At my current job, there is little emphasis by management to ensure job satisfaction. In the past few weeks, the store has merged its two teams (sales and stock) into one united unit. While the staff understands the goal is to make a more complete employee that can perform a variety of functions, the concerns that we addressed were not adequately considered and has led to a drastic drop in productivity and overall effectiveness. In addition, the store lost several good employees, and has seen a dramatic rise in call outs, as it heads into the busy holiday season. The past Saturday, the busiest day of 2012 thus far, there were three call outs and three others scheduled who quit during the week, leading the store to having less than half the employees designated for the later part of the day and closing shift.
The staff, as a whole, has become more demoralized more a variety of reasons. Some employees are specialists in sales and stock and the adjustment does not best utilize their skills. Others are overwhelmed by the new tasks, which management allocated four hours for training. They feel inadequate and unprepared for the demands of both familiarizing themselves with new tasks and adjusting to the sudden increase in store traffic and expectations. Several, including those who have left the store, have stated that they feel coerced by the presentation of the team merger and don't understand the timing.
There are several steps that the store management could have taken to alleviate the learning curve. The clearest is to move the training and merger into a slower time of year (such as September or January) so that the staff has less pressure to get things done and can feel more comfortable with the new tasks when the busy periods arrive. It could have also presented the new changes more as an opportunity to grow rather than a requirement to maintain employment. If the management desired some task flexibility for the holiday season to meet the needs of the business, it could have tried out a "provisional flex team" consisting of more veteran leaders amongst the staff who are familiar with both the sales and stock so that it is easier to tweak the program as a whole and there could be more honest and professional feedback due to the familiarity of the veterans with management.
In the end, the process of integrating the sales and stock teams has created frustration among employees and led to an increase both in turnover and absenteeism. Employees don't want to have to deal with both the new tasks after minimal training and a surge in the volume of customers in store. The store management could have done a better job implementing the merger and allow employees to perform tasks that they do best, thus highlighting their strengths, during the busiest time of year.
Tuesday, November 20, 2012
Sunday, November 18, 2012
Leadership and Adaptability
The qualities that make a great leader are various. Many powerful and capable leaders can mold and motivate an organization within a specific scope but their talents are not suitable for an array of roles or companies. For instance, a college football coach, such as Nick Saban, can excel at that level but struggle in the NFL. Saban's "Process" didn't work because he struggled to adapt to NFL and he was unable to micromanage his teams in the same way that he could at Michigan State and LSU. In soccer, a manager can move between teams in the same league and struggle if the new club and its players don't have a similar playing style and personnel. In England, Brian Clough's disastrous 44 days at Leeds United are book-ended by an English First Division triumph at less prestigious Derby County and back-to-back European Cups with Nottingham Forest. In his case, his skills were more suited toward a team with adversity rather than a more regimented club.
The more adaptable leaders have a more conceptual mindset and understand their own strengths and weaknesses. They understand what they do know, and more importantly, what they do not know. They are able to find and develop talent that acts as experts and advisers on various issues. These individuals tend to take a "bigger picture" view of problems and craft solutions that not only solve immediate issues, but also serve an organization's interests over the long term. This type of leader can compensate industry or business expertise with placing competent individuals in places of power that highlight their strengths. In addition, he or she has to understand how to motivate people and lead by example.
I find Bill Gates to be someone who embodies a hybrid of these types of leadership. His technical process and technological genius are easy to notice, but there are more subtle qualities that allow him to succeed beyond the PC. He is aware that he doesn't have the expertise or ability to solve every third world problem, but through his foundation, he provides funds and opportunities to those who can. He employs his success at Microsoft to empower others to become leaders and he develops programs that allow many to focus and develop a specialty to solve complex resource and humanity issues. He's a rare type of leader and someone to emulate for his management persona.
The adaptability of a leader truly depends on his or her skills. Each type of leader is effective as long as he or she can place people and structure around to highlight personal strengths and maximum comfort in the role.
