STUDENT SELF APPRIASAL OF LEARNINGBachelor of Arts in Psycho.docx

STUDENT SELF APPRIASAL OF LEARNING
Bachelor of Arts in Psychology
College of Undergraduate Studies
Program Outcome One
CRITICAL THINKING
Unsatisfactory
1
Emerging
2
Proficient
3
Exemplary
4
Competency 1.1
Apply critical and creative thinking, skeptical inquiry and the
scientific approach to solve problems related to behavior and
mental processes.
Demonstrates limited ability to identify the essential elements
of a problem, issue, or argument (e.g. ignores or misses
important aspects of hypotheses or conclusions, own
assumptions or agenda is forced; unable to take into account
more than one perspective such as neuropsychological, social,
cognitive, etc.).
Recognizes the essential elements of a problem, issue, or
argument; however, some aspects of hypotheses or conclusions
are confused or incorrect, details or nuances are missing or
glossed over, multiple points of view are taken into account but

contradictions are not resolved.
Analyzesthe essential elements of a problem, issue, or argument
and explains the logic of hypotheses or conclusions; details and
nuances are incorporated and multiple points of view are
considered with contradictions resolved.
Limited support from research and analytic deduction is
provided.
Evaluates the essential elements of a problem, issue, or
argument with hypotheses, analysis and conclusions that support
their own position on the problem through objective research.
COMMENTS:
Program Outcome One
CRITICAL THINKING
Unsatisfactory
1
Emerging
2
Proficient
3
Exemplary
4
Competency 1.2
Seek and evaluate scientific evidence for psychological claims.
Does not seek information from multiple sources and is
inconsistent in describing information on the basis of
consistency, relevance, and accuracy (e.g. fails to distinguish
between fact, opinion, and value judgment; does not include
connections to other contexts; does not question “norms” or

expert evidences).
Seeks information from multiple sources, and describesit on the
basis of its consistency, relevance, and accuracy, making some
attempt to avoid bias in materials used but struggles with being
able to allocate information to the problem, issue, or argument
at hand.
Seeks information from multiple sources and describesit on the
basis of its consistency, relevance, and accuracy and
allocatessuch information to the problem, issue, or argument at
hand.
Seeks information from multiple sources and evaluatesit on the
basis of its consistency, relevance, and accuracy, and producesa
logical progression of ideas that are relevant and coherent.
COMMENTS:
Program Outcome Two
RESEARCH
Unsatisfactory
1
Emerging
2
Proficient
3
Exemplary
4
Competency 2.1
Apply basic research method, including research design, data
analysis, and interpretation to become informed consumers of
research.
Identifies the majority of an empirical article’s components but

is only able to explain a few of such components (e.g.: the
abstract, hypothesis, methodology, statistical and other
evaluative tools, or results of the study). Critical analysis of
research is limited or missing.
Explains the majority of an empirical article’s components,
including, the abstract, hypothesis, methodology, statistical and
other evaluative tools, and results of the study, but is unable to
draw connections across the various elements. Identifies when
to conduct a critical analysis of research, but analysis is flawed.
Applies sound reasoning as a basis for critical analysis of all of
the components of an empirical article. Applies the results of a
research study to alternative problems/situations.
Applies skeptical inquiry and sound reasoning as a basis for
critically analyzing all of the components of an empirical
article. Extends the results of a research study and applies them
to alternative problems/situations.
COMMENTS:
Program Outcome Two
RESEARCH
Unsatisfactory
1
Emerging
2
Proficient
3
Exemplary
4
Competency 2.2

Access and select appropriate information from a variety of
print and electronic sources and apply them responsibly to
written and oral presentations.
Relies primarily on subjective or personal experience, popular
press reports of psychology, and/or anecdotal evidence when
completing a project on a topic in psychology
Collects pools of resources that are not sufficient or diversified,
nor organized per the requirements of the project at hand.
Obtains, arranges, classifies, and/or describes information from
a variety of sufficient, diversified, and appropriate sources
pertinent to the chosen topic when completing a project in
psychology.
Examines sources from a variety of sources pertinent to the
chosen topic when completing a project in psychology.
Works to integrate sufficiently diversified information retrieved
via their sources; such work is evidence based, focused and to-
the-point.
Identifies and evaluates a variety of appropriate professional
sources pertinent to the chosen topic, integrating reasoned
appraisals (limitations, strengths, comparisons) of such
information into the work of a project in psychology.
COMMENTS:
Program Outcome Three
COMMUNICATION
Unsatisfactory
1
Emerging

2
Proficient
3
Exemplary
4
Competency 3.1
Present psychological concepts orally for various purposes
using technology when appropriate.
Introduction is limited or missing entirely. Transitions between
slides are infrequent, illogical, or missing entirely. Conclusion
is limited or missing entirely.
Visual design of presentation (i.e. background, pictures, etc.) is
lacking or completely overpowers the presentation to the point
of interfering with comprehensibility or design is inappropriate
for the assignment
Any written portion (including writing on the slides and in
notes) contains numerous errors in spelling, grammar, and/or
sentence structure that severely interferes with readability and
comprehension.
No attempt at APA format in presentation.
Introduction is present but incomplete or underdeveloped.
Transitions between slides are sporadic. Conclusion is
recognizable, but incomplete or underdeveloped.
Design of presentation (i.e. background, pictures, text, etc.)
upstages the writing or speaking at inappropriate times, or
visual design is too understated at points, or design is
inconsistent.

In any written portion (including writing on the slides and in
notes), errors in spelling and grammar exist that somewhat
interfere with comprehension.
APA format is attempted to paraphrase, quote, and cite, but
errors are significant.
Introduction has an opening, provides come background
information, and states the topic. Transitions between slides are
present. Conclusion summarizes main argument and has a clear
ending.
Design of presentation (i.e. background, pictures, text etc.) is
clear, appropriate for the assignment, balanced and compliments
both the writing and speaking throughout the presentation.
Any written portion (including writing on the slides and in
notes) follows conventions of spelling and grammar throughout.
Errors are infrequent and do not interfere with comprehension.
Using APA format, accurately paraphrased, quoted, and cited in
many spots throughout when appropriate or called for. Errors
present are somewhat minor.
Introduction catches the audience’s attention, provides
compelling and appropriate background info, and clearly states
the topic. Thoughtful transitions between slides are appropriate
and help the flow of ideas. Conclusion leaves the listener with a
sense of closure and provides concluding insights.
Visual design of presentation (i.e. background, pictures, etc.) is
clear, appropriate for the assignment balanced and compliments
both the writing and speaking throughout the presentation.
Visual design engages audience, does not distract from
information.

The presentation is basically error free in terms of mechanics.
In any written portion (including writing on the slides and in
notes), grammar and mechanics help establish a clear idea and
aid the reader in following the writer’s logic.
Using APA format, accurately paraphrased, quoted, and cited
throughout the presentation when appropriate or called for.
Only a few minor errors present.
COMMENTS:
Program Outcome Three
COMMUNICATION
Unsatisfactory
1
Emerging
2
Proficient
3
Exemplary
4
Competency 3.2
Presents psychological information in writing, using
technology, style, and professional conventions as appropriate
to the audience.
Introduction and conclusion are limited or missing entirely.
The paper lacks a thesis statement or argument focus.
Transitions are infrequent, illogically, or missing entirely.

