Executive Summary
Entering the context of the online economic environment is fraught with multiple difficulties, mostly due to the need to reconsider an array of internal organizational processes and introducing a flexible system of change management. The case of Zalora, a company, working in the apparel industry, shows that the identified process is likely to become rather problematic and convoluted. To address the issue, the appropriate communication strategy and change management approach must be introduced into the organization.
The goals of the paper include the analysis of Zalora’s current situation, the further identification of problems in its management and leadership frameworks, and the suggestion of possible improvements. Specifically, a combination of qualitative and quantitative analyses will be utilized. The qualitative assessment will help to locate crucial factors affecting Zalora’s progress, whereas the quantitative one will assist in defining the dynamics between the specified variables.
It is strongly recommended to create a system of institutionalized change in the corporate environment within Zalora. As a result, the transfer to the online realm will occur smoothly, and the organization will be able to build a sustainable competitive advantage. Additionally, the firm’s products will require diversification and rebranding. Consequently, Zalora is expected to enjoy impressive popularity among online buyers.
Business Project: Zalora Case Analysis
Introduction
The surge of technological innovations that burst into the realm of the 21st century and entered a huge number of domains has altered the landscape of the global business environment as well. With the advent of innovative IT solutions, the transfer to the digital economic setting has become not desirable but inevitable (Erne 2015). A new generation of customers who have gotten used to performing key activities in the digital setting has emerged. Herein lies the need to cater to the requirements of the people that purchase products in the digital realm.
Despite having made a range of important choices that helped it enter the environment of the digital market, Zalora has also allowed quite a few omissions in the design of its new strategy. For instance, while the company did invest in the redesign of its services required for the transfer to the online environment, few to no changes have been made to the current quality management framework. As a result, Zalora has suffered massive losses, including not only a drop in its profit margins but also a rapid reduction in the levels of customer loyalty and the number of its buyers.
Findings and Discussion
Zalora’s current performance indicates that the organization has not been prepared well for the transfer to the environment of the online market and, thus, cannot cope with the challenges that it poses to the firm. The lack of a clear competitive advantage seems to be the most problematic issue for Zalora at present. While the organization managed to remain economically sustainable in the realm of the offline market, the transfer to the online one seems to have taken the firm entirely out of its comfort zone. As a result, Zalora currently has no characteristics that could set it aside from a massive range of similar companies (Erne 2015). Combined with the lack of experience in operating in the online market, the specified issue makes the organization extraordinarily vulnerable to any activities undertaken by its competitors. Similarly, any economic or financial hindrance occurring on its way needs to be taken into account…
The way in which Zalora uses its technological advantages is also rather questionable. Instead of taking a sensible approach by allocating its technological resources and developing a coherent strategy, Zalora seems to struggle to stay afloat, thus, producing a very little effect and looking quite unflattering compared to its rivals. For example, the company has not created an efficient approach toward managing essential information and making its brand memorable and recognizable among its target population.
After the scrutiny of the company’s quantitative data, one will notice that the current decline in its profit margins correlates with the lack of digital technology use. Even though the organization has decided to transfer its activities into the setting of an online market, it has failed to embrace the entirety of the opportunities that the online economy provides. In fact, Zalora has been experiencing a significant drop in its revenues since it has entered the realm of the online apparel market (Erne 2015). A quantitative assessment of the organization’s performance reveals that it has been failing to meet the expected outcomes so far (see Appendix A). Therefore, there is a strong need to ensure that a new strategy to be employed in the environment of the organization will ultimately lead to a steep rise in the company’s revenues.
The qualitative data provided by Zalora also implies that the organization lacks consistency in the application of digital strategies, as well as a general understanding of the difference between online and offline marketing. Particularly, the fact that staff members display a lack of motivation indicates that they have not been provided with the guidance that is required for employees to adjust to a change in the business environment. In this regard, one should address the problem of leadership and the importance of introducing a strong role model that the staff members can follow (Erne 2015). According to the outcomes of the qualitative analysis conducted in the context of the firm, most employees were quite unaware of the roles that they played in the new corporate environment and the responsibilities that they had in managing the company’s online business processes. For instance, 57% of the employees reported that they were confused as to how their responsibilities were different from the offline context.
Problems with guidelines have also been rather noticeable. Specifically, 29% of the staff members lacked directions, while 31% claimed that they noticed a decline in the quality of their performance. 86% admitted that the organization was facing massive communication issues. Thus, the lack of an effective leadership framework and an insufficient understanding of the changes that must be applied to the organizational setting after the transfer to the online environment can be seen as the key factors that have determined the further development of major issues (see Appendix B).
Conclusion
Zalora has experienced a significant drop in its performance levels after transferring its processes to the online environment due to the absence of a strategy for accommodating its processes to the new environment. Miscommunication that causes confusion about people’s roles and responsibilities, as well as poor dialogue with customers and low-quality levels, are the direct effects of the specified phenomenon. Therefore, the firm must alter its current approach toward communication, leadership, and product branding in order to succeed.
Recommendations
It is strongly recommended that Zalora should improve the quality of its data management system. Particularly, the organization should pay especially close attention to the issue of information security. Despite the increasing efficacy of tools for addressing online safety concerns, malware and other means of obtaining companies’ and customers’ data illegally are becoming more elaborate and sophisticated as well.