Works Cited
O'Keefe, Brian. "Leadership lessons from Nick Saban." Fortune. Online. 7 Sept 2012. Accessed 11 Nov 2012. <http://money.cnn.com/2012/09/07/news/companies/alabama-coach-saban.fortune/index.html>.
"The inside story of Brian Clough at Leeds." The Independent. Online. 11 March 2009. Accessed 18 Nov. 2012. <http://www.independent.co.uk/sport/football/the-inside-story-of-brian-clough-at-leeds-1641947.html>.
Wessell, Maxwell. "Idolize Bill Gates, not Steve Jobs." Harvard Business Review. Online. 1 Nov 2011. Accessed 18 Nov 2012. <http://www.businessweek.com/management/idolize-bill-gates-not-steve-jobs-11012011.html>.
The more adaptable leaders have a more conceptual mindset and understand their own strengths and weaknesses. They understand what they do know, and more importantly, what they do not know. They are able to find and develop talent that acts as experts and advisers on various issues. These individuals tend to take a "bigger picture" view of problems and craft solutions that not only solve immediate issues, but also serve an organization's interests over the long term. This type of leader can compensate industry or business expertise with placing competent individuals in places of power that highlight their strengths. In addition, he or she has to understand how to motivate people and lead by example.
I find Bill Gates to be someone who embodies a hybrid of these types of leadership. His technical process and technological genius are easy to notice, but there are more subtle qualities that allow him to succeed beyond the PC. He is aware that he doesn't have the expertise or ability to solve every third world problem, but through his foundation, he provides funds and opportunities to those who can. He employs his success at Microsoft to empower others to become leaders and he develops programs that allow many to focus and develop a specialty to solve complex resource and humanity issues. He's a rare type of leader and someone to emulate for his management persona.
The adaptability of a leader truly depends on his or her skills. Each type of leader is effective as long as he or she can place people and structure around to highlight personal strengths and maximum comfort in the role.
Works Cited
O'Keefe, Brian. "Leadership lessons from Nick Saban." Fortune. Online. 7 Sept 2012. Accessed 11 Nov 2012. <http://money.cnn.com/2012/09/07/news/companies/alabama-coach-saban.fortune/index.html>.
"The inside story of Brian Clough at Leeds." The Independent. Online. 11 March 2009. Accessed 18 Nov. 2012. <http://www.independent.co.uk/sport/football/the-inside-story-of-brian-clough-at-leeds-1641947.html>.
Wessell, Maxwell. "Idolize Bill Gates, not Steve Jobs." Harvard Business Review. Online. 1 Nov 2011. Accessed 18 Nov 2012. <http://www.businessweek.com/management/idolize-bill-gates-not-steve-jobs-11012011.html>.
Sunday, November 11, 2012
HRM and Talent Acquisition
At the store where I work, there is a heavy emphasis on tourist traffic and attracting fans of NBC shows since it sells various associated products and experiences. Although the retail sector is one where there is substantial turnover, the store has a very high rate and fires employees on a consistent basis. A significant component of this is that management does not find people who contain the skill sets necessary to succeed in this position. In addition to the typical interpersonal skills necessary to assist people with a myriad of questions, it's also important to consider how potential employees perceive the products in the store and how knowledgeable they are about the shows featured in the store. If employees enjoy what the store offers, they are more likely to talk up the products and convince people to make purchases. Since the store itself is located in a highly trafficked area of Midtown, it's also important to have a general sense of where things are in the area, events in the city, and an understanding of tourists' mentally.
As part of the interview process, store management should ask potential employees about their television interests and which shows they watch frequently. Also, it needs to find employees who understand the local geography and how to address the concerns of tourists. This can be done with a survey, short dialogue, or specific questions to each applicant. If the store brings in people who like watching TV, and NBC shows specifically, they will see their job as little more than talking about one of their favorite things all day. In addition, employees who are better equipped to understand tourists' concerns in the city are more likely to provide reassuring guidance and, ultimately, higher quality guest service. In this way, both employees and store guests can enjoy the store and remain in it longer.