Writing contains numerous errors in spelling, grammar, and/or
sentence structure that severely interferes with readability and
comprehension.
No attempt at APA format.
Writing often slips into first and/or second person. Word choice
is consistently inaccurate, unclear, or inappropriate for the
audience.
Introduction and conclusion are present but incomplete or
underdeveloped.
The paper is loosely organized around a thesis or argument that
may have to be inferred. Transitions are sporadic.
Errors in spelling and grammar exist that somewhat interfere
with readability and/or comprehension.
APA format is attempted to paraphrase, quote, and cite, but
errors are significant.
Writing sometimes slips into first and/or second person. Word
choice is sometimes inaccurate, unclear, or inappropriate for the
audience.
Introduction has a clear opening, provides background
information, and states the topic. Conclusion recapitulates main
argument and has a clear ending.
The paper is organized around an arguable, clearly stated thesis
statement or argument. Transitions are appropriate and help the
flow of ideas.
Writing follows conventions of spelling and grammar
throughout. Errors are infrequent and do not interfere with
readability or comprehension.
Using APA format, accurately paraphrased, quoted, and cited in
many spots throughout when appropriate or called for. Errors
present are somewhat minor.

Writing remains in third person throughout writing.
Word choice is accurate, clear and appropriate for the audience.
Introduction catches the reader’s attention, provides compelling
and appropriate background info, and clearly states the topic.
Conclusion leaves the reader with a sense of closure and
provides concluding insights.
The paper is well organized around an arguable, focused thesis
or argument. Thoughtful transitions clearly show how ideas
relate.
The paper is basically error free in terms of mechanics.
Grammar and mechanics help establish a clear idea and aid the
reader in following the writer’s logic.
Using APA format, accurately paraphrased, quoted, and cited
throughout the presentation when appropriate or called for.
Only a few minor errors present.
Writing remains professional in third person throughout writing.
Word choice is precise, appropriate for the audience, and
memorable.
COMMENTS:
Program Outcome Four
VALUES
Unsatisfactory
1
Emerging
2
Proficient
3
Exemplary

4
Competency 4.1
Justify the necessity of ethical behavior in the science and
practice of psychology.
Examines ethical behavior from a single perspective and
frequently makes judgments without grounding them on sound
evidence. Does not address own personal biases.
Examines ethical behavior from different perspectives, but
shows limited ability to apply those multiple perspectives into
making informed decisions. Identifies own personal biases, but
does not analyze them.
Examines ethical behavior from different perspectives, but is
not able to differentiate between objective evidence and
subjective experience when attempting to make informed
decisions. Identifies and analyzes own personal biases.
Examines ethical behavior from a variety of perspectives and
clearly differentiates between objective evidence and subjective
experience addressing how personal biases can affect ethical
decision-making.
COMMENTS:
Program Outcome Four
VALUES
Unsatisfactory
1
Emerging
2
Proficient

3
Exemplary
4
Competency 4.2
Analyze the complex variations in populations and contexts as
related to psychological explanations, and evaluate the
importance of diversity in the practice of psychology.
Exhibits inability to understand variations in populations and/or
socio-cultural contexts as related to psychological explanations
such as the importance of diversity in the practice of
psychology. Identifies forms of discrimination and prejudice but
cannot recognize personal biases in.
Identifies and comprehends obvious variations in populations
and socio-cultural contexts as related to psychological
explanations, such as discrimination, prejudice, and the
Applies and analyzes major variations in populations and/or
socio-cultural contexts, as related to psychological
explanations, such as discrimination, prejudice and the
Analyzes major and subtle variations between populations and
their socio-cultural contexts as it relates to psychological
explanations, such as discrimination, prejudice and the
COMMENTS:
Program Outcome Five
KNOWLEDGE BASE OF PSYCHOLOGY
Unsatisfactory
1
Emerging

2
Proficient
3
Exemplary
4
Competency 5.1
Explain and analyze major concepts, theoretical perspectives,
empirical findings, and historical trends in psychology.
Recognizes some major concepts, theoretical perspectives,
empirical findings, and historical trends in psychology, but
finds it difficult to recall identifying features of different
precepts.
Explains and begins to integrate major concepts, theoretical
perspectives, empirical findings, and historical trends in
psychology.
Analyzes and integrates major concepts, theoretical
perspectives, empirical findings, and historical trends in a
variety of scenarios in the field of psychology.
Provides a critical analysis of major concepts in psychology that
include theoretical perspectives, empirical findings, historical
trends and integration of the findings within the larger socio-
cultural context.
COMMENTS:
Program Outcome Six

APPLICATION OF PSYCHOLOGY
Unsatisfactory
1
Emerging
2
Proficient
3
Exemplary
4
Competency 6.1
Apply psychological principles to examine and analyze
personal, social, and organizational issues.
Identifies psychological principles and begins to examine and
analyze personal, social, and organizational issues, but is unable
to integrate or generalize applications beyond given examples.
Explains and begins to integrate personal, social, and
organizational issues or behavior using different psychological
principles, demonstrating ability to provide explanations that
extend beyond simplistic identification of such principles.
Integratespersonal, social, and organizational issues in applying
psychological principles to everyday problems but does so with
some variability.
Integrates personal, social, and organizational issues in
applying psychological principles to everyday problems with
respect to socio-cultural variables.
COMMENTS:
Program Outcome Seven

INTERPERSONAL EFFECTIVENESS
Unsatisfactory
1
Emerging
2
Proficient
3
Exemplary
4
Competency 7.1
Analyze the importance of effective communication skills in
developing strong interpersonal and organizational relationships
that are culturally sensitive and respectful of diversity.
Identifies the different forms communication, but does not
indicate how it is culturally sensitive and does not describe how
each contributes to effective interpersonal communication and
relationship development both individually and in an
organizational environment.
Identifies culturally sensitive forms of communication, but is
limited in describing how each contributes to effective
interpersonal communication and relationship development both
individually and in an organizational environment.
Analyzes culturally sensitive forms of communication and
identifies how each contributes to effective interpersonal
communication and relationship development both individually
and in an organizational environment.
Evaluates and applies culturally sensitive forms of

communication with an analysis of how each contributes to
effective interpersonal communication and relationship
development both individually and in an organizational
environment.
COMMENTS:
Program Outcome Seven
INTERPERSONAL EFFECTIVENESS
Unsatisfactory
1
Emerging
2
Proficient
3
Exemplary
4
Competency 7.2
Solicit and utilize feedback to develop adaptable and culturally
sensitive approaches of facilitating dynamic interpersonal and
organizational relationships.
Demonstrates only partial openness to receiving and utilizing
feedback to develop strategies of facilitating effective
interpersonal and organizational relationships, but does not
address future behaviors.
Demonstrates openness to receiving feedback and begins to
apply feedback to develop strategies of facilitating current
effective interpersonal and organizational relationships, but

does not integrate feedback in future behaviors.
Applies feedback to develop adaptable strategies that facilitate
effective interpersonal and organizational relationships showing
evidence of how these strategies meet current and future
relational needs.
Proactively seeks and applies feedback to develop flexible
strategies that facilitate dynamic interpersonal and
organizational relationships showing evidence of how these
strategies meet both current and future relational needs.
COMMENTS:
INSTRUCTIONS: You will find below the seven competencies
the BA Psychology program at Argosy University espouses.
While there is no expectation that students come into the
program having mastered the seven (7) competencies, our goal
in the program is to work with you to instill in you these
competencies as you work your way through your degree in
psychology.
So, please be as honest as you can be, noting the areas wherein
you demonstrate exemplary mastery of the program outcomes,
as well as those where you may find yourself at the emerging or
proficient levels. Please mark ONLY one number of the four for
each program learning outcome. The blank box entitled
COMMENTS has been designated as a place where you can, if
you wish, put words to the rating you have given yourself on the
specific program outcome.

