Strategy Operations Subject Assignment Sample
Activity
| Megatrend | Key issues affecting the organization (ZARA) | Impact and implication |
| Sustainability | The emerging trend of sustainability might affect the firm. The key issue associated with ZARA’s environmental policy is the lack of transparency. The firm failed to reveal the number or quantity of resources which go into their production (Lichtenthaler, 2021). This further makes it difficult or complex to determine or analyse how impactful the firm’s sustainability objectives can truly be. | This is considered to be an opportunity for Zara if adopted and followed. The main impacts this trend will make are improving the brand image through creating fashion in sustainable manner and reduce wastage. (Galińska, 2018). Also, the government entities and legal institutions may demand ZARA to adhere to the policies of transparency of its operations and activities. The consumers are also looking forwards towards the brands that offer sustainable operations and this trend will increase the customer loyalty and base. |
| Industry 4.0 | The “fast-fashion” model of ZARA enables it to deliver the latest apparel designs to mass markets at relatively low prices and with great speed. The use of Data Analytics and digital transformation managed to build an efficient and nimble supply chain which significantly cuts the production cycle. | This resulted in significantly increasing ZARA’s turnover as well as operate with leaner working capital. ZARA streamlined its supply chain, thereby, continually enhancing its capabilities of ordering small batches of any specific SKU from its distributors (Malakand Jankowski, 2018). Also, to track the success of its apparel designs and order additional inventory concerning a particular SKU as well as location size which demands it. This made ZARA “hyper-local” within its inventory planning. |
| Demographic change | The growth of population, household structures, changing age demographics, pressure for migration, and population as well as occupational diversity affect the operations of ZARA. | Such demographic changes and factors will highlight favourable impact on ZARA. It will result in increased demands for fashionable and trendy clothes as well as greater supply (Androsch and Redl, 2019). Moreover, if there is an equivalent proportion of supply and demand for ZARA, then it would imply that the firm would have to be indifferent about shrinking or growing. |
| Rise of technology | Increasing technological regulations as well as increased pace of digital transformation and innovation may affect the operations and activities of ZARA (Uther, 2017). | Implementation and integration of the latest technologies will result in leading ZARA towards cost-effectiveness and overall efficiencies, thereby, enhancing its profitability. There are several aspects that will help in responding to the recognised opportunity, such as highly qualified and trained personnel, rising consumer desire, and so on. Workforces’ resistance to change, from the other side, may impede responsiveness to the potential of digitization. It may also significantly contribute in building and sustaining strong competitive advantages in the industry. The major technologies include Artificial Intelligence, Cloud Computing, and Machine Learning. Automated order processes, as well as a logistics administration system, allow for a quick, flexible, yet cost-effective functioning. |
Activity 2b.
| Megatrend | Adoption of Digitalization |
| Recommendation | It is advised that ZARA implement digitalization as well as technological reform throughout their organisation. ZARA should integrate or pilot 3D Design and Manufacturing technology. It will enable the firm to handle the most complex tasks as well as to collaborate with its major clients (Friesendorfand Uedelhoven, 2021). The use and integration of 3D garment design and manufacturing is widely known and considered to be an alternative for reducing the environmental damage done by the fashion industry during the initial stage of product development. |
| Justification | ZARA is criticized for producing significant waste levels and its concept of circular fashion. The integration of 3D Technology for Designing and Manufacturing will largely support ZARA to eliminate huge amounts of wastes. The principal aim or objective of 3D digital clothing within the fashion industry is to eliminate unnecessary or unwanted physical sampling. It will also be a significant contributor in controlling and minimising the levels of waste generated by pattern cuttings as well as fittings of apparel. Shortening of lead times as well as production cycle are some of the major benefits offered by virtual apparel or garments (Friesendorfand Uedelhoven, 2021). Moreover, it will enable the ZARA designers to quickly visualise how apparel or garments will eventually look, thereby, eliminating the wait to see a physical sample. The fact that internet shopping is quick and preserves the sanitation of clothing purchases is a big incentive to consider this megatrend. |
| Potential implications | It will significantly contribute in consolidating the firm’s supply chain, reducing material and direct costs, and shrink lead times. It will also result in consolidating ZARA’s retail space needs, obsolescence costs, and inventory expenses. It will support ZARA to accomplish the highest levels of quality as well as precision within its apparel offerings and other products (Galińska, 2018). Therefore, it will result in cutting on energy being used for producing and shipping the garment, the quantity and number of materials to be used, chemicals and water used for preparing, dyeing, as well as treating the sample fabric. Lastly, it will significantly contribute in significantly reducing the brand’s carbon footprints by approximately 10%-30%. |
References
Friesendorf, C. and Uedelhoven, L., (2021). Business Recommendations and Future Trends. In Mobility in Germany (pp. 69-72). Springer, Cham.
Galińska, B., (2018). Logistics megatrends and their influence on supply chains. Business Logistics in Modern Management.
Lichtenthaler, U., (2021). Digitainability: the combined effects of the megatrends digitalization and sustainability. Journal of Innovation Management, 9(2), pp.64-80.
Malik, R. and Janowska, A.A., (2018). Megatrends and their use in economic analyses of contemporary challenges in the world economy. PraceNaukoweUniwersytetuEkonomicznego we Wrocławiu, (523), pp.209-220.
Uther, B., (2017). Managing megatrends. Company Director, 33(10), pp.40-43.
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