As part of the interview process, store management should ask potential employees about their television interests and which shows they watch frequently. Also, it needs to find employees who understand the local geography and how to address the concerns of tourists. This can be done with a survey, short dialogue, or specific questions to each applicant. If the store brings in people who like watching TV, and NBC shows specifically, they will see their job as little more than talking about one of their favorite things all day. In addition, employees who are better equipped to understand tourists' concerns in the city are more likely to provide reassuring guidance and, ultimately, higher quality guest service. In this way, both employees and store guests can enjoy the store and remain in it longer.
Sunday, October 14, 2012
Primnary Career Objectives
Since I already have a degree (BA in History, minor in Statistics) and some professional experience (three years of teaching Latin), my objectives tend to be very specific and I am learning from my shortcomings and triumphs from my pre-New York life. My primary assumption in all of these goals is that I will maintain my current GPA until I complete my BBA in May 2014.
My most immediate goal is to improve my networking skills. This will help me not only achieve the next two objectives, but it will allow me to progress in my own career and build contacts throughout the Finance and IB industry. I have a difficult time starting conversations in professional environments but I tend to do well once I get going and people seem interested when I throw out a European backpacking reference or demonstrate my knowledge of the current financial markets. To improve this stumbling block, I am enrolling in as many Career Center events as possible and attending a variety of Corporate Presentations, where I am forced to network and talk with career professionals. Further, when I attend Arsenal gatherings at a local pub, I talk to folks around me as the atmosphere is typically very friendly and there is an automatic (and, frankly, awesome) common trait. I am following up by searching on LinkedIn for people with whom I talk to and try to take the conversation further. My next step will be to conduct informational interviews as I go through the next two phases below.
My next objective is to attain a Summer Financial Analyst internship. As stated above, my greatest weakness is in networking. Further, my current retail job may be hindering the perception that I am prepared for such professional responsibility. I am working on finding a quality internship for the Spring semester to counter this. I have the GPA (3.65) and the aptitude (95th percentile on Bloomberg Assessment Test) to succeed and my course choices for next semester will demonstrate an in-depth knowledge of Finance and technical skills. I keep a list of companies to investigate on my phone and add to it as necessary. Over the next three months, I plan to apply for 25-30 summer internships at major banks, hedge funds, investment houses, and ratings agencies.
The ultimate goal is to earn a full-time analyst position at a major investment bank. Obviously, the glaring weakness is that I lack formal employment in the industry, which should clear up during my internship(s). During my internships, I will take advantage of opportunities to learn more about the institution where I intern and industry as a whole, continue to develop my networking skills in a professional environment, and further my technical and fundamental skills. I plan to apply my teaching and backpacking experiences to make myself a creative and indispensable asset to the firm and earn consideration as a future leader. I'll utilize my internship list as a starting point for a job search while continuing to attend Career Center workshops, on-campus presentations, and invitation only events at companies. While I hope to earn an offer from my internship experience, I will certainly explore any and all relevant options. It's a bit early to quantify the application goal, especially if I accept an offer from my internship, my it would likely be about double the internship application number.
My most immediate goal is to improve my networking skills. This will help me not only achieve the next two objectives, but it will allow me to progress in my own career and build contacts throughout the Finance and IB industry. I have a difficult time starting conversations in professional environments but I tend to do well once I get going and people seem interested when I throw out a European backpacking reference or demonstrate my knowledge of the current financial markets. To improve this stumbling block, I am enrolling in as many Career Center events as possible and attending a variety of Corporate Presentations, where I am forced to network and talk with career professionals. Further, when I attend Arsenal gatherings at a local pub, I talk to folks around me as the atmosphere is typically very friendly and there is an automatic (and, frankly, awesome) common trait. I am following up by searching on LinkedIn for people with whom I talk to and try to take the conversation further. My next step will be to conduct informational interviews as I go through the next two phases below.
