08 Activity 1 Labinghisa PDF

BM2212
Names Section Date
ACTIVITY
Zara
The big threat to physical stores in the retailing business is the online retailers taking their customers. This
includes highly diversified online retailers. For Zara, the global clothing retailer, the threat comes from a
number of online clothing retailers, such as SHEIN, a Chinese fast fashion online apparel retailer, and
Zalora, a Singaporean fashion store. Brick-and-mortar retailers like Zara are responding by offering both
online and in-store experiences.
Zara has successfully drawn its online customers into the store, with one-third of its online orders being
picked up at a Zara store. Integrating this process into store operations is a major operational challenge
that requires resource investments. Stores must determine how they get products ordered online to the
stores, where to store items ordered online, whether they will offer dedicated checkout lines to online
customers, and whether the firm will rely on personal interactions or automated systems to serve online
customers.
Zara has developed strong competencies in getting products from warehouses to the store but has
struggled to provide effective in-store service to customers. For example, a customer going to a London
Zara found that there was no signage directing him where to pick up his order. He was directed to wait in
a regular checkout line only to be told, after a long wait in line, that he had to go to an upstairs counter
to get his order. There, an attendant found his order form and retrieved his items by hand.
Zara’s solution is to leverage automation to better serve customers. In outlets with large online
businesses, Zara plans to create online kiosks where customers can enter or scan their order code from
their online order. Behind-the-scenes robots would then retrieve the order from a small warehouse built
into the store and deliver it to a drop box where the customer would pick it up.
Industry analysts note that this is a big change for a retailer since it requires the firm to reconfigure store
and storeroom space and develop clear procedures. Though challenging, Zara believes that developing a
resource set that meets the needs of both in-store and online customers best gives the firm the ability to
fend off the online retailer challenge.
Answer the following questions: (2 items x 10 points)
1. Do you think Zara’s solution to leverage automation — online kiosks and behind-the-scene
robots — is a sustainable business strategy?
Answer: Yes, Zara's plan to use automation through online kiosks and a hidden bot is a
viable business model because it offers a set of features that meet the needs of both in-
store and online shoppers. At online kiosks, customers enter or scan the purchase code
for their online order. In the background, robots collect customer orders and deliver them
to boxes where customers can pick them up.
2. If you were part of the decision-making team in Zara, which type of functional strategy would
you adopt to improve the market share position of Zara?
Answer: If I were a member of Zara's decision - making team, I would choose the operations
strategy. Zara needs an operations plan for manufacturing companies and service - oriented
businesses because they are having difficulty growing their business through interpersonal
connections or automated systems to serve clients online. To provide the best possible
customer service while allowing the company to face the challenge of competing with online
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Rubric for grading:
CRITERIA PERFORMANCE INDICATORS POINTS

Content Provided pieces of evidence, supporting details, and factual scenarios 8
Organization of ideas Expressed the points in a clear and logical arrangement of ideas in the
2
paragraph
TOTAL 10
References:
Witcher, B. (2020) Absolute Essentials of Strategic Management. New York. Taylor & Francis Group Ltd.
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BM2212

Names Section Date

CRITERIA PERFORMANCE INDICATORS POINTS

08 Activity 1 *Property of STI

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