of 5 BA 382 Homework Handout
BA 382 - Homework Assignment Handout
This document provides requirements and instructions for each
homework assignment. Homework assignments
are uploaded to Moodle. Email is not an acceptable or
permissible way to submit homework assignments.
Earning an “A” grade (95 pts) requires submitting a well written
homework assignment on-time that satisfies
ALL criteria, is relevant to the topic, and has no grammatical or
spelling errors. Departures from the required
format, omission of required content, and spelling errors will
result in a grade reduction.
Assignments are due Saturday by 11:00 pm unless another
day/time is posted on Moodle. A 5% “late
fee” is assessed per day for late assignments and worth zero
points if submitted one week after their
due date. Post Tech Alerts to the forum boards and upload to the
Moodle homework link prior to
deadlines on Moodle. An additional five (5) points may be
earned by reviewing your submitted work and

feedback. These five (5) points will be added to your total
homework grade as extra credit. You must review
your submitted work within one week after grading to be
eligible for the points.
Technical issues are not valid reasons for late submissions.
Please realize that the notes in the ‘callouts’ on Page 5 showing
a sample tech alert are REQUIREMENTS, not
suggestions. Remember to explicitly tie your article summary
back to the material presented in the text. Read
the chapters BEFORE you look for articles.
HW #1: Tech Alert on IT & Strategy (Ch 3 - 5)
Ch 3 - 5 IT Strategy option: Find one article that relates to the
content covered in Chapters 3 - 5 in our text.
For this option, choose one of the following approaches:
-world’ example that illustrates a
topic presented in one of these chapters or
find a related article that extend the book’s discussion on IT and
strategy, and/or;
the
book margins from Chapters 3 - 5.

sections and find an article that helps you
answer a question that is posed, or;
-up on a specific case study presented in the text or
find comparable examples. If you choose
this option, you must focus on new information about the
organization that is not included in the text.
HW #2: Tech Alert on Software (Ch 11 or 12)
Chapter 11: Understanding Software or Chapter 12: Software in
Flux: Partly Cloudy
relating to Cloud Computing, Open Source
Software, Service-Oriented Architecture (SoA), Enterprise
systems, ERP, Software as a Service (SaaS),
or;
at cover user interface design and/or
trends/advances in the user interface (speech,
gesture recognition, mobility, etc.), or;
implementation in an organization--Success or
Failure; or
you have participated in the implementation of a new
information system deployment at work (even
as an end-user), you can write up your experiences. No article
is required if you choose this option, but

the rest of the tech alert requirements must be followed (quote
from text, etc.)
Page 2 of 5 BA 382 Homework Handout
REQUIRED FORMAT & CONTENT OF TECH ALERTS
Technology alerts are one full-page, (no more or less) memos
addressed to the instructor. The focus should be
to 1) introduce the article by first explaining why it is relevant
to our chapter topic, 2) summarize the main
points of the article, and 3) provide a ‘response’ to the article.
Unless otherwise specified, the source used should be an article
published within the last 6 months from a
credible source. Acceptable sources are published articles in
magazines, newspapers, scholarly journals, or on-
line publications. Company web sites, personal sites, blog
entries, Wikipedia entries, etc. are not valid sources of
information for this assignment. Do not use company press
releases or product announcements. Rule of thumb:

If you can’t find an article title, date when published, AND
author name(s), then you are not looking at a
suitable article for this assignment.
I recommend finding in-depth articles in business magazines or
newspapers that focus on USE of technology
rather than the technology itself. An appropriate article
selection with clear relevance to the chapter content is
required. The business databases available from
www.sou.edu/library may be helpful. Another good option is to
browse or search specific on-line IT/business publications –
links to some of these are provided in Moodle.
The callouts on the following page highlight the format and
content requirements for each tech alert.
Additional comments:
assigned chapter of the text. This quote must
be used to provide a logical connection from the textbook to the
information in your article summary.
Cite the quote properly (e.g. (Gallaugher, 2014, p. 123) or
(Gallaugher, 2014, sec. 5.4) for e-book
readers) and use the format shown on the next page. Do not
include our text at the top of the memo

where you will be citing the article you found.
quotes. Because the memo is a summary of
the article and you have given all the proper citation
information in the first paragraph, you can cite the
article within the text by referring to the article itself, the
writer’s name. (See tech alert for example.)
unfamiliar with, look them up (in the book
glossary or in an on-line computing dictionary), and include the
definition in your write-up. If you
don’t understand what you are writing about, that defeats the
purpose of this assignment. Do not use an
article you don’t understand – look for another.
not provide new information from the
article in this paragraph. This paragraph can include, but is not
limited to:
o personal observations,
o your perception of the importance of the issue or your
response to what you learned, or
o conclusions about how the information from the article
supports or refutes information from the
text, or from something you’ve learned in another class,
Identifying the source of your information: As shown in the
example on the next page, use published articles

and include the name of the article, the author, the date posted
(not the date you accessed it), and the name of the
journal, newspaper, or magazine. Do not identify the search
engine (Google or the library database
(EBSCO-Host) as the source of your article. Use the name of
the publication itself.
The sample tech alert on the next page is an illustration of the
content and format of a tech alert.
Please Note: the sample assignment uses a bullet format to
summarize some points made in the article. Using
bulleted points can be helpful, but this is not required. If you
do use bulleted points, be sure that you provide a
logical ‘introduction’ to the points, that each point corresponds
with that introductory statement, and that the
points you make are consistent in style, verb use, etc.
http://www.sou.edu/library
BA 382 Tech Alerts: REQUIRED FORMAT--each “callout”
below indicates a required element to be
included in each tech alert.

Technology Alert #n
To: Daniel Clark, MM
From: your name
Subject: Outsourcing Software Development (Chapter 10)
Date: Today’s date
Pickering, C. (2014, June 06). Choosing the best software
sourcing solution. Retrieved from
http://itmanagement.earthweb.com/ /article.php/3629041
In response to our discussion concerning the trends towards
outsourcing software development,
I thought you might be interested in the article cited above.
Outsourcing is defined in the
textbook as “the purchase of any product or service from
another company” (Gallaugher, 2014,
p. xx) or ((Gallaugher, 2014, sec. x.x) for e-book readers). This
article compares the benefits of
outsourcing software development to the benefits of developing
software in-house.

According to a recent survey, “50% of existing production
applications were delivered by in-
house development, 46% by purchased packages, 3% by
domestic outsourcing, almost 1% by
Application Service Providers (ASP), and less than 1% by
offshore outsourcing.”
The article mentions the following advantages of in-house
development:
depends on corporate
success.
they know how the
company operates, and they understand company culture.
face-to-face meetings as
well as informal contact around the “coffee pot”. As noted in
the article, physical
proximity “promotes better personal relationships that, in turn,
promote better project
results.”
Pickering notes that the primary advantage of outsourcing is to
save on costs, but notes that the

advantages of in-house development as stated above are hard to
overcome. He concludes the
article by stating that internal and external projects are not
suited for the same types of projects.
“The more commodity-like the project the better suited it is for
external development. The more
unique-which usually means the more critical to corporate
success-the better suited it is for
internal development.” He goes on to state that it doesn’t have
to be all or nothing: the simple
functions of a large project can be contracted out, while the
subtle or complex functions can be
developed internally.
Many of the points made in this article were consistent with
those made in the text and it was
helpful to read about how the approach taken may depend on the
type of system being
developed. However, the article overlooked several
disadvantages of insourcing software
development discussed in our text, particularly the lack of
expertise that in-house developers
may have with new technologies.