My next objective is to attain a Summer Financial Analyst internship. As stated above, my greatest weakness is in networking. Further, my current retail job may be hindering the perception that I am prepared for such professional responsibility. I am working on finding a quality internship for the Spring semester to counter this. I have the GPA (3.65) and the aptitude (95th percentile on Bloomberg Assessment Test) to succeed and my course choices for next semester will demonstrate an in-depth knowledge of Finance and technical skills. I keep a list of companies to investigate on my phone and add to it as necessary. Over the next three months, I plan to apply for 25-30 summer internships at major banks, hedge funds, investment houses, and ratings agencies.
The ultimate goal is to earn a full-time analyst position at a major investment bank. Obviously, the glaring weakness is that I lack formal employment in the industry, which should clear up during my internship(s). During my internships, I will take advantage of opportunities to learn more about the institution where I intern and industry as a whole, continue to develop my networking skills in a professional environment, and further my technical and fundamental skills. I plan to apply my teaching and backpacking experiences to make myself a creative and indispensable asset to the firm and earn consideration as a future leader. I'll utilize my internship list as a starting point for a job search while continuing to attend Career Center workshops, on-campus presentations, and invitation only events at companies. While I hope to earn an offer from my internship experience, I will certainly explore any and all relevant options. It's a bit early to quantify the application goal, especially if I accept an offer from my internship, my it would likely be about double the internship application number.
Tuesday, October 2, 2012
Hurricane Charley (2004)
I decided to focus on a crisis that I experienced personally. In August 2004, Hurricane Charley exploded from a mild Category 2 storm into a borderline Category 4/5 storm. Originally forecast to strike the Tampa Bay area, it shifted east and instead hit southwest Florida before quickly moving through the peninsula. In my location (north Orlando), there were winds of approximately 105 mph with higher gusts as the strongest part of the eyewall passed. For brevity, I am focusing on the issue of power restoration, which for me took 4 days. More information is available on the Orlando Sentinel page dedicated to the hurricane.
This article describes the actions and anticipation before the hurricane, alongside statements from local officials, and here is a description of the power situation 72 hours after it. Before Charley's arrival, there were continued warnings that Orlando would get significant effects and residents should be ready if there is a change in the forecast. Once the late shift occurred, officials and power companies warned that there would be no emergency services during its peak and that electricity service might be unavailable for the several days despite tree cleanup and system restoration beginning as soon as it was safe to do so. Government and law enforcement officials also sent stern warnings before the storm about looting and civil disobedience. As cleanup began, there were frequent updates in the media and power crews and tree-cutters were seen throughout the region. However, frustrations began to erupt into violent (and sometimes drunken) outbursts due to long lines for food and gas as well as certain areas receiving electricity first while others did not. Law enforcement was present in many areas with electricity and helped people resolve disputes and maintain order. For instance, I was in a Taco Bell with my then-girlfriend, where we waited for 45 minutes before ordering. There was one drunk person who tried to cut the line but the manager and several others, including a sheriff's officer, removed him by force before there was a further disruption.
I would suggest that the power and government officials did a very good job preparing for various scenarios and quickly adjusted their plan as the storm shifted track. They informed the public about proper preparations and behavior, then enforced their words with actions. On the morning after the storm, I awoke to the sound of saws as tree removal began only hours after Charley passed. In this scenario, power restoration made the correct decision to focus on restoring power to hospitals, emergency services and certain business areas while residents typically waited 48-72 hours.
The lessons learned from previous storms, especially Hurricane Andrew in 1992, showed as emergency planners created contingency plans and maintained a nimble recovery force that could shift to areas quickly, assuming it was safe. Skeptics to the recovery plan suggested that election year politics (especially in a swing state) influenced the process, especially in light of Hurricane Katrina the next summer. However, I don't see any significant evidence to suggest that. The warnings about behavior issued before Charley's arrival were mostly heeded, and law enforcement officials quickly responded to issues and positioned themselves in areas to keep order.
