Question 1

Zara's use of technology across the value chain allows the firm to manufacture more unique items than rivals H&M and Gap.

Accepted Answer

A) True 
 B)False  True

Question 2

In an industry where nearly every major player outsources manufacturing to low-cost countries, Zara is highly _____, keeping huge swaths of its production process in-house.

Accepted Answer

A)  privatized 
B)  vertically integrated 
C)  publicly traded 
D)  subsidized 
E)  autonomous 
A)  privatized 
B)  vertically integrated 
C)  publicly traded 
D)  subsidized 
E)  autonomous B

Question 3

Briefly explain the intelligence-gathering exercises carried out by Zara in its stores and the role of technology in such efforts.

Accepted Answer

Zara's designs are based on the evidence of customer demand. Zara's store managers lead the intelligence-gathering effort that ultimately determines what ends up on each store's racks. Armed with personal digital assistants (PDAs) to gather customer input, staff members regularly chat up customers to gain feedback on what they'd like to see more of.
Once stores are closed, the staff looks for trends in the piles of unsold items that customers tried on but didn't buy to spot any preferences in cloth, color, or styles offered among the products in stock.
PDAs are also linked to the store's point-of-sale (POS) system showing how garments rank by sales. Managers send updates that combine the

Question 4

The U.S. Justice Department initially reviewed the Fair Factories Clearinghouse but eventually approved the effort as described in readings and class. What was the government initially concerned about?

Accepted Answer

Price-fixi

Question 5

Most fashion retailers place orders for a seasonal collection a few days before these lines make an appearance in stores.

Accepted Answer

A) True 
 B)False

Question 6

Zara also saves money by simplifying pricing. An item sold in Bangkok is likely to cost the same as a similar item sold in Barcelona.

Accepted Answer

A) True 
 B)False

Question 7

Zara is susceptible to any disruption in northern Spain because:

Accepted Answer

A)  it moves all of its deliveries through just two locations, both in Spain. 
B)  it conducts its trade operations based on the American dollar rather than the stronger euro. 
C)  most of Zara's products are sold in markets outside Spain and Europe. 
D)  Zara's products are sold at much lower costs around the world than in Spain, and this harms profitability. 
E)  Zara's production facilities in Asia and Central America are threatening employment in Spain. 
A)  it moves all of its deliveries through just two locations, both in Spain. 
B)  it conducts its trade operations based on the American dollar rather than the stronger euro. 
C)  most of Zara's products are sold in markets outside Spain and Europe. 
D)  Zara's products are sold at much lower costs around the world than in Spain, and this harms profitability. 
E)  Zara's production facilities in Asia and Central America are threatening employment in Spain.

Question 8

Factors such as weather, natural disaster, terrorism, labor strife, or political unrest can shut down a firm's operations. Which of the following is one of the measures taken by firms to hedge such risks?

Accepted Answer

A)  Driving up profitability by increasing prices of market goods 
B)  Spreading productions facilities across the globe 
C)  Requesting government intervention in the form of subsidies or nationalization 
D)  Sourcing raw materials from countries with low labor costs 
E)  Diverting marketing and advertising budgets to accommodate greater production 
A)  Driving up profitability by increasing prices of market goods 
B)  Spreading productions facilities across the globe 
C)  Requesting government intervention in the form of subsidies or nationalization 
D)  Sourcing raw materials from countries with low labor costs 
E)  Diverting marketing and advertising budgets to accommodate greater production

Question 9

Elaborate customer surveys help Zara designers predict fashion trends months into the future and design products accordingly.

Accepted Answer

A) True 
 B)False

Question 10

A value chain is a set of:

Accepted Answer

A)  similarly profitable firms competing against each other in any given industry. 
B)  large firms that are vertically integrated. 
C)  activities through which a product or service is created and delivered to customers. 
D)  a large number of small firms that dominate a given market. 
E)  robotically controlled conveyor belts that deliver product quickly from manufacturing stations to shipping containers. 
A)  similarly profitable firms competing against each other in any given industry. 
B)  large firms that are vertically integrated. 
C)  activities through which a product or service is created and delivered to customers. 
D)  a large number of small firms that dominate a given market. 
E)  robotically controlled conveyor belts that deliver product quickly from manufacturing stations to shipping containers.

Question 11

_____ is a non-profit organization that shares audit information on contract manufacturers among members of the apparel industry and other industries.

