Innovation and Entrepreneurship Growth

Innovation and Entrepreneurship Growth

Executive Summary

The entirety of the paper explains more on technological aspects, innovation, and competencies, as well as how some industries, such as Zara, have managed to balance business affiliations and economic concepts in the quest to achieve sustainability. Thoughts of innovations are also part of what the paper is handling through the establishment of a good rapport between business space, and different customer tastes as well as the value affiliated to information which highly sustains business operations. Aspects of innovation have been analyzed critically whenever an institution is dealing with different competitive business environments. Theoretically, the paper seeks to explain how Zara can strive to achieve desired heights of relevance, sustainability as well as competitiveness without closing down operations more so with standings to free-market economies.

Problem Statement

Zara needs to continue to innovate as well as compete with the competition to remain sustainable.

Problem and Data Analysis

Business innovations are the main elements of everyday business activities. There is a bid to stay relevant to the changing dynamics of demand and supply. Also, customer loyalty is paramount. There are many ways that companies attain sustainability through innovation.

Innovation and Its Concepts.

The introduction of new products in the market arena is widespread in the presence of competition. To achieve the objectives of the company, one must retain the top position in the entire marketplace. Various industries are guided by information, as well as the availability of data from reliable technology and a standard social platform. One of the most vital essentials in any company is a constant source of information since the identification of various business opportunities becomes easier (Ghemawat, 2003). The outcome of such an organization information-wise creates room for economic advantages as well as capital investment. Being knowledgeable is also very vital since comprehending market economies becomes easier. Additionally, knowledge allows easy understanding concerning value and trade.

Zara is very excellent in terms of collecting information as well as distributing. At the company, there is a super-channel set aside to reserve certain rights, such as decision-making concerning their business. Cloth distribution in various stores is done accordingly in the company. Market information collection comes from 950 outlets, thus enabling the store to have the mandate to analyze exclusively the varying patterns connected to customer consumption. The gathering of information empowers the creation of a robust strategy that can sustain the dynamic design of customer preferences and tastes. Besides business, society also falls under the aspects which are affected by innovation (Lüdeke-Freund, 2010). The organization is responsible for pushing demand dynamics. Population growth is very evident, especially the older clientele. The younger generation has dominated the world of business distribution, more so marketing and sales through online means. Monetary economics have been digitalized, thus shifting the old ways of purchasing goods. Online shopping has been held dear by many consumers since packaging quality has also been improved.

Other factors that have been improved in the online mode of purchase include stylish branding and pricing. Manufacturers have also faced chronic and dynamic challenges coming from shifts in consumer needs due to the “in-and-out” caused by seasonal products. Recently, reports from the private channel have reached us, noting that, the total count of intermediaries, fabric designers, clothes, retailers as well as the manufacturers has drastically increased. Customer loyalty has become rare in the modern clothing industry due to the rapid inconsistency in fashion trends. Season and weather patterns are not being adhered to as it was in the traditional odd days concerning the mode of dressing and fashion compared to contemporary society (Tungate, 2008). Our today’s market contains a different commodity compared to yesterday’s. Zara is acutely aware of the changing pattern in the market. Less materialistic clothes are becoming people’s favorite fashion in contemporary society. Their most considerable interest is focusing on the more revealing style. Classy designs such as the high-end ones belonging to branded designers fall under the category of the most treasured clothes. Ancient trends have also bounced back into the market and have taken a pre-established form.

Today and tomorrow’s customers’ needs must be noted with greater emphasis to maintain sustainability in the industry, thus gaining success. Market value has entirely played a vital role in the distribution processes, packaging of the commodity, and lastly, pricing of the goods. The presence of a higher percentage in market value, businesses are attracted to involve themselves in the trade since the outcome in terms of investment return is achieved within a shorter duration. Additionally, high market value attracts different achievements, such as revenue and sales.