Overall, the response to electrical needs from Hurricane Charley's was impressive despite the fact that it took several days to restore power in many areas. The crisis led to an opportunity to invest in upgraded power infrastructure and the other lessons were more immediately reinforced as two more hurricanes affected the area within 4 weeks and the six storms struck Florida during the 2005 season.
Sources Used:
This article describes the actions and anticipation before the hurricane, alongside statements from local officials, and here is a description of the power situation 72 hours after it. Before Charley's arrival, there were continued warnings that Orlando would get significant effects and residents should be ready if there is a change in the forecast. Once the late shift occurred, officials and power companies warned that there would be no emergency services during its peak and that electricity service might be unavailable for the several days despite tree cleanup and system restoration beginning as soon as it was safe to do so. Government and law enforcement officials also sent stern warnings before the storm about looting and civil disobedience. As cleanup began, there were frequent updates in the media and power crews and tree-cutters were seen throughout the region. However, frustrations began to erupt into violent (and sometimes drunken) outbursts due to long lines for food and gas as well as certain areas receiving electricity first while others did not. Law enforcement was present in many areas with electricity and helped people resolve disputes and maintain order. For instance, I was in a Taco Bell with my then-girlfriend, where we waited for 45 minutes before ordering. There was one drunk person who tried to cut the line but the manager and several others, including a sheriff's officer, removed him by force before there was a further disruption.
I would suggest that the power and government officials did a very good job preparing for various scenarios and quickly adjusted their plan as the storm shifted track. They informed the public about proper preparations and behavior, then enforced their words with actions. On the morning after the storm, I awoke to the sound of saws as tree removal began only hours after Charley passed. In this scenario, power restoration made the correct decision to focus on restoring power to hospitals, emergency services and certain business areas while residents typically waited 48-72 hours.
The lessons learned from previous storms, especially Hurricane Andrew in 1992, showed as emergency planners created contingency plans and maintained a nimble recovery force that could shift to areas quickly, assuming it was safe. Skeptics to the recovery plan suggested that election year politics (especially in a swing state) influenced the process, especially in light of Hurricane Katrina the next summer. However, I don't see any significant evidence to suggest that. The warnings about behavior issued before Charley's arrival were mostly heeded, and law enforcement officials quickly responded to issues and positioned themselves in areas to keep order.
Overall, the response to electrical needs from Hurricane Charley's was impressive despite the fact that it took several days to restore power in many areas. The crisis led to an opportunity to invest in upgraded power infrastructure and the other lessons were more immediately reinforced as two more hurricanes affected the area within 4 weeks and the six storms struck Florida during the 2005 season.
Sources Used:
Sunday, September 30, 2012
In this article about corruption in Indian coal mine bidding, there are serious ethical dilemmas. For Mr. Jayaswal, he had the opportunity to obtain significant allocations of land to develop coal plants that would provide electricity for many Indians. However, the article suggests that he received the land through a lawmaker, Mr. Darda. For the politician, his dilemma is to determine whether he should, alongside his partner, should profit by flipping these lands without significant investment for the Indian people. For both, they can justify that they were merely playing by the rules and laws and technically have done no wrong.
The dilemma consists of several factors. From a capitalist standpoint, this is a very easy and lucrative business opportunity and he has a chance to bring in millions of dollars for himself and other projects he might want to pursue for the future. He also has the chance to work with Indian politicians and further his influence on other issues he might find important. However, he must also deal with the perception of working within a system ripe with corruption, especially as there remains strict regulations on mining permits and the idea that preferred bidders are given favored status. He also has to consider how he now, according to the article, flaunts his wealth and seems to display little plight or sympathy for the average Indian.
Mr. Jeyaswal would say that his moral reasoning is a combination of an individualist and utilitarian view. While there is clear self-interests at play, he will argue that he, and his company, are helping to develop the allocated areas and thus helping all Indians gain access to electricity. He'll justify that his actions helped to further improve life for all Indians.
