businessmodel innovation

7/17/2019 BusinessModel Innovation

1/58

INSEAD p 1

Business Model Innovation

M&S vs ZARA

Gest D201 Case

Sp!in" 200#

$!o% 'udo (an de! )e*den

INSEAD+ ,ontaine-leau & Sin"apo!e


2/58

INSEAD p 2

Co.petin" in Business Models/M&S vs ZARA

B!ie% int!odution to %asion indust!* Business pu!pose

Custo.e! se".ent Custo.e! o%%e! Suppl* p!oess

$e!%o!.ane Co!e o.petenes & o!"ani3ationalst!utu!e

ZARA in te -usiness .odel .at!i4 Conlusions & ta5e6a7a*s


3/58

INSEAD p 8


9e %asion indust!*/ 7aste & tei.possi-ilit* o% pe!%et %o!easts


4/58

INSEAD p

:* is p!o%ita-ilit* in te4tile so lo7+7en .a!"ins a!e so i"

Atual

De.and

$ossi-ilit* o%e4ess sto5even 7it lo7de.and

$ossi-ilit* o%e4ess de.andeven 7it i"

de.and

E4petedDe.and

$e!%et %o!eastsdo not exist in real life!


5/58

INSEAD p ;

Classi te4tile Business $!oess/12 .ont lead ti.e

Desi"n M%" Dist Sell$u!aseRa7 Mat Disount


6/58

INSEAD p and usto.e! %lo7s

'o7 ost ,asion

Respond to 7atusto.e!s 7ant !eate a de.and ainCop* t!end* %asion

%astC!eate a sto!ee4pe!ieneC!eate a

net7o!5H-!and


10/58 INSEAD p 10


Brief introduction to fashion industry

Business purpose ?

Customer segment ?

Custo.e! o%%e!


11/58 INSEAD p 11

ZARA Custo.e! %%e!

Se!vie o.pan* / sans and selets

ne7 %asion+ desi"ns+ delive!s and sells

'i.ited va!iet* at an* ti.e9e p!oduts essene is / %!es loo5sDoes te -!and elp


12/58 INSEAD p 12

Za!a Custo.e! %%e!/ a!ate!istis

,!esH,ast Jualit* / 6HK Cost

,ast op*in"% leadin" st*les

,ast delive!*in o7n sto!es

'i.ited editions

Ra7 .ate!ial/ .ediu.

Lnit/ poo!'oo5/ "!and

Custo.e! satis%ation/ %asion at lo7 p!ie

'o7 .oneta!* ost

'o7 ti.e ost/te Za!a e4pe!iene

,le4i-ilit* / 6HK

'i.ited usto.e! va!iet*/ onl* 7at is on displa*

and in li.ited oiesBut eve!* usto.e! is pa!tiipatin"

in te p!oess/

elps dete!.ine te ne4t -at


13/58 INSEAD p 18



Business purpose ?

Customer segment ?

Customer offer ?

Suppl* p!oess


14/58 INSEAD p 1

Classi te4tile desi"n p!oess/

C!eative

Desi"n

$!eli.ina!*

Desi"ns

,inal

$!odut

Desi"n


15/58 INSEAD p 1;

ZARAdesi"n p!oess/

C!eative

Desi"n

@9S@RCE

and

SCAN

$!eli.ina!*

Desi"ns

C$O

and

SIM$'I,O

,inal

$!odut

Desi"n

ADA$9

and

$9IMIZE


16/58 INSEAD p 1 & desi"ne!s adapt

Step 8/ Desi"ne!s pull ne4t RM -at

ZARA Suppl* $!oess in %ull/; da* lead ti.e!!!


17/58 INSEAD p 1#

Si.pli%* &

desi"n ne7p!odut o%%e!

Step 1/ Dellsans .a!5et &u!!ent o%%e!

Sell

$i5

Co.ps

M%"

=Asse.-l*>

Custo.e!sSelet

Dist

Step 2/ Custo.e!s pull p!odut &suppl* ain adapts

Step 8/Custo.e!s pull RM!esuppl*

Co.psSuppl*

Co.pa!in" 7it Dell Suppl* Cain/2 da* lead ti.e+ -ut no on6line desi"n!


18/58 INSEAD p 1



Business purpose ?

Customer segment ?

Customer offer ?

Supply process ?

$e!%o!.ane


19/58 INSEAD p 1

:* is p!o%ita-ilit* at ZARA so i"+7en .a!"ins a!e so lo7/ value

AtualDe.and

E4ess sto5 and un.etde.and a!e avoided -*stoppin" p!odution

7en .a!5et satu!ates

E4petedDe.and

S.all

-ates

Za!a as a

'eanEnte!p!ise


20/58 INSEAD p 20

:aste eli.ination at ZARA/e4a.ples

Adve!tisin"/eliminated for not necessary in a pull model; too slow anyway and our offer islocalised

Disount Sales/eliminated through quic response the strategy that we are always "#elow$ demand

Desi"n/largely out%sourced to the "maret$ andreplaced #y acti&e scanning ' greatly facilitatesa"process%#ased organisation$

$!odut o.ple4it*/( types) si*es) and coloursgreatly reduces the product complexity) allows us tooperate with reduced in&entories and woring capital '

with little loss in customer &alue


21/58 INSEAD p 21



Business purpose ?

Customer segment ? Customer offer ?

Supply process ?