Alternatives

The whole apparel industry faces a problem of unsustainability and waste in its supply chain. The problem is mostly felt in the environment of fast fashion. If outfits would be made with as few resources as possible and were fully recyclable new clothes would be churned at a frantic rate. It would be so especially in such a fast fashion firm as Zara that would do it most sustainably. The following are the alternatives in the competition, which could be considered in solving the problem of unsustainability.

• Eating microbes of polyester
  • Polyester is the new, commonly used material for making clothes. Since petroleum is the raw material used to make it, it is difficult to maintain its quality while recycling. However, there are new microbes that eat old shirts and break the polymer down into simple raw materials. The materials can be sold back to the manufacturers of polyester. Also, the process works on fabrics that are made out of a mixture of materials. The process is cheaper than creating new fabric out of petroleum.
• Fabric from algae
  • Traditional textiles, such as cotton, involve many processes to develop. For instance, it can take over 20,000 liters of water to grow cotton that will be enough to make one pair of jeans. Moreover, cotton utilizes more insecticides than other crops. On the other hand, algae grow fast and do not need more water other than that in the lakes and oceans it grows. Therefore, it leaves free land for growing other food plants instead. Zara can start working on the process of converting algae into the fabric.
• A database to track unused fabric on the floor of a factory
  • Typically, about 15% of the fabric is trashed in the process of making garments. A database can be designed to track the materials that are left over to be used by other designers.
• Cotton turned into new clothes
  • It is challenging to recycle cotton. However, a new, environmentally friendly solvent has been developed to dissolve old cotton garments into cotton-like material. The material can be turned into different fibers. It eradicates both waste and the problems that come with growing new cotton.

Key Decision Criteria

The critical decision criteria reflect the steps are taken to maximize on responsibility and competitiveness while taking care of the product line, brand, and quality (Zadek, & McGillivray, 2008). Zara plays a winning game because, amidst all the relevant players in the economy, and all the costs of production, it has managed to expand its businesses by factoring the value of innovation into the daily operating expenses. The following are the criteria that Zara can use to choose between the above alternatives.

• Usability
• the alternative considered should accomplish a practical need, and it should be utilitarian. Therefore, it will meet specific market demands and answer particular questions.
• Profitability
• leaders in Zara Company should also consider the revenue opportunity and the dissemination potential of the alternatives.
• Integration
• the alternative should be fully integrated with the overall strategies of the organization. The other options are lovely in their own right. However, the outliers of the organizational strategy may not acquire the support of the organization to withstand the feasibility of the effort.
• Scalability
• the alternative should have the capability to be scaled. Also, it should meet uniform standards, duplicated with steadiness, and be replicated in a manner that can be reproduced without continually being adjusted or reinvented.

Alternative Analysis

• Eating microbes of polyester
• polyester is the new commonly used material, and this alternative will meet the particular market demands, hence usability. Also, the choice ensures profitability as it reduces the cost of production. Scalability is possible with this alternative. However, the option cannot be integrated with the organizational strategies.
• Fabric from algae
• the alternative is profitable since low costs are involved in the production. Usability is not possible with this alternative, and it cannot be integrated with the organizational structure of Zara Company. Also, scalability is impossible.
• Cotton turned into new clothes
• eliminating wastage of material, and the costs of developing new cotton, the total cost of producing the garments is reduced. Therefore, the revenue opportunity will increase. Moreover, this alternative will meet the market needs hence usability. Integration with the organizational strategy is possible. Nevertheless, scalability is not possible since it does not meet consistent standards. Also, duplication will not be with steadiness, and the replication will need continuous adjustment and reinvention.
• A database to track unused fabric on the floor of a factory
• this involves the utilization of remaining raw materials, and it ensures maximum use of the raw material; hence, it is profitable. It can be integrated with the company’s organizational strategy. However, it does not meet consistent standards, cannot be duplicated with steadiness. Also, its reproduction involves continuous adjustment and reinvention. Therefore, it cannot be scaled.