The title of the article immediately suggests that corruption is present throughout Indian politics despite that the article only focuses on one specific incident. On a larger scale, the continuous revelation of new corruption scandals makes it seem like the pattern won't end. The problem has become ingrained as part of Indian life and those who want to do business in the country will be judged by whom they know rather than the merits of a proposal. However, a new electronic payment program, modeled on successful programs in Brazil and Mexico, shows promise to minimize opportunities for corruption while handing out benefits to people such as students and government employees. If successful, hopefully it leads to tighter restraints on politicians' abilities to benefit from public service while in office and open up more industries to fair competition to improve the lives of everyday Indians.
Sources Used:
Bajaj, Vikas and Jim Yardley. "Scandal Poses a Riddle: Will India Ever Be Able to Tackle Corruption?" New York Times. September 15, 2012. http://www.nytimes.com/2012/09/16/world/asia/scandal-bares-corruption-hampering-indias-growth.html?_r=2&ref=business&.
"Govt for corruption killer e-cash scheme." Indian Express. September 28, 2012. http://www.indianexpress.com/news/govt-for-corruption-killer-ecash-scheme/1009360/0.
Ramachandaran, Shastri. "Indian corruption fight loses momentum." Global Times. September 27, 2012. http://www.globaltimes.cn/content/735803.shtml.
The dilemma consists of several factors. From a capitalist standpoint, this is a very easy and lucrative business opportunity and he has a chance to bring in millions of dollars for himself and other projects he might want to pursue for the future. He also has the chance to work with Indian politicians and further his influence on other issues he might find important. However, he must also deal with the perception of working within a system ripe with corruption, especially as there remains strict regulations on mining permits and the idea that preferred bidders are given favored status. He also has to consider how he now, according to the article, flaunts his wealth and seems to display little plight or sympathy for the average Indian.
Mr. Jeyaswal would say that his moral reasoning is a combination of an individualist and utilitarian view. While there is clear self-interests at play, he will argue that he, and his company, are helping to develop the allocated areas and thus helping all Indians gain access to electricity. He'll justify that his actions helped to further improve life for all Indians.
The title of the article immediately suggests that corruption is present throughout Indian politics despite that the article only focuses on one specific incident. On a larger scale, the continuous revelation of new corruption scandals makes it seem like the pattern won't end. The problem has become ingrained as part of Indian life and those who want to do business in the country will be judged by whom they know rather than the merits of a proposal. However, a new electronic payment program, modeled on successful programs in Brazil and Mexico, shows promise to minimize opportunities for corruption while handing out benefits to people such as students and government employees. If successful, hopefully it leads to tighter restraints on politicians' abilities to benefit from public service while in office and open up more industries to fair competition to improve the lives of everyday Indians.
Sources Used:
Bajaj, Vikas and Jim Yardley. "Scandal Poses a Riddle: Will India Ever Be Able to Tackle Corruption?" New York Times. September 15, 2012. http://www.nytimes.com/2012/09/16/world/asia/scandal-bares-corruption-hampering-indias-growth.html?_r=2&ref=business&.
"Govt for corruption killer e-cash scheme." Indian Express. September 28, 2012. http://www.indianexpress.com/news/govt-for-corruption-killer-ecash-scheme/1009360/0.
Ramachandaran, Shastri. "Indian corruption fight loses momentum." Global Times. September 27, 2012. http://www.globaltimes.cn/content/735803.shtml.
Saturday, September 22, 2012
Case Study 1: Zara
Zara's strategy to turnover a large quantity of styles highlights how classical management approaches can blend with new technology for profitable results. By streamlining the design and production process and assigning each segment of the supply chain a particular task, the store is able to cycle through styles rapidly and continuously offer new products. It utilizes technology to assess inventory, detail store plans to managers, and get products to most locations within three days. The company successfully utilizes its vertically integrated companies to create and transport its products worldwide in only a few days.