Include
this
line.
Use 12 pt. font with single-
spaced paragraphs and one
blank line between
paragraphs.
Include book
chapter in
Subject line
Summarize article
in your own words.
All direct quotes
must be enclosed
in quotation
marks.
(Bullet format
used here is just an

option—if using
bullets, be
consistent in style
and format.)
Properly
formatted
APA
Citation
with
hanging
indent (Do
not
reference
our text).
What do you think? The concluding paragraph should only be
your thoughts about the topic. This paragraph should
address the topic of the article. Do not provide general critique
such as “I thought the article was well-written” or “I wish
that the author had included more information about…” Do not

include quotes from our text or article in this section.
Specific and
relevant
reference to
textbook
content. You
must quote our
text in the first
paragraph.
Technology Plan Assignment
Creating a business plan is the primary activity of BA 499
Business Planning, the capstone course required for
business majors. The purpose of this assignment is for you to
think about 1) how your type of business could
achieve competitive advantages through the use of technology
and 2) how information technology can be used

to support your core transaction processing. To do this, you
will need to find and examine two different
software applications that could be used by your business. (If
you don’t have an idea for a business plan yet,
that’s okay – just pick a specific type of business that you could
potentially be interested in.) Note: Many classes
evolve around your business idea so it will benefit you in the
long run to decide on a business type and use the
same business for your remaining courses.
Secondly, you will need to develop your information system
that is intertwined within your marketing strategy.
Information systems will aid in customer data collection and
can be used to facilitate customer retention if
properly used to its full potential. You will develop a strategy
that uses your information system to attain and
retain current and future customers.
Formatting and Content Requirements: Your report must be a
minimum of three full pages (max 5) and
should be professional in appearance. Specifically, include a
centered title at the top of the first page, and create
a page footer with your name, date, and page number (in Page x
of y format as shown in this document). The

following four sections should be included with underlined
headings, and paragraphs should be single-spaced
with double-spacing between and no extra spacing between
lines. Use Times New Roman 12-point font.
Business Description:
products/services your business will provide,
your target market, an estimate of the size of the business, and
where your business will be located. If
you are proposing a unique type of business, be sure that your
business model (how do you make your
money) is evident. Copying and using an existing business is
not permissible. Be able to discuss why
you chose a particular target market and location for your
business.
Social Media and Marketing Strategy:
-commerce strategies. Some
possible questions to consider: What
types of Web 2.0 strategies would you employ? Would you
have a web site? What purpose(s) would it
serve? Do you anticipate conducting any B2B or B2C e-
commerce? How can you use social media to

increase your competitive advantage? Which social media sites
will you use (you must specifically
name the ones you will use)?
Information System:
phone, email) that you will collect from your
potential customers - assume you can get any information you
would like such as birthdate, social
security #, etc.
industry (e.g. if selling alcohol, you would need a
birthdate). Be specific and use all five pieces of data. This is
the heart of your information system so
attention to detail is crucial. Specifically address what
processes you will use to attain and retain your
customers with your information system. For example, will you
mail them a postcard on their birthday?

Data processing needs
business. General applications are available
for common business tasks (such as payroll and accounting), but
there is also a wide range of “vertical
software applications” that address the needs of specific types
of businesses, such as retail management,
service management, restaurant management, fundraising, etc.
Often, there are even more focused
solutions within an industry type - for example, there is retail
software specific to bicycle shops,
restaurant management software addressing the unique needs of
pizzerias, etc. Try to find software that
is customized as much as possible to your specific business
type.
what type you are searching for.
or a web-based “cloud computing”
solution) that address your core transaction processes. For
example, if your business is a retail store,
focus on a system that streamlines point of sale (POS) and
inventory processes.

selected programs using the format shown
below. In the first column, list at least eight software
requirements for your business, and indicate
whether the solutions that you are considering would meet these
requirements.
Example of selected software requirements for a Property
Management Company. Start each
requirement with a VERB – each requirement should complete
the sentence: “The system will be used
to ____________.”
Software Requirements
Name of
Software A
Name of
Software B
Process Rental Income Yes Yes
Calculate Management Fees Yes No

Enter work orders for repairs Yes Yes
Issue monthly owner statements Yes Yes
Track tenant complaints No Yes
Track security deposits Yes No
Print 1099 forms Yes No
Email receipts Yes Yes
the applications researched and explain why
you would choose that application over the
other.
processes that are automated or streamlined
through the use of your chosen software.
Operating Environment
the specifications of the
hardware/operating system needed to run your chosen software?
Most web sites include specific
information on system requirements. List all of the
requirements in this section.
need to provide the specifications of that

hardware (processor speed, memory, OS, etc.).
-based SaaS offering, you
will still need to supply the specifications
of the hardware and operating system that you will be using to
access the SaaS.
you need a computer that can access
the Internet.
3.1 Introduction
Learning Objective
Understand how Zara’s parent company Inditex leveraged a
technology-enabled strategy to become the world’s largest
fashion retailer.
Operating in the northern coastal city of La Coruña (or A
Coruña in the local Galician language), Spanish entrepreneur
Amancio Ortega was brainstorming names for his new shop and
settled on “Zorba” after the classic movie Zorba the Greek. He
simply thought it was “a nice name.” Unfortunately, there was a
bar with the same name a few blocks away and the bar’s owner
was worried patrons would be confused. The molds for the
letters for Ortega’s shop had already been cast, so they played
around with what they had and came up with “Zara.”[] As it
turns out, for Zara it’s technology, not the name, that has made
all the difference in its rise to dominate the decidedly ungeeky
fashion industry.
Today, Zara is the game-changing crown jewel in the
multibrand empire of Inditex Corporation (Industrias de Diseño
Textil), the world’s largest pure-play fashion retailer and a firm
that’s bigger than Gap, H&M, Topshop, and anyone else in the

space. The firm’s supremacy is plotted and executed from “The
Cube,” the gleaming, futuristic headquarters located in La
Coruña’s Arteixo industrial area. The blend of technology-
enabled strategy that Zara has unleashed seems to break all of
the rules in the fashion industry. The firm shuns advertising and
rarely runs sales. Also, in an industry where nearly every major
player outsources manufacturing to low-cost countries, Zara is
highly vertically integrated, keeping huge swaths of its
production process in-house. These counterintuitive moves are
part of a recipe for success that’s beating the pants off the
competition and has catapulted Ortega to become the world’s
third richest man, ahead of Warren Buffet.
Figure 3.1
Zara’s operations are concentrated in Spain, but they have
stores around the world like these in Manhattan and Shanghai.
Source: Used with permission from Inditex.
The firm tripled in size between 1996 and 2000, and then its
revenue skyrocketed from $2.43 billion in 2001 to more than
$20 billion in 2012. In August 2008, sales edged ahead of Gap,
making Inditex the world’s largest fashion retailer.[] Table 3.1 “
Gap versus Inditex at a Glance” compares the two fashion
retailers. While Inditex supports eight brands, Zara is
unquestionably the firm’s crown jewel and growth engine,
accounting for roughly two-thirds of sales.[]
Table 3.1 Gap versus Inditex at a Glance
Gap
Inditex

Revenue
$16.2 billion
$22.7 billion
Net Income
$1.28 billion
$3.23 billion
Number of Stores
3,179
6,393
Number of Countries
31
88
Biggest Brand
Gap
Zara
Number of Other Brands
4
8
Based in
San Francisco, USA
Arteixo (near La Coruña), Spain
First Store Opened
1969
1975
Sources: Year-end 2013 figures from http://www.gapinc.com,
http://www.inditex.com, and http://www.bloomberg.com.
Why Study Zara?
While competitors falter, Zara is undergoing one of the fastest