Recommendation[RL1]

Clothing businesses fall under the category of open markets. In the quest to maintain stability in the clothing business, many players have found it unbearable, thus leaving the arena. Others are striving to settle in the market as new beginners despite those who have made their way out. There are challenges, and competition is also present since some players are innovative while others are not. Automation is slowly covering up to satisfy the needs of the upcoming age, which full of technology. Innovators, as well as manufacturers, have been pushed to adopt automation. Since their chief goal is to attain success and attainment of goals. Zara serves a considerable consumer population since it is an internationally known clothing line. Other individuals running various companies have slowly developed a lousy tendency that involves the replication of other manufacturing organizations concerning output processes.

The companies are resolving to copy others in a quest to maintain sustainability in their business operations. At times, Zara affords to risk chances since it is known as the top-end brand. Additionally, Zara allows its fashion house premises to be occupied by other related companies in carrying out their daily business operations. Zara also offers a chance for other companies to learn from them how they receive orders as well as how they forward these orders; thus, becoming a severe threat. Quality remains to be on top. Customer satisfaction is very vital. Flexibility should be enhanced through the creation of various networks into smaller workshops. Since design activities have become the primary trend, I would recommend Zara to do a double improvement and emphasis on the same.

Action and Implementation Plan

For Zara to attain higher sustainability, a suitable direction needs to be opted for through; expanding goals in a transparent manner, promoting community development, increasing telecommunication channels, and lastly, sustaining the quality of designers.

Clear Expansion Goals

Clear expansion goals: where businesses are earning enough revenue and running well in the competition, the upward range is to expand the business to meet increasing demand and to fit company goals to serve an extensive and diverse market. When coming up with expansion goals, institutions need clearly outlined objectives, which can be scaled to ensure optimum exploitation of resource endowment and capital investment. If a vertical expansion is not possible, then parallel development may be necessary. Where vertical expansion interprets to having more premises, horizontal expansion relates to increasing the number of employees (Ghemawat et al., 2003).

Community Development

Every business is required to give back to society. Shareholders and stakeholders are tasked with the responsibility to ensure that the locals are provided with opportunities. Therefore, they improve their livelihood and raise the standards of living. By investing in the community, I likely to gain more client loyalty or access production materials at affordable rates.

Sustaining Designer Quality and Telecommunication Channels:

Because communication is paramount, the institution should ensure to be served by an upgraded system to continue to meet the challenges of the telecommunication world. Without proper channels, communication breakdown can cause massive business losses (Zadek, & McGillivray, 2008).

References

Ghemawat, P., Nueno, J. L., & Dailey, M. (2003). ZARA: Fast fashion (Vol. 1). Boston, MA: Harvard Business School. https://s3.amazonaws.com/academia.edu.documents/55643141/Caso_Zara__Fast_Fashion.pdf?response-content-disposition=inline%3B%20filename%3DZARA_Fast_Fashion.pdf&X-Amz-Algorithm

Lüdeke-Freund, F. (2010). Towards a conceptual framework of business models for sustainability’. Knowledge collaboration & learning for sustainable innovation, R. Wever, J. Quist, A. Tukker, J. Woudstra, F. Boons, N. Beute, eds., Delft.https://poseidon01.ssrn.com/delivery.php?ID

Tungate, M. (2008). Fashion brands: branding style from Armani to Zara. Kogan Page Publishers. https://books.google.co.ke/books?hl=en&lr=&id=4Dy8DdgoC9sC&oi=fnd&pg=PP2&dq=Zara+fashion&ots

Zadek, S., & McGillivray, A. (2008). Accountability present.Responsible competitiveness: making sustainability count in global markets. Harvard international review, 30(2), 72. https://search.proquest.com/openview/0362994fba7931de32a2159580f69963/1?pq-origsite=gscholar&cbl=32013

[RL1]Please see examples of papers in the module on critical decision criteria. It should help you determine 3-5 key decision criteria….or those things, and you will compare your alternatives against them.