+erformance ? Co!e o.petenes & o!"ani3ational

st!utu!e


22/58 INSEAD p 22

Co!e o.petenes at ZARA

Sannin"/ fashion trends) maret trends

,ast suppl* ain/ , wee final productioncycle) two day out#ound logistics) fast

adaptation of leading trendsI9 s*ste.s/ li#rary of models) C-./C-0 1

,le4i-le p!odution s*ste./ small and

flexi#le sewing shops in 2alicia


23/58

INSEAD p 28

!"ani3ational St!utu!e at ZARA


24/58

INSEAD p 2



Business purpose ?

Customer segment ? Customer offer ?

Supply process ?

+erformance ? Core competences organi*ational

structure

ZARA in te -usiness .odel .at!i4

ZARA i i i


25/58

INSEAD p 2;

ZARA positionin"/Indust!ialisationStep 1/ standa!disation

Suppl*$!oess

$!odut %%e!

)i" %asion

=Dio!+Canel+ P>

M&S

Mass

.e!ants

Ri"id 'ine%lo7

Manual

sop

Bat%lo7

)i"usto.isation

So.eusto.isation

)i"standa!disation

ZARA iti i


26/58

INSEAD p 2

ZARA M&S

Mass

.e!ants

Ri"id 'ine%lo7

Manual

sop

Bat%lo7

)i"usto.isation

So.eusto.isation

)i"standa!disation

Indust!ialisation/ Step 2


27/58

INSEAD p 2#

Indust!ialisation/ Step 2 St!ate"i value "ained %!o. positionin"

Suppl*$!oess

$!odut%%e!

,le4i-le$!oess

Ri"id

$!oess

)i" usto.isation'o7 volu.e)i" unit .a!"in)i" ?ualit*

)i" %asion/

ut o% p!ie

ZARA

M&S/

ut o%,asion

)i" standa!disation)i" volu.e'o7 unit .a!"in

'o7 ?ualit*

I d t i li ti St 2


28/58

INSEAD p 2

Indust!ialisationStep 2/!ede%inition o% lassi indust!* t!ade6o%%s

Suppl*$!oess

$!odut %%e!

Canel

ZARA M&S

Mass.e!antsContinuous%lo7

Manual

sop

Bat%lo7

)i"usto.isation

Mediu.usto.isation

'o7usto.isation

???


29/58

INSEAD p 2


Brief introduction to fashion industry Business purpose ? Customer segment ? Customer offer ? Supply process ? +erformance ? Core competences organi*ational structure

? 3-4- in the #usiness model matrix

Conlusions & ta5e6a7a*s


30/58

INSEAD p 80

9a5e6a7a* Q1/

ZARA lean ente!p!ise in %asion indust!*


31/58

INSEAD p 81

ZARA vs M&S su..a!i3ed/9e 'ean and ,oused Ent!ep!ise

ZARA/

9)E 'EAN EN9ER$RISE

M&S/

9)E S'@9IN S)$

Clea! ,C@S on one

0usto.e! t*pe & on one

p!o0ess

M@'9I$'E &

SIM@'9ANE@S GA'S

p!o1i-it 0lea! %o0us

@NIJ@E & E$'ICI9

(A'@E p!oposition

M@'9I$'E & IM$'ICI9

(A'@E p!opositionS$REDIC9AB'E & C'EAR

$RCESS to -e i.p!oved

@N$REDIC9AB'E & ,@ZZO/

no p!o0ess to -e i.p!oved

St!ives %o! $ER,EC9IN SA9IS,IED 7it1 !ea01in" a

t1!es1old pe!%o!.an0e

See5s to E'IMINA9E an*

%o!. o% :AS9E

9'ERA9E a 0e!tain a.ount

o% unavoida-le ECESS

Mana"es 0usto.e!

,':S

Rea0ts to 0usto.e!s as a

se?uen0e o% eventsH9ASLS

$@''S 0usto.e!s into t1e

p!o0ess

$@S)ES 0usto.e!s t1!ou"1

t1e s*ste.


32/58

INSEAD p 82

$!oess ,ous su..a!i3ed/9e 'ean Ent!ep!ise %!o. 9o*ota P

9)E 'EAN EN9ER$RISEClea! ,C@S !e/ p!oess %itste usto.e! se".ent=s>

1 C'EAR ,C@S RE/

$RD@C9 & $RCESS

@NIJ@E & E$'ICI9 (A'@E

p!oposition

And on (A'@E

$REDIC9AB'E & C'EAR

$RCESS to -e i.p!oved

2 IM$R(E 9)E

$RCESS

St!ives %o! $ER,EC9IN & E'IMINA9E

See5s to E'IMINA9E an* %o!.

o% :AS9E

:AS9E

Mana"es patient ,':S 8 MANAGE ,':S

$@''S patients into te p!oess & $@''


33/58

INSEAD p 88

9a5e6a7a* Q2/

-usiness .odel li%e *les=and dis!uptive -usiness .odels>

- d l l % l


34/58

INSEAD p 8

S6u!ve/ -usiness .odel li%e *les

I.p!ove.entE%%o!t

Bus Model $e!%o!.ane

$!o-e & lea!n Do.inant desi"n

e.e!"es =ind standa!d>

Co.petition si%tsto p!oess %eatu!es/ost+ ?ualit*+ speed

'i.its toi.p!ove.ent appea!

Matu!it* settles in

D - d l


35/58

INSEAD p 8;

Dis!uptive -usiness .odel an"e/ setup

9i.e

$e!%o!.ane/ M&S ?ualit*=RM+ ut+ %it+ va!iet* P >

:ile usto.e!s an"e/M&S ?ualit* as pe!eived -*

M&S o! ;0K 1


36/58

INSEAD p 8

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