global expansions the fashion world has ever seen, opening one
store per day and entering new markets worldwide—eighty-
eight countries so far. The chain’s profitability is among the
highest in the industry.[] The fashion director for luxury goods
maker LVMH calls Zara “the most innovative and devastating
retailer in the world.”[]
Zara’s duds look like high fashion but are comparatively
inexpensive (average item price is $27, although prices vary by
country).[] A Goldman analyst has described the chain as
“Armani at moderate prices,” while another industry observer
suggests that while fashions are more “Banana Republic,” prices
are more “Old Navy.”[] Legions of fans eagerly await “Z-day,”
the twice-weekly inventory delivery to each Zara location that
brings in the latest clothing lines for women, men, and children.
One well-known fan of the brand is the Duchess of Cambridge.
The day after the wedding of Prince William and Kate
Middleton, she made an appearance in a cornflower blue,
pleated polyester dress from Zara. The price was £49.99[] for
high-quality, inexpensive fashion that’s good enough for a
future queen.
In order to understand and appreciate just how counterintuitive
and successful Zara’s strategy is, and how technology makes all
of this possible, it’s important to first examine the conventional
wisdom in apparel retail. To do that we’ll look at former
industry leader—Gap.
Gap: An Icon in Crisis
Most fashion retailers place orders for a seasonal collection
months before these lines make an appearance in stores. While
overseas contract manufacturers may require hefty lead times,
trying to guess what customers want months in advance is a
tricky business. In retail in general and fashion in particular,
there’s a saying: inventory equals death. Have too much
unwanted product on hand and you’ll be forced to mark down or

write off items, killing profits. For years, Gap sold most of what
it carried in stores. Micky Drexler, a man with a radar-accurate
sense of style and the iconic CEO who helped turn Gap’s
button-down shirts and khakis into America’s business casual
uniform, led the way. Drexler’s team had spot-on tastes
throughout the 1990s, but when sales declined in the early part
of the following decade, Drexler was left guessing on ways to
revitalize the brand, and he guessed wrong—disastrously wrong.
Chasing the youth market, Drexler filled Gap stores with
miniskirts, low-rise jeans, and even a much-ridiculed line of
purple leather pants.[] The throngs of teenagers he sought to
attract never showed up, and the shift in offerings sent Gap’s
mainstay customers to retailers that easily copied the styles that
Gap had made classic.
The inventory hot potato Drexler was left with crushed the firm.
Gap’s same-store sales declined for twenty-nine months
straight. Profits vanished. Gap founder and chairman Dan Fisher
lamented, “It took us thirty years to get to $1 billion in profits
and two years to get to nothing.”[] The firm’s debt was
downgraded to junk status.
Drexler was out and for its new head the board chose Paul
Pressler, a Disney executive who ran theme parks and helped
rescue the firm’s once ailing retail effort. Under Pressler, Gap’s
struggles continued, largely due to bad bets on colors and
styles.[] Pressler’s tenure saw same-store sales decline in
eighteen of twenty-four months.[] The marketing model used by
Gap to draw customers in via big-budget television promotion
had collapsed. A Fortune article on Pressler’s leadership was
titled “Fashion Victim.” BusinessWeek described his time as
CEO as a “Total System Failure.”[] Under the firm’s third CEO
in a decade and after years of restructuring that resulted in the
closure of hundreds of stores, Gap profits have finally returned,
but the firm’s admiration of Inditex, and its inability to act on
this envy, remains clear. Says one Gap exec, “I would love to

organize our business like Inditex, but I would have to knock
the company down and rebuild it from scratch.”[]
Contract Manufacturing: Lower Costs at What Cost?
Conventional wisdom suggests that leveraging cheap contract
manufacturing in developing countries can keep the cost of
goods low. Firms can lower prices and sell more product or
maintain higher profit margins—all good for the bottom line.
But many firms have also experienced the ugly downside to this
practice. Global competition among contract firms has led to
race-to-the-bottom cost-cutting measures. Too often, this means
that in order to have the low-cost bid, contract firms skimp on
safety, ignore environmental concerns, employ child labor, and
engage in other ghastly practices.
The apparel industry in particular has been plagued by
accusations of sweatshop labor and unsafe working conditions.
Incidents such as the Spring 2013 Bangladesh Rana Plaza
disaster, which killed more than 1,100 people in the collapse of
an illegally constructed eight-story building housing multiple
contract garment factories, underscore the human toll of
unacceptable contract manufacturing practices. Walmart, The
Children’s Place, and Benetton were among the firms said to
have purchased clothing from firms operating in Rana Plaza.[]
The track record of Bangladeshi garment factories has been
notably grim. In the dozen years prior to the Rana Plaza
incident, over 700 workers in Bangladesh were killed in
garment factory fires.[] While Gap was not implicated in the
Rana Plaza incident, the firm was singled out as a protest target
because it is one of the largest importers of clothing from
Bangladesh,[] and it refused to sign a safety accord backed by
H&M and Zara, among others.[]
Big firms are big targets, and those that fail to adequately
ensure their products are made under acceptable labor
conditions risk a brand-damaging backlash that may turn off

customers, repel new hires, and leave current staff feeling
betrayed. Today’s manager needs to think deeply not only about
their own firm’s ethical practices, but also those of all of their
suppliers and partners.
Source: Wikimedia,
http://en.wikipedia.org/wiki/File:Dhaka_Savar_Building_Collap
se.jpg.
Tech for Good: The Fair Factories Clearinghouse
The problem of sweatshop labor and dismal industry practices
has plagued the clothing industry for years. Managers often feel
the pressure to seek ever-lower costs and all too often end up
choosing suppliers with unacceptably poor practices. Even well-
meaning firms can find themselves stung by corner-cutting
partners that hide practices from auditors or truck products in
from unmonitored off-site locations. The results can be tragic
for those exploited, and can carry lasting negative effects for
the firm. The sweatshop moniker continues to dog Nike years
after allegations were uncovered and the firm moved
aggressively to deal with its problems.[]
Nike rival Reebok (now part of Adidas) has always taken
working conditions seriously. The firm even has a Vice
President of Human Rights and has made human dignity a key
platform for its philanthropic efforts. Reebok invested millions
in developing an in-house information system to track audits of
its hundreds of suppliers along dimensions such as labor, safety,
and environmental practices. The goal in part was to identify
any bad apples, so that one division, sporting goods, for
example, wouldn’t use a contractor identified as unacceptable
by the sneaker line.
The data was valuable to Reebok, particularly given that the
firm has hundreds of contract suppliers. But senior management

realized the system would do even more good if the whole
industry could share and contribute information. Reebok went
on to donate this system and provided critical backing to help
create the nonprofit organization Fair Factories Clearinghouse.
With management that included former lawyers for Amnesty
International, Fair Factories (FairFactories.org) provides
systems where apparel and other industries can share audit
information on contract manufacturers. Launching the effort
wasn’t as easy as sharing the technology. The U.S. Department
of Justice needed to provide a special exemption and had to be
convinced the effort wouldn’t be used by buyers to collude and
further squeeze prices from competitors (the system is free of
pricing data).
Suppliers across industries now recognize that if they behave
irresponsibly the Fair Factories system will carry a record of
their misdeeds, notifying all members to avoid the firm. As
more firms use the system, its database becomes broader and
more valuable. To its credit, Nike has since joined the Fair
Factories Clearinghouse.
Key Takeaways
Zara has used technology to dominate the retail fashion industry
as measured by sales, profitability, and growth.
Excess inventory in the retail apparel industry is the kiss of
death. Long manufacturing lead times require executives to
guess far in advance what customers will want. Guessing wrong
can be disastrous, lowering margins through markdowns and
write-offs.
Contract manufacturing can offer firms several advantages,
including lower costs and increased profits. But firms have also
struggled with the downside of cost-centric contract
manufacturing when partners have engaged in sweatshop labor,
poor working conditions, and environmental abuse.
Firms with products manufactured under acceptable labor
conditions face multiple risks, including legal action, brand

