustain their growth in the fashion industry.

It denotes that items that are sold by the company, most of its high margin along with exceptional items of fashion are produced on the basis of the highly accurate, short term demand forecasts.

Sales of many fashion retailers has been hurt by the Instability in the worldwide economy since 2008, Zara has acquired profitable growth in this period because of its lean and agile supply chain.

However, the ability of the company to set up an agile supply chain depends on some exceptional approaches that are mentioned below (Zhelyazkov2011).

Procurement methodology: procurement team of the company does not work on the amount of the finished clothes but on the quantity of the raw materials which are required for manufacturing the clothes. It assists the company to reduce the amount of the waste materials.

Proximity of Supply: all of the suppliers of the company are close to the factories of Zara and co-operate tighly, so the company can be able to place the on the basis of everyday-need (Chu 2016.).

Production feedback: feedback of the consumers is given to the specialists of the market by the stores managers and eventually that information is passed to the production team and to the design team as well. A quick and agile response to the market is enabled by this rapid feedback (Yip and Huang 2016).

Local Manufacturing: a drastically different approach is presented by the company n compare to their competitors.

As a replacement for outsourcing the products in Easter Europe or in Asia, Zara decided to manufacture their cloth items in Galicia.

While low-cost production is possible in other regions, the market from time to time, reducing shipping costs, changing tariffs and spending less in politics, is more than just the reasons. The erosion also voluntarily keeps 85% of its plants inactive, ready to meet the changing needs of the world.

Demand forecasting: Zara acquire the benefits from a highly efficient inventory management model that helps determine the exact amount of items needed for each store. They run very small batches twice a week.

The result is a scarcity, some items not for sale, and if the test fails, one has plenty of time to try different styles because of their responsive supply chain). This allows Zara to find the right product almost every time in the end (Martínez,et al.2015).

Integration of Marketing and Responsiveness

It is an evident fact to state that Zara is a very big brand in the field of fashion accessories and dresses and it is quite obvious that they have large number of end side customers all across the globe and to satisfy their needs in an effective manner it is quite important they have a good integration among the marketing strategy they have and the operations that are associated with the supply chain management.

Now at first we are going to provide a detailed and a vivid account about the supply chain management of Zara and the phases are:

Quick Response to Demand

The kind of model that Zara as a company follows is termed as pull model and this model is considered to be an innovative idea in the supply chain mechanism of Zara.

First they make an in depth survey of the market trends and the level up to which the sales can get projected and then depending upon that they generally produce nearly 1000 apparel designs.

Thereafter they monitor the that what kind of designs are generally being purchased by the end side customer and that in turn plays an important role in satisfying the needs of the upcoming customers and contribute positively to the overall productivity of Zara (Gunduz, 2020 ).

Small Batch Productions

It is an evident fact to state in this report that Zara generally prefers to produce each designer apparels in a small batch and that in turn helps them to understand that up to what extent their products are being accepted by the customers and it also provides them a knowledge that which designs are liked by the people more and this in turn helps them to introduce certain modifications in the design and also enhance the number of productions (Lonial, 2019).

Central Distribution Center

The point that needs to be mentioned in this part is that of the effective IT back up team that Zara have and they perform a pivotal role in the overall distribution of Zara.

The IT team of Zara looks after the ways the designed apparels are dispatched from Spain and then it is well distribute to the various locations across the nation. In addition to this it is also an evident fact to state that the IT team of Zara plays an important role in making the strict control over the scheduling process.

One of the important points that need to be mentioned in this case is that the concerned IT backup team of Zara always performs all the duty by strictly adhering to the norms and the regulation.

In addition to this one of the most crucial fact of the Zara’s supply chain management is the presence of automate based production and the warehouse facility.

Other than this facts it is also quite important thing to mention in this report that the backup team utilize the work cell organization in a very efficient manner and that is one of the crucial factor in the overall supply chain management of Zara (Tuncer, 2019).