Its strategy would falter quickly without the ability to adapt operations swiftly. The company is an expert in inventory levels, a key component of fast fashion. Its recent financial results indicate that the company is effective both in workflow designs and product management. This extends into the store design, which encourages shoppers not to wait on making a purchase as employees place new items on the sales floor very quickly after receiving them in original shipping hangars. The entire process emphasizes speed and style.
Without highly developed systems and ongoing contingency thinking, Zara would be unable to develop such a high quality product cycle process. It needs to have a highly sophisticated technical and aesthetic systems process to prepare and develop new products quickly. As this Forbes article points out, the company's ability to streamline manufacturing with design allows it to attract and keep customers who return to the store frequently for unique items. It also carefully monitors product sales to determine which items shoppers are choosing in each location and either refill popular items or replenish the store with fresh products. The company can easily maintain proper inventory levels without resorting to sales and clearance specials. It also minimizes advertising expenses as customers will return frequently to view new products.
The company still performs quite well but there remain substantial risks. While centralizing operations can save significant money, it is also prone to a single event, such as a fire or political unrest in Spain, that can wipe out a major portion of its production line. There are also risks in expanding so quickly, as certain markets may not be adequately prepared for fast fashion and over-saturation can remove the novelty of the store, especially in foreign markets. In addition, new competition and local economic struggles can reduce overall sales and force the company to slash prices in places where redistribution is difficult. With further development and contingency planning, there is no reason to think that Zara's growth cannot continue.
Articles Cited:
Denning, Steve. "When Will US Firms Become Agile? Part 2: Internal Agility at Zara." Forbes. September 20, 2012. http://www.forbes.com/sites/stevedenning/2012/09/20/when-will-us-firms-become-agile-part-2-internal-agility-at-zara/.
Xiaoxiao, Kang. "Zara reduces price for the first time in China: 34% down in Beijing." Morningwhistle.com. September 21, 2012. http://www.morningwhistle.com/html/2012/Company_Industry_0921/214186.html.
Its strategy would falter quickly without the ability to adapt operations swiftly. The company is an expert in inventory levels, a key component of fast fashion. Its recent financial results indicate that the company is effective both in workflow designs and product management. This extends into the store design, which encourages shoppers not to wait on making a purchase as employees place new items on the sales floor very quickly after receiving them in original shipping hangars. The entire process emphasizes speed and style.
Without highly developed systems and ongoing contingency thinking, Zara would be unable to develop such a high quality product cycle process. It needs to have a highly sophisticated technical and aesthetic systems process to prepare and develop new products quickly. As this Forbes article points out, the company's ability to streamline manufacturing with design allows it to attract and keep customers who return to the store frequently for unique items. It also carefully monitors product sales to determine which items shoppers are choosing in each location and either refill popular items or replenish the store with fresh products. The company can easily maintain proper inventory levels without resorting to sales and clearance specials. It also minimizes advertising expenses as customers will return frequently to view new products.
The company still performs quite well but there remain substantial risks. While centralizing operations can save significant money, it is also prone to a single event, such as a fire or political unrest in Spain, that can wipe out a major portion of its production line. There are also risks in expanding so quickly, as certain markets may not be adequately prepared for fast fashion and over-saturation can remove the novelty of the store, especially in foreign markets. In addition, new competition and local economic struggles can reduce overall sales and force the company to slash prices in places where redistribution is difficult. With further development and contingency planning, there is no reason to think that Zara's growth cannot continue.
Articles Cited:
Denning, Steve. "When Will US Firms Become Agile? Part 2: Internal Agility at Zara." Forbes. September 20, 2012. http://www.forbes.com/sites/stevedenning/2012/09/20/when-will-us-firms-become-agile-part-2-internal-agility-at-zara/.
Xiaoxiao, Kang. "Zara reduces price for the first time in China: 34% down in Beijing." Morningwhistle.com. September 21, 2012. http://www.morningwhistle.com/html/2012/Company_Industry_0921/214186.html.
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