After the class on Supply Chain Management I was very interested in further understanding Zara’s supply chain and digging deeper into why the company is so successful.

I never saw Zara (a store close to my heart) as anything “special,” but now I see what exactly makes their supply chain so unique, and in turn leads to their success- “One day it’s in and the next day it’s out”.

After researching, the main reasons for their supply chain success are:

1. Quick response to demand: Zara creates up to 1000 designs every month based on store sales and current trends.

This makes sense as they can then produce accordingly, and iterate on their prospective designs.

2. Small batch productions: Zara produces small numbers of quantities for every product, which gives them the opportunity to quickly understand what designs are successful.

In retrospect, I definitely see this now. Every time i’d go to a store three days after I saw something I wanted, it would be gone.

3. Central distribution center: All of Zara’s clothing is shipped back to spain (central location) and from there it’s distributed to different countries based on the local requirments of those countries.

This illustrates Zara’s strong IT systems that back up it’s distribution.

Source:

http://cmuscm.blogspot.ca/2012/09/fashion-forward-zaras-supply-chain.html

I found the class “People Culture and Teams” on Zappos very interesting, as I’ve alway wondered what it would be like to mix work and play.

The CEO, Hsieh, illustrates the companies values perfectly: “We decided to be about providing the best service. We said, ‘We’re a service company that just happens to sell shoes.'”

Despite the slow beginning, the company was ranked on Fortune magazine’s annual ‘Best Companies to Work For’ list.

However, it’s important to also discuss the implications of having a company like this. Because their values are about “[Creating fun and weirdness],” and “[Building a positive team and family spirit”], it is important to consider what could go wrong. Personally I feel like there is pressure for workers to act enthusiastic and happy all the time, and that is just not natural. This in turn could promote employees to be fake and diminish the goal of a fun natural environment. We must also take into account the fact that those who feel presure to be something their not all the time (act happy when they’re not), may need someone to talk to in the work place to relieve stress (perhaps a counsellor).

Sources:

http://about.zappos.com/our-unique-culture/zappos-core-values

I chose to respond to Gianluca’s blog post because often times I have been frustrated with stores’ attempts to force me to embark on a lengthy journey just to get to my desired section. However, now I realize the true strategy in this system, and agree with Gianluca in that it’s a creative and intelligent concept.

He exemplifies the idea through the company Ikea, as they force their customers to walk through a maze of their products in order to be more profitable. I now further understand the motive behind this concept; what one doesn’t see one cannot purchase. I see that the purpose is to expose as much of the company’s products to the consumers as possible, in attempt to ultimately entice them to buy something they weren’t initially planning to purchase.

I agree that there is no such thing as “a quick run to IKEA,” as it’s a large store that forces one to channel through a maze in an attempt to hunt down what one is actually looking for. However, I don’t think it’s a huge issue. Consumers know the store is giant and full of option, and therefore should only go if they’re willing to spend the time.

Here is an example of a customer asserting he has to walk through the whole Ikea to get to one place (watch from 00:55-1:00 minute)
https://www.youtube.com/watch?v=E1AOy3yb1Nc.

This directly relates back to the ‘point of difference’ idea; Starbucks basically needs to differentiate itself from other brands in order to entice consumers and have their brand stick. The company could do this through specialized add campaigns unique to their products, and advertise just why they’re different, and in turn better. The company could employ the use of effective slogans, and publicly illustrate their unique values (e.g. fair trade coffee). The company could spend money on marketing their ethical behavior in the hopes of appealing to a moral consumer base.

As if Facebook wasn’t doing enough, it has now launched a gift service that allows people to send real items (e.g. cookies, stuffed animals) to friends.  It uses the tagline “Real friends. Real gifts.” (Dembosky, september 28).

This service marks the social network’s first attempt into dealing with physical goods; up till now Facebook has restricted its activities to digital goods and gaming (e.g. music and movies).

April Dembosky (writer at The Globe and Mail) explains that Facebook can’t compete against Amazon’s shipping, she says it’s is missing the most crucial element-peoples’ physical addresses.

The system works in steps; when the user orders a gift, a Facebook message is sent to the friend asking for their physical address. This service provides a handful of products, such as cupcakes and Starbucks gift cards, and plans to expand to goods like socks, chocolates, ice cream, and even mini-dinosaurs!

This is another way for Facebook to make money, and even if the idea isn’t too innovative and new, it still prompts excitement. People may just want to try it out  because it’s “Facebook” doing something different. Many may also find it an easier alternative to Amazon,  as people are on Facebook most of the time anyway.

Sources:

http://www.theglobeandmail.com/technology/facebook-launches-gift-service-ventures-into-amazons-territory/article4573963/