damage, reduced sales, lower employee morale, and decreased
appeal among prospective employees.
Questions and Exercises
Has anyone shopped at Zara? If so, be prepared to share your
experiences and observations with your class. What did you like
about the store? What didn’t you like? How does Zara differ
from other clothing retailers in roughly the same price range? If
you’ve visited Zara locations in different countries, what
differences did you notice in terms of offerings, price, or other
factors?
What is the “conventional wisdom” of the fashion industry with
respect to design, manufacturing, and advertising?
What do you suppose are the factors that helped Gap to at one
point rise to be first in sales in the fashion industry? Why do
you suppose Gap profits collapsed?
Where do Gap clothes come from? Who makes them? Why? Are
there risks in this approach?
Describe the downside of working with a supplier exposed as
having used unethical practices. How does this potentially
damage a firm? How can technology play a role in helping a
firm become more socially responsible with its supply sourcing?
Describe the Fair Factories Clearinghouse. Which firm thought
of this effort? Why did they give the effort away? Think in
terms of strategic resources: what happens as more firms join
this effort a
3.2 Don’t Guess, Gather Data
Learning Objective
Contrast Zara’s approach with the conventional wisdom in
fashion retail, examining how the firm’s strategic use of
information technology influences design and product offerings,
manufacturing, inventory, logistics, marketing, and ultimately
profitability.
Having the wrong items in its stores hobbled Gap for roughly a
decade. But how do you make sure stores carry the kinds of
things customers want to buy? Try asking them. 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)—handheld computing devices
meant largely for mobile use outside an office setting—to
gather customer input, staff regularly chat up customers to gain
feedback on what they’d like to see more of. A Zara manager
might casually ask, “What if this skirt were in a longer length?”
“Would you like it in a different color?” “What if this V-neck
blouse were available in a round neck?” Managers are motivated
because they have skin in the game. The firm is keen to reward
success—as much as 70 percent of salaries can come from
commissions.[]
Another level of data gathering starts as soon as the doors close.
Then the staff turns into a sort of investigation unit in the
forensics of trendspotting, looking for evidence in the piles of
unsold items that customers tried on but didn’t buy. Are there
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—a transaction processing system that captures customer
purchase information—showing how garments rank by sales.
Using these two systems, managers can quickly and regularly
send updates that combine the hard data captured at the cash
register with insights on what customers would like to see.[] All
this valuable data allows the firm to plan styles and issue rebuy
orders based on feedback rather than hunches and guesswork.
The goal is to improve the frequency and quality of decisions
made by the design and planning teams.
Design
Rather than create trends by pushing new lines via catwalk
fashion shows, Zara designs follow evidence of customer
demand. The firm’s chairman and CEO notes, “Our business
model is the opposite of the traditional model. Instead of
designing a collection long before the season, and then working

out whether clients like it or not, we try to understand what our
customers like, and then we design it and produce it.”[] Data on
what sells and what customers want to see goes directly to “The
Cube,” where teams of some three hundred designers crank out
an astonishing thirty thousand items a year[] versus two to four
thousand items offered up at big chains like H&M (the world’s
third largest fashion retailer) and Gap.[] While H&M has
offered lines by star designers like Stella McCartney and Karl
Lagerfeld, as well as celebrity collaborations with Madonna and
Kylie Minogue, the Zara design staff consists mostly of young,
hungry Project Runway types fresh from design school. There
are no prima donnas in “The Cube.” Team members must be
humble enough to accept feedback from colleagues and share
credit for winning ideas. Individual bonuses are tied to the
success of the team, and teams are regularly rotated to cross-
pollinate experience and encourage innovation.
Manufacturing and Logistics
In the fickle world of fashion, even seemingly well-targeted
designs could go out of favor in the months it takes to get plans
to contract manufacturers, tool up production, then ship items to
warehouses and eventually to retail locations. But getting
locally targeted designs quickly onto store shelves is where
Zara really excels. In one telling example, when one pop star
played a set of concerts in Spain, teenage girls arrived to the
final show sporting a Zara knockoff of the outfit she wore
during her first performance.[] The average time for a Zara
concept to go from idea to appearance in store is fifteen days
versus their rivals who receive new styles once or twice a
season. Smaller tweaks arrive even faster. If enough customers
come in and ask for a round neck instead of a V neck, a new
version can be in stores within just ten days.[] To put that in
perspective, Zara is twelve times faster than Gap despite
offering roughly ten times more unique products![] At H&M, it
takes three to five months to go from creation to delivery—and
they’re considered one of the best. Other retailers need an

average of six months to design a new collection and then
another three months to manufacture it. VF Corp (Lee,
Wrangler) can take nine months just to design a pair of jeans,
while J. Jill needs a year to go from concept to store shelves.[]
At Zara, most of the products you see in stores didn’t exist
three weeks earlier, not even as sketches.[]
The firm is able to be so responsive through a competitor-
crushing combination of vertical integration and technology-
orchestrated coordination of suppliers, just-in-time
manufacturing, and finely tuned logistics. Vertical integration is
when a single firm owns several layers in its value chain.[]
While H&M has nine hundred suppliers and no factories, nearly
60 percent of Zara’s merchandise is produced in-house, with an
eye on leveraging technology in those areas that speed up
complex tasks, lower cycle time, and reduce error. Profits from
this clothing retailer come from blending math with a data-
driven fashion sense. Inventory optimization models help the
firm determine how many of which items in which sizes should
be delivered to each specific store during twice-weekly
shipments, ensuring that each store is stocked with just what it
needs.[] Outside the distribution center in La Coruña, fabric is
cut and dyed by robots in twenty-three highly automated
factories. Zara is so vertically integrated, the firm makes 40
percent of its own fabric and purchases most of its dyes from its
own subsidiary. Roughly half of the cloth arrives undyed so the
firm can respond as any midseason fashion shifts occur. When
cotton prices rose to record levels, Zara was able to shift
offerings away from more costly fabrics, preserving margins.
By contrast, during that same period rival H&M saw profits
drop 10 percent largely due to margin pressure.[] After cutting
and dying, many items are stitched together through a network
of local cooperatives that have worked with Inditex so long they
don’t even operate with written contracts. The firm does
leverage some contract manufacturers, but most of those used
for trendy clothes are fairly close (Portugal, Morocco, and

Turkey). There are far cheaper places to seek partners, but for
Zara, speed beats costs and drives profits.[] Any contractors
employed in farther regions (the firm has used partners in Asia
and Latin America) produce staple items with longer shelf lives,
such as t-shirts and jeans, but such goods account for only about
one-eighth of dollar volume.[]
All of the items the firm sells end up in a five-million-square-
foot distribution center in La Coruña, or a similar facility in
Zaragoza in the northeast of Spain. The La Coruña facility is
some nine times the size of Amazon’s warehouse in Fernley,
Nevada, or about the size of ninety football fields.[] The
facilities move over seventeen million items every week,[] with
no item staying in-house for more than seventy-two hours.
Ceiling-mounted racks and customized sorting machines
patterned on equipment used by overnight parcel services, and
leveraging Toyota-designed logistics, whisk items from
factories to staging areas for each store. Clothes are ironed in
advance and packed on hangers, with security and price tags
affixed. This system means that instead of wrestling with
inventory during busy periods, employees in Zara stores simply
move items from shipping box to store racks, spending most of
their time on value-added functions like helping customers find
what they want. Efforts like this help store staff regain as much
as three hours in prime selling time.[]
Trucks serve destinations that can be reached overnight, while
chartered cargo flights serve farther destinations within forty-
eight hours.[] The firm recently tweaked its shipping models
through Air France–KLM Cargo and Emirates Air so flights can
coordinate outbound shipment of all Inditex brands with return
legs loaded with raw materials and half-finished clothes items
from locations outside of Spain. Zara is also a pioneer in going
green, with an environmental strategy that includes the use of
renewable energy systems at logistics centers and biodiesel for
the firm’s trucking fleet.