Accepted Answer

A)  Fair Factories Clearinghouse 
B)  Pricewaterhouse Coopers 
C)  Amnesty International 
D)  Klynveld Main Goerdeler 
E)  Transparency International 
A)  Fair Factories Clearinghouse 
B)  Pricewaterhouse Coopers 
C)  Amnesty International 
D)  Klynveld Main Goerdeler 
E)  Transparency International

Question 12

Due to limited production runs, Zara's customers:

Accepted Answer

A)  tend to delay their shopping until the products go on sale. 
B)  visit the stores more often. 
C)  buy products at discounted rates after a few weeks. 
D)  visit stores less often. 
E)  create a greater opportunity for increased markdowns and writeoffs. 
A)  tend to delay their shopping until the products go on sale. 
B)  visit the stores more often. 
C)  buy products at discounted rates after a few weeks. 
D)  visit stores less often. 
E)  create a greater opportunity for increased markdowns and writeoffs.

Question 13

Outsourcing production to third-party firms is called _____.

Accepted Answer

contract m

Question 14

Many firms have developed and deployed innovative information systems, only to see these systems go unused by key staff members. How has Zara helped ensure its systems will be used by staff?

Accepted Answer

A)  employees are monitored by in-store cameras 
B)  employee time on information systems is recorded each time the system is engaged 
C)  system use drives store success and as much as 70 percent of salaries are tied to sales performance 
D)  all employees must have a Fair Factories Clearinghouse account, which is used to log and report employee activity 
E)  systems were designed by employees, who feel a sense of ownership in the technology deployed 
A)  employees are monitored by in-store cameras 
B)  employee time on information systems is recorded each time the system is engaged 
C)  system use drives store success and as much as 70 percent of salaries are tied to sales performance 
D)  all employees must have a Fair Factories Clearinghouse account, which is used to log and report employee activity 
E)  systems were designed by employees, who feel a sense of ownership in the technology deployed

Question 15

The Zara experience involves a regular supply of new stock on the shelves, because of which customers tend to visit Zara's stores more often than they visit other retailers' stores. However, such a policy will become more expensive to maintain if:

Accepted Answer

A)  star designers demand a higher fee for its designs. 
B)  PDAs are not used. 
C)  fuel costs rise. 
D)  Zara's horizontal integration fails. 
E)  Zara outsources its production process. 
A)  star designers demand a higher fee for its designs. 
B)  PDAs are not used. 
C)  fuel costs rise. 
D)  Zara's horizontal integration fails. 
E)  Zara outsources its production process.

Question 16

Zara's clothing look like high fashion, but are comparatively inexpensive.

Accepted Answer

A) True 
 B)False

Question 17

The strengthening of the euro relative to the dollar has insulated Zara against financial vulnerabilities.

Accepted Answer

A) True 
 B)False

Question 18

The U.S. Department of Justice needed to provide a special exemption to the Fair Factories Clearinghouse, and before doing so, had to be convinced that the effort wouldn't be used by buyers to collude and further squeeze prices from competitors.

Accepted Answer

A) True 
 B)False

Question 19

Limited production runs ensure customers do not have to visit Zara's stores as often as they visit other stores, allowing the firm to save money through staff reductions when compared to peers.

Accepted Answer

A) True 
 B)False

Question 20

What is contract manufacturing? What advantages can a firm expect to gain from contract manufacturing? What are the downsides associated with this practice?

Accepted Answer

Contract manufacturing refers to outsour

Zara's use of technology across the value chain allows the firm to manufacture more unique items than rivals H&M and Gap.

In an industry where nearly every major player outsources manufacturing to low-cost countries, Zara is highly _____, keeping huge swaths of its production process in-house.

Briefly explain the intelligence-gathering exercises carried out by Zara in its stores and the role of technology in such efforts.

The U.S. Justice Department initially reviewed the Fair Factories Clearinghouse but eventually approved the effort as described in readings and class. What was the government initially concerned about?

Most fashion retailers place orders for a seasonal collection a few days before these lines make an appearance in stores.

Zara also saves money by simplifying pricing. An item sold in Bangkok is likely to cost the same as a similar item sold in Barcelona.

Zara is susceptible to any disruption in northern Spain because:

Factors such as weather, natural disaster, terrorism, labor strife, or political unrest can shut down a firm's operations. Which of the following is one of the measures taken by firms to hedge such risks?

Elaborate customer surveys help Zara designers predict fashion trends months into the future and design products accordingly.

A value chain is a set of:

_____ is a non-profit organization that shares audit information on contract manufacturers among members of the apparel industry and other industries.

Due to limited production runs, Zara's customers:

Outsourcing production to third-party firms is called _____.