The problems associated with the communication approach deployed at Zalora are also quite evident. After transferring its activities into the realm of the online environment, the firm should have reinforced the dialogue with its buyers. The lack of a well-developed approach to communication made it impossible for the company to appeal to its target demographic, which led to Zalora losing money. Thus, the organization should consider revisiting its communication strategy (Cheema 2017). The company must process the feedback received from customers to improve the quality of services and make sure that clients’ needs are thoroughly addressed. Zalora’s managers can accomplish the specified step by conducting online surveys and using questionnaires as the tools for retrieving essential information from buyers.
Moreover, the rapid loss of customers can be attributed to the lack of a coherent model for managing communication with buyers and a marketing strategy that could target new audiences. Correspondingly, an update in the existing approach toward marketing is required. Zalora will have to redesign its framework for catering to the needs of its target demographic. Specifically, the tools that the organization uses to market its products to the target audiences need to be revisited. For instance, the use of blogging needs to be prioritized as the most effective strategy for attracting the attention of Zalora’s potential buyers. The application of blogging should also be seen as a part of the company’s marketing. By including blogging in its list of marketing approaches, Zalora will have higher chances of being found online by its potential customers.
Zalora’s IT team will have to focus on creating a set of applications for mobile devices for customers to use when browsing for products, selecting specific items, and ordering them for further delivery (Cheema 2017). The identified step will improve the usability of the company’s services and will help it gain the attention of the intended audience, which includes Millennials.
Furthermore, Zalora will have to focus on maintaining the levels of product quality high. The specified change will have to be implemented after the organization decides which brand it is going to promote to its target audiences in the realm of the online market. As soon as the apparel product is defined, a set of quality standards for the company to meet will have to be designed. However, apart from reconsidering the existing quality concepts and setting the bar higher, the firm must also institutionalize change so that it could retain its competitive advantage and remain efficient in the global market (Cheema 2017). Put differently, Zalora will have to deploy the principles of the Six Sigma framework into its workplace environment.
By definition, the suggested approach implies that the idea of continuous change is implanted into the body of an organization as an essential constituent of its corporate philosophy and values set (Pyzdek & Keller 2014). Particularly, the application of the DMAIC (Define, Measure, Analyze, Improve, and Control) tool will have to be used to promote change since Zalora does not intend to create an entirely new product but is going to rebrand the current one (see Appendix C). For this purpose, the organization should use a better thought-out customer segmentation strategy (Erne 2015). For instance, at present, Zalora seems to be targeting the generation of Millennials, who use modern media actively and tend to make purchases online, yet the tools that the organization uses to increase its sales and promote the product could use a significant improvement.
Reflection
The recent technological breakthrough and the increased pace of digitalization, which takes place at all levels of interactions from business-related to personal ones, define the strategies used by companies. However, entering the digital market without giving it enough thought is likely to lead to economically devastating outcomes for any company, Zalora representing the identified phenomenon. The case under analysis served as a perfect example of why communication and adequate use of technological innovations, as well as good leadership and institutionalized change, are essential for the functioning of an organization.
The case in question thus can be seen as a graphic example of how important detailed analysis of external factors and unique characteristics of target audiences is. For instance, the company has clearly failed to develop an appropriate strategy for meeting the needs of its new customers. While realizing that entering the online environment is an important step for an apparel organization, Zalora failed to recognize the unique properties of the market and its buyers, particularly, Millennials. The resulting loss of its revenue streak and the development of massive communication issues shows that maintaining the dialogue with every stakeholder is essential for a firm that operates in the global economy.
Moreover, Zalora’s case has also proven that building a competitive advantage is a crucial step that must not be overlooked at all costs. Without a clear strategy for attracting its target audiences and failing to stand out from the rest of the firms operating in the global apparel industry, Zalora became quickly lost in the market and experienced a range of complications. The specified outcome indicates that a detailed assessment of key competitors and the focus on creating a unique product that would become instantly memorable and easily recognizable is a challenging yet essential task. Without a unique feature that would keep customers attracted to the company’s product despite its flaws, Zalora would have a fighting chance in the environment of the global economy. However, the firm has been neglecting a thorough analysis of the market and the key competitors, thus limiting its opportunities and creating a rift in its relationships with customers.
The significance of developing at least a general understanding of target customers’ needs is another lesson that has been learned from analyzing the case. While the specified idea might seem evident, Zalora showed a profound lack of awareness about the needs of its customers. Since Zalora’s managers are under the delusion of offline and online customers sharing the same characteristics and traits, the company cannot meet its buyers’ requirements. The outcomes of the analysis, however, have shown that the behaviors of online buyers are significantly different from those of offline ones. Therefore, the case should be used as the platform for designing an improved communication strategy and an enhanced leadership framework for transferring organizations to the context of the online market. As a result, organizations will retain their competitiveness and cater to the needs of new customers successfully.
Reference List
Erne, R 2015, ‘Change management revised,’ in A Goksoy (ed), Organizational change management strategies in modern business, IGI Global, New York, NY, pp. 1-23.
Pyzdek, T & Keller, P 2014, The Six Sigma handbook, 4th and, McGraw-Hill Education, New York, NY.
Cheema, T 2017, ‘Fast fashion meets social networking users: implications for international marketing strategy, in Wilson, Q & Azemi, Y, Digital marketing strategies for fashion and luxury brands, IGI Global, New York, NY, pp. 62-88.