Stores
Most products are manufactured for a limited production run.
While running out of bestsellers might be seen as a disaster at
most retailers, at Zara the practice delivers several benefits.
First, limited runs allow the firm to cultivate the exclusivity of
its offerings. While a Gap in Los Angeles carries nearly the
same product line as one in Milwaukee, each Zara store is
stocked with items tailored to the tastes of its local clientele. A
Fifth Avenue shopper quips, “At Gap, everything is the same,”
while a Zara shopper in Madrid says, “You’ll never end up
looking like someone else.”[] Upon visiting a Zara, the CEO of
the National Retail Federation marveled, “It’s like you walk
into a new store every two weeks.”[]
Second, limited runs encourage customers to buy right away and
at full price. Savvy Zara shoppers know the newest items arrive
on black plastic hangers, with store staff transferring items to
wooden ones later on. Don’t bother asking when something will
go on sale; if you wait three weeks the item you wanted has
almost certainly been sold or moved out to make room for
something new. Says one twenty-three-year-old Barcelona
shopper, “If you see something and don’t buy it, you can forget
about coming back for it because it will be gone.”[] A study by
consulting firm Bain & Company estimated that the industry
average markdown ratio is approximately 50 percent, and less
than 1 percent of JCPenney revenue came from items bought at
full price.[] Contrast this with Zara, where 85 percent of
products are sold without a discount.[]
The constant parade of new, limited-run items also encourages
customers to visit often. The average Zara customer visits the
store seventeen times per year, compared with only three annual
visits made to competitors.[] Even more impressive—Zara puts
up these numbers with almost no advertising. The firm’s

founder has referred to advertising as a “pointless distraction.”
The assertion carries particular weight when you consider that
during Gap’s collapse, the firm increased advertising spending
but sales dropped.[] Fashion retailers spend an average of 3.5
percent of revenue promoting their products, while ad spending
at Inditex is just 0.3 percent.[]
Finally, limited production runs allow the firm to, as Zara’s
CEO once put it, “reduce to a minimum the risk of making a
mistake, and we do make mistakes with our collections.”[]
Failed product introductions are reported to be just 1 percent,
compared with the industry average of 10 percent.[] So even
though Zara has higher manufacturing costs than rivals, Inditex
gross margins are nearly 60 percent compared to 39 percent at
Gap.[]
While stores provide valuable frontline data, headquarters plays
a major role in directing in-store operations. Software is used to
schedule staff based on each store’s forecasted sales volume,
with locations staffing up at peak times such as lunch or early
evening. The firm claims these more flexible schedules have
shaved staff work hours by 2 percent. This constant refinement
of operations throughout the firm’s value chain has helped
reverse a prior trend of costs rising faster than sales.[]
Even the store displays are directed from “The Cube,” where a
basement staging area known as “Fashion Street” houses a
Potemkin village of bogus storefronts meant to mimic some of
the chain’s most exclusive locations throughout the world. It’s
here that workers test and fine-tune the chain’s award-winning
window displays, merchandise layout, and even determine the
in-store soundtrack. Every two weeks, new store layout
marching orders are forwarded to managers at each location.[]
Technology ≠ Systems. Just Ask Prada
Here’s another interesting thing about Zara. Given the

sophistication and level of technology integration within the
firm’s business processes, you’d think that Inditex would far
outspend rivals on tech. But as researchers Donald Sull and
Stefano Turconi discovered, “Whether measured by IT workers
as a percentage of total employees or total spending as a
percentage of sales, Zara’s IT expenditure is less than one-
fourth the fashion industry average.”[] Zara excels by targeting
technology investment at the points in its value chain where it
will have the most significant impact, making sure that every
dollar spent on tech has a payoff.
Contrast this with high-end fashion house Prada’s efforts at its
flagship Manhattan location. The firm hired the Pritzker Prize—
winning hipster architect Rem Koolhaas to design a location
Prada would fill with jaw-dropping technology. All items for
sale in the store would sport radio frequency identification
(RFID) tags (small chip-based tags that wirelessly emit a unique
identifying code for the item that they are attached to). Walk
into a glass dressing room and customers could turn the walls
opaque, then into a kind of combination mirror and heads-up
display. By wirelessly reading the tags on each garment,
dressing rooms would recognize what was brought in and make
recommendations of matching accessories as well as similar
products that patrons might consider. Customers could check
inventory, and staff wielding PDAs could do the same. A
dressing room camera would allow clients to see their front and
back view side-by-side as they tried on clothes.
It all sounded slick, but execution of the vision was disastrous.
Customers didn’t understand the foot pedals that controlled the
dressing room doors and displays. Reports surfaced of
fashionistas disrobing in full view, thinking the walls went
opaque when they didn’t. Others got stuck in dressing rooms
when pedals failed to work, or doors broke, unable to withstand
the demands of the high-traffic tourist location. The inventory
database was often inaccurate, regularly reporting items as out

of stock even though they weren’t. As for the PDAs, staff
reported that they “don’t really use them anymore” and that “we
put them away so tourists don’t play with them.” The
investment in Prada’s in-store technology was also simply too
high, with estimates suggesting the location took in just one-
third the sales needed to justify expenses.[]
The Prada example offers critical lessons for managers. While
it’s easy to get seduced by technology, an information system
(IS) is actually made up of more than hardware and software.
An IS also includes data used or created by the system, as well
as the procedures and the people who interact with the system.[]
Getting the right mix of these five components is critical to
executing a flawless information system rollout. Financial
considerations should forecast the return on investment (ROI)—
the amount earned from an expenditure—of any such effort (i.e.,
what will we get for our money and how long will it take to
receive payback?). And designers need to thoroughly test the
system before deployment. At Prada’s Manhattan flagship store,
the effort looked like tech chosen because it seemed fashionable
rather than functional.
Key Takeaways
Zara store management and staff use PDAs and POS systems to
gather and analyze customer preference data to plan future
designs based on feedback, rather than on hunches and
guesswork.
Zara’s combination of vertical integration and technology-
orchestrated supplier coordination, just-in-time manufacturing,
and logistics allows it to go from design to shelf in days instead
of months.
Advantages accruing to Inditex include fashion exclusivity,
fewer markdowns and sales, lower marketing expenses, and
more frequent customer visits.
Zara’s IT expenditures are low by fashion industry standards.
The spectacular benefits reaped by Zara from the deployment of

technology have resulted from targeting technology investment
at the points in the value chain where it has the greatest impact,
and not from the sheer magnitude of the investment. This is in
stark contrast to Prada’s experience with in-store technology
deployment.
While information technology is just hardware and software,
information systems also include data, people, and procedures.
It’s critical for managers to think about systems, rather than just
technologies, when planning for and deploying technology-
enabled solutions.
In what ways is the Zara model counterintuitive? In what ways
has Zara’s model made the firm a better performer than Gap and
other competitors?
What factors account for a firm’s profit margin? What does Gap
focus on? What factors does Zara focus on to ensure a strong
profit margin?
How is data captured in Zara stores? Using what types or
classifications of information systems? How does the firm use
this data?
What role does technology play in enabling the other elements
of Zara’s counterintuitive strategy? Could the firm execute its
strategy without technology? Why or why not?
How does technology spending at Zara compare to that of
rivals? Advertising spending? Failed product percentages?
Markdowns?
What risks are inherent in the conventional practices in the
fashion industry? Is Zara susceptible to these risks? Is Zara
susceptible to different risks? If so, what are these?
Consider the Prada case mentioned in the sidebar “Technology
≠ Systems.” What did Prada fail to consider when it rolled out
the technology in its flagship location? Could this effort have
been improved for better results? If you were put in charge of
this kind of effort, what would determine whether you’d go
forward with the effort or not? If you did go forward, what
factors would you consider and how might you avoid some of