Many firms have developed and deployed innovative information systems, only to see these systems go unused by key staff members. How has Zara helped ensure its systems will be used by staff?

The Zara experience involves a regular supply of new stock on the shelves, because of which customers tend to visit Zara's stores more often than they visit other retailers' stores. However, such a policy will become more expensive to maintain if:

Zara's clothing look like high fashion, but are comparatively inexpensive.

The strengthening of the euro relative to the dollar has insulated Zara against financial vulnerabilities.

The U.S. Department of Justice needed to provide a special exemption to the Fair Factories Clearinghouse, and before doing so, had to be convinced that the effort wouldn't be used by buyers to collude and further squeeze prices from competitors.

Limited production runs ensure customers do not have to visit Zara's stores as often as they visit other stores, allowing the firm to save money through staff reductions when compared to peers.

What is contract manufacturing? What advantages can a firm expect to gain from contract manufacturing? What are the downsides associated with this practice?

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Exam 3: Zara: Fast Fashion From Savvy Systems

Zara's use of technology across the value chain allows the firm to manufacture more unique items than rivals H&M and Gap.

In an industry where nearly every major player outsources manufacturing to low-cost countries, Zara is highly _____, keeping huge swaths of its production process in-house.

Briefly explain the intelligence-gathering exercises carried out by Zara in its stores and the role of technology in such efforts.

The U.S. Justice Department initially reviewed the Fair Factories Clearinghouse but eventually approved the effort as described in readings and class. What was the government initially concerned about?

Most fashion retailers place orders for a seasonal collection a few days before these lines make an appearance in stores.

Zara also saves money by simplifying pricing. An item sold in Bangkok is likely to cost the same as a similar item sold in Barcelona.

Zara is susceptible to any disruption in northern Spain because:

Factors such as weather, natural disaster, terrorism, labor strife, or political unrest can shut down a firm's operations. Which of the following is one of the measures taken by firms to hedge such risks?

Elaborate customer surveys help Zara designers predict fashion trends months into the future and design products accordingly.

A value chain is a set of:

_____ is a non-profit organization that shares audit information on contract manufacturers among members of the apparel industry and other industries.

Due to limited production runs, Zara's customers:

Outsourcing production to third-party firms is called _____.

Many firms have developed and deployed innovative information systems, only to see these systems go unused by key staff members. How has Zara helped ensure its systems will be used by staff?

The Zara experience involves a regular supply of new stock on the shelves, because of which customers tend to visit Zara's stores more often than they visit other retailers' stores. However, such a policy will become more expensive to maintain if:

Zara's clothing look like high fashion, but are comparatively inexpensive.

The strengthening of the euro relative to the dollar has insulated Zara against financial vulnerabilities.

The U.S. Department of Justice needed to provide a special exemption to the Fair Factories Clearinghouse, and before doing so, had to be convinced that the effort wouldn't be used by buyers to collude and further squeeze prices from competitors.

Limited production runs ensure customers do not have to visit Zara's stores as often as they visit other stores, allowing the firm to save money through staff reductions when compared to peers.

What is contract manufacturing? What advantages can a firm expect to gain from contract manufacturing? What are the downsides associated with this practice?

Setting the Stage: Technology and the Modern Enterprise

Strategy and Technology: Concepts and Frameworks for Understanding What Separates Winners From Losers

Netflix in Two Acts: the Making of an E-Commerce Giant and the Uncertain Future of Atoms to Bits

Moores Law and More: Fast, Cheap Computing and What This Means for the Manager

Disruptive Technologies: Understanding the Giant Killers and Considerations for Avoiding Extinction

Amazoncom: an Empire Stretching From Cardboard Box to Kindle to Cloud

Understanding Network Effects: Strategies for Competing in a Platform-Centric, Winner-Take-All World

Social Media, Peer Production, and Web 2.0

The Sharing Economy, Collaborative Consumption, and Creating More Efficient Markets Through Technology

Facebook: Building a Business From the Social Graph

Rent the Runway: Entrepreneurs Expanding an Industry by Blending Tech With Fashion, John Gallaugher - Information Systems: a Managers Guide to Harnessing Technology, Version 40

Understanding Software: a Primer for Managers

Software in Flux: Partly Cloudy and Sometimes Free

The Data Asset: Databases, Business Intelligence, Analytics, Big Data, and Competitive Advantage

A Managers Guide to the Internet and Telecommunications

Information Security: Barbarians at the Gateway and Just About Everywhere Else

Google in Three Parts: Search, Online Advertising, and Beyond

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