In addition to this we are also going to provide a vivid and a detailed account about the marketing strategy of Zara and the phases that it includes are as follows:

Firstly it is quite a surprising fact to state that Zara utilize only 0.3 percent of its total revenue on marketing and promotion but still a good number of end side customers are getting attracted to them and that in turn boosts the profitability of the concerned company (that is Zara in this case).

In addition to this Zara’s way of expansion involves rapid rate of expansion.That in turn boosts the profitability of the concerned company Zara (Sherringham, 2020).

Integrated Business Management Assignment 2020

Conclusion

The conclusions that it can be deduced from the study is that it provides a good and in depth account of the concept one (that is marketing strategies of Zara) and the concept two (that is the concept of supply chain of Zara).

It is also an evident fact to state in this report that up to what extent the marketing and supply chain mechanism is benefiting the sales of Zara.

In addition to this we have also discussed about the phases of the integrated business management and we have also discussed in detail about the Integration of Marketing and Responsiveness and there we have discussed about the phases such as:Quick Response to Demand, secondly we have discussed about Small Batch Productions and the last but not the least is the fact of Central Distribution Center

.It is quite effective in nature and then we are also going to explain about the ways by which the supply chain management of Zara works in an efficient and well oiled manner.

In this report we are also going to describe about the integration of the marketing and the kind of responses that are obtained from the end side customer of Zara fashion store (Banerjee, 2019).

References

Banerjee, S., Venaik, S. and Brewer, P., 2019.Analysing corporate political activity in MNC subsidiaries through the integration-responsiveness framework. International Business Review28(5), p.101498.

Chu, P., 2016. Excellence in European Apparel Supply Chains: Zara (Doctoral dissertation).

Ebele, P., Tunde, G. and Theophilus, B., THE RESPONSIVENESS OF EMPLOYMENT AND POVERTY RATE TO ECONOMIC DEVELOPMENT PROCESS IN NIGERIA.

Gamboa, A.M. and Gonçalves, H.M., 2014. Customer loyalty through social networks: Lessons from Zara on Facebook. Business Horizons57(6), pp.709-717.

Lu, C., 2014. Zara supply chain analysis-the secret behind Zara’s retail success. Trade Gecko.Accessed September15, p.2016.

Martínez, S., Errasti, A. and Rudberg, M., 2015.Adapting Zara’s ‘Pronto Moda’to a value brand retailer. Production Planning & Control26(9), pp.723-737.

Mayrhofer, U. and Roederer, C., 2016. Zara: The international success of fast-moving fashion. HAL.

Mo, Z., 2015. Internationalization process of fast fashion retailers: evidence of H&M and Zara. International Journal of Business and Management10(3), p.217.

Özlen, M.K. and Handukic, I., 2013. Fashion industry supply chain issues: Zara (Azel France). European Researcher, (4-3), pp.999-1008.

Sahi, G.K., Gupta, M.C., Cheng, T.C.E. and Lonial, S.C., 2019.Relating entrepreneurial orientation with operational responsiveness. International Journal of Operations & Production Management.

SANJAYA, A.Y. and HAVRANEK, D.G., 2014. ZARA: A WORLD FASHION RETAILER WITH NO ADVERTISING POLICY (Doctoral dissertation, UniversitasGadjahMada).

Sherringham, K. and Unhelkar, B., 2020. Adaptiveness and Responsiveness Within Knowledge Worker Services. In Crafting and Shaping Knowledge Worker Services in the Information Economy (pp. 87-135). Palgrave Macmillan, Singapore.

Tuncer, I., Gunduz, M.A. and Cura, F., Use of Artificial Intelligence in Direct Marketing Adaptation in Transnational Strategy. September 30-October 310.

Yip, A.C. and Huang, M., 2016. Strategic values of technology-driven innovation in inventory management: a case study of Zara’s RFID implementation. International Journal of Inventory Research3(4), pp.318-336.

Zhelyazkov, G., 2011. Agile Supply Chain: Zara’s case study analysis. Personal Website.

 

 

 

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