the mistakes made by Prada?
3.3 Moving Forward
Learning Objectives
Detail how Zara’s approach counteracts several profit-eroding
challenges that many fashion retailers struggle with.
Identify the environmental threats that Zara is likely to face,
and consider options available to the firm for addressing these
threats.
The holy grail for the strategist is to craft a sustainable
competitive advantage that is difficult for competitors to
replicate. And for nearly two decades Zara has delivered the
goods. But that’s not to say the firm is done facing challenges.
Consider the limitations of Zara’s Spain-centric, just-in-time
manufacturing model. By moving all of the firm’s deliveries
through just two locations, both in Spain, the firm remains
hostage to anything that could create a disruption in the region.
Firms often hedge risks that could shut down operations—think
weather, natural disaster, terrorism, labor strife, or political
unrest—by spreading facilities throughout the globe. If
problems occur in northern Spain, Zara has no such fallback.
In addition to the operations vulnerabilities above, the model
also leaves the firm potentially more susceptible to financial
vulnerabilities during periods when the euro strengthens relative
to foreign currencies, especially the dollar (which many
developing nations peg their currency to). A stronger euro
means Zara’s Spain-centric costs would rise at higher rates
compared to competitors. Rising transportation costs are
another concern. If fuel costs rise, the model of twice-weekly
deliveries that has been key to defining the Zara experience
becomes more expensive to maintain.
Still, Zara is able to make up for some cost increases by raising

prices overseas (in the United States, Zara items can cost 40
percent or more than they do in Spain). Zara reports that all
North American stores are profitable, and that it can continue to
grow its presence, serving forty to fifty stores with just two
U.S. jet flights a week.[] Management has considered a logistics
center in Asia, but expects current capacity will suffice for
now.[]
Another possibility might be a regional center. China has
surpassed France to become Zara’s second largest market after
Spain,[] meaning some of the clothing that Zara sells travels
from Asia to Spain, only to be routed back to stores in China.[]
If Zara could replicate what it does in Spain with a facility in
China, Vietnam, or other nation in the region, this could give
the firm more global sourcing flexibility and likely decrease
cost. Still, experts remain skeptical of Zara’s ability to replicate
the firm’s high-tech, flexible capacity half a world away.[] One
advisor to the firm voices concerns in having “two brains, one
in Spain and one in China.”[] A similar facility in the
Maquiladora region of northern Mexico could serve the U.S.
markets via trucking capacity similar to the firm’s Spain-based
access to Europe, while also providing a regional center to serve
expansion throughout the Western Hemisphere. Rising incomes
and a cultural link to Spain make Latin America look like an
increasingly attractive market, but United States may not be as
ripe for growth. While Zara now has over forty-five stores in
the United States and is running a profitable stateside business,
one industry watcher calls the United States a “graveyard of
European retailers.”[] Among U.S. expansion challenges cited
are American fashionistas tend to be concentrated on the coasts
and American sizes are often a significantly different in cut
than the rest of the world.[]
Rivals have studied the Zara recipe, and while none have
attained the efficiency of Amancio Ortega’s firm, many are
trying to learn from the master. There is precedent for contract

firms closing the cycle time gap with vertically integrated
competitors that own their own factories. Dell (a firm that once
built its own PCs while nearly all its competitors use contract
labor) has seen its manufacturing advantage from vertical
integration fall as the partners that supply rivals have mimicked
its techniques and have become far more efficient.[] In terms of
the number of new models offered, clothing is actually more
complex than computing, suggesting that Zara’s value chain
may be more difficult to copy. Still, H&M has increased the
frequency of new items in stores, Forever 21 and Uniqlo get
new looks within six weeks, and Renner, a Brazilian fast
fashion rival, rolls out mini collections every two months.[]
Rivals have a keen eye on Inditex, with the CFO of luxury
goods firm Burberry claiming the firm is a “fantastic case
study” and “we’re mindful of their techniques.”[]
Finally, firm financial performance can also be impacted by
broader economic conditions. When the economy falters,
consumers simply buy less and may move a greater share of
their wallet to less-stylish and lower-cost offerings from deep
discounters like Walmart. Zara is also particularly susceptible
to conditions in Europe since that market accounts for roughly
two-thirds of firm sales.[] Global expansion will provide the
firm with a mix of locations that may be better able to endure
downturns in any single region. Recent Spanish and European
financial difficulties have made clear the need to decrease
dependence on sales within one region, underscoring the
importance of the firm’s continued, aggressive pace of opening
stores in new markets worldwide.
Zara’s winning formula can only exist through management’s
savvy understanding of how information systems can enable
winning strategies (many tech initiatives were led by José Maria
Castellano, a “technophile” business professor who became
Ortega’s right-hand man in the 1980s).[] It is technology that
helps Zara identify and manufacture the clothes customers want,

get those products to market quickly, and eliminate costs related
to advertising, inventory missteps, and markdowns. A strategist
must always scan the state of the market as well as the state of
the art in technology, looking for new opportunities and
remaining aware of impending threats. With systems so highly
tuned for success, it may be unwise to bet against “The Cube.”
Key Takeaway
Zara’s value chain is difficult to copy; but it is not invulnerable,
nor is future dominance guaranteed. Zara management must be
aware of the limitations in its business model, and must
continually scan its environment and be prepared to react to
new threats and opportunities.
The Zara case shows how information systems can impact every
single management discipline. Which management disciplines
were mentioned in this case? How does technology impact each?
Would a traditional Internet storefront work well with Zara’s
business model? Why or why not?
Zara’s just-in-time, vertically integrated model has served the
firm well, but an excellent business is not a perfect business.
Describe the limitations of Zara’s model and list steps that
management might consider to minimize these vulnerabilities.
What challenges might Zara face in expanding to China or to
the United States? Do you think Zara should increase capacity
in Spain or open a regional distribution center in another part of
the world? What are the pros and cons of each approach?
Search online to find examples of firms that suffered production
problems because they employed just-in-time manufacturing or
kept limited inventory on hand. What caused the production
problems? List any steps you can think of that the firms might
consider to minimize the potential of such problems from
occurring in the future. What role might technology play in your
solution?
Footnotes

[1] J. Tagliabue, “A Rival to Gap That Operates Like Dell,”
New York Times, May 30, 2003.↑
[2] C. Rohwedder and K. Johnson, “Pace-Setting Zara Seeks
More Speed to Fight Its Rising Cheap-Chic Rivals,” Wall Street
Journal, February 20, 2008.↑
[3] C. Robertson, “Inditex’s Zara Faces Rising Competition,”
eft, April 22, 2014.↑
[4] T. Buck, “Fashion: A Better Business Model,” Financial
Times, June 18, 2014.↑
[5] S. Berfield and M. Baigorri, “Zara’s Fast Fashion Edge,”
BusinessWeek, November 14, 2013.↑
[6] S. Berfield and M. Baigorri, “Zara’s Fast Fashion Edge,”
BusinessWeek, November 14, 2013.↑
[7] S. Hansen, “How Zara Grew into the World’s Largest
Fashion Retailer,” New York Times, November 9, 2012.↑
[8] S. Hansen, “How Zara Grew into the World’s Largest
Fashion Retailer,” New York Times, November 9, 2012.↑
[9] T. Friscia, K. O’Marah, D. Hofman, and J. Souza, “The
AMR Research Supply Chain Top 25 for 2009,” AMR Research,
May 28, 2009,
http://www.amrresearch.com/Content/View.aspx?compURI=tcm
:7-43469.↑
[10] M. Pfeifer, “Fast and Furious,” Latin Trade, September
2007; and C. Rohwedder and K. Johnson, “Pace-Setting Zara
Seeks More Speed to Fight Its Rising Cheap-Chic Rivals,” Wall
Street Journal, February 20, 2008.↑
[12] M. Baigorri, “Inditex 2011 Profits Rise 12% on Asian,
Online Expansion,” Bloomberg, March 21, 2012.↑

Professional Portfolio
Jamie Bass
Your Program, Your Year
College of Undergraduate Studies
Argosy University
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Section B: Professional Work Samples
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here
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STUDENT SELF APPRIASAL OF LEARNINGBachelor of Arts in Psycho.docx

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