Introduction - Implementing Innovation and Change in Zara
Innovation has become an integral part of the contemporary commercial world which cannot be avoided if sustainable profitability and market resilience are desired. Companies have adapted innovative approaches to suit their corporate goals and also to serve the community with responsible approaches. The present report will explain a comprehensive discourse on innovation and how the relevance is established, similarly providing a proper application of innovative methods in practical corporate contexts to justify those.
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This subject uncovered a wide variety of concepts that contribute to my understanding of the relevance and feasibility of sustainability throughout the enterprise. Owingto this experience, I was able to identifyelements that are fundamental to a company’s innovation procedure. Companies increasingly are relying on innovation strategies for better adaptation of these innovative approaches for achieving sustainability norms and standards. Businesses need to engage in sustainable innovation if they want to increase their revenue, broaden their market share, and gain a competitive advantage over their rivals. From my comprehension so far of the trends and patterns of sustainable corporate strategy, good corporate governance may help make innovation a resilient phenomenon. Companies cannot waste time, money, and human resources on failed innovations and they are focusing on the design of the most sustainable ideas to boost their existing practice potential (Danso et al., 2019). Successfully capitalizing on innovative ideas is essential for any company that wants to streamline its operations, provide advancedcommodities and services to the market, boost its productivity, and ultimately grow its bottom line. Markets,whether regional, provincial, nationwide, or international have grown increasingly competitive.
The proliferation of cutting-edge tools and the ease with which people may now engage in cross-border commerce and disseminate information online have all contributed to a heightened level of competition. Sustainable development is necessary and cannot be replaced. Companies are motivated to adopt sustainable approaches to not only boost their potential impact on the environment, people and economy but also to enhance their market relevance and brand reputation as well. UN’s sustainable development goals have prompted the companies with their extended frameworks. Companies are driven by the business as well as the environmental criteria (Danso et al., 2019). Businesses are attempting to design their strategies in a way that avoids any environmental or social harm by intentionally changing their products, services, and operations. While innovation and sustainability thinking are boosting the current practices, there is another aspect that regulates the corporate adaptability, change process, and management of the transformative phase. This requires intense planning, team management, and constant integration of creative thinking and application of skills.
Based on my learning from this module, I have acquired that there has been a dramatic transition in the previous several decades, from the Industrial Revolution to the innovation and rapid transitionary revolution in information and technology. By using design thinking, businesses may better comprehend their clients, meet their needs, meet industry standards, recognize problems, reframe those problems, and develop and execute solutions. I have built my understanding of the four separate models based on a set of models and their detailed explanations provided in the module.
Double Diamond Model: The double-diamond framework helped me see that innovative ideas flourish in corporate settings and that the process of changing one’s way of thinking to new circumstances requires a clear plan of action (Gustafsson, 2019). From generating the ideas, following the filtration to putting it to test and implementation is the core practices that enhance the potential of an innovative idea. However, I think that companies need to inspire the workplace by injecting a sense of responsibility among the employees. the authority must encourage employees to initiate innovative projects and execute those while keeping individual as well as corporate goals in mind. It is also essential for leaders to evaluate their employees in terms of their understanding, risk-taking approach, potential to adopt uncertain situations, and non-conformity.
Ten Types of Innovation: Although the standards of innovation and methods of implementation vary, a significant aspect is a conceivable angle which is the realm of originality. The scope of innovation has expanded in 10 distinct directions beyond goods and services. I was able to analyze factors owing to my extensive reading and research: “profit model”; “network”; “structure”; “process”; “product performance”; “product system”; “service”; “channel”; “branding”; and “customer engagement”. All these areas are prioritized by contemporary companies to find breakthrough solutions. From the theoretical perspective, the approach to innovation is different and is dependent on the mindset. For instance, the innovation journey describes the phases of the discovery and implementation of innovative ideas. Searching, exploring, committing, realizing,g and optimizing, are the initial phases that lead to a complete innovation and application.
Organizational Ambidexterity: From the organizational ambidexterity matrix, I have understood the four types of innovative mindsets that contribute to an exceptional new idea and the appropriate implementation of that idea into practical functionality (Bui et al., 2021). Exploration and exploitation are the two factors that accommodate this theory. Some individuals explore ideas but they do not exploit the resources to make new adjustments and establish new phenomena. On the contrary, some exploit the resources without exploring new ideas. Similarly, some are bound to their limitations and do not explore or exploit them. However, there is a third type that not only explores but also exploits the resources to support the explored ideas to convert them to concrete innovation.
Theory U: In terms of the awareness that brings about a change, these theories create the foundation of an innovative approach, however, “theory U” provides a significant outlook regarding how innovative thinking can be realized by changing the way people perceive the conventional and reject the unconventional attributes. Theory U advocates transitioning from a personalized, individual-centered strategy to a broad, group-centered one in terms of developing toward a more sustainable, healthier living. They advocate for “eco-system awareness” to foster forms of collaboration in societies. Scharmer alludes to this procedure as the “journey of the U” (Nullens, 2019). The left half of the U-model represents progress away from rigid beliefs and biases. A time of stillness and introspection, or “presencing,” is required at the base of the U, between the release of the past and the preparation for the emergence of the future. The upward segment is seen on the right. Here, people relax and open themselves to the universe for guidance in discovering who they are and how they may best work with others to improve the world. Additionally, the case study studied in the module has impacted my ideas regarding sustainability and innovation in the area significant way.
The case study of Zara has provided a broad range of insights which has influenced my knowledge of this criterion. Zara has adopted a set of approaches to increase its sustainability value. Through the case study, I could understand how the company has made significant changes in its products by partnering with innovative technology partners and creating a new product portfolio to boost its efforts to reduce its environmental footprint. From these evaluations, I have discovered a wider perspective and convictions that drive individuals to explore and refine their ideas to initiate an all-new method, without any restraints of past conventions. I have come across a set of theories that provide comparable methods and approaches that inspire people to adopt innovative thinking. This will allow me to understand corporate vision regarding innovative practices and how they may approach their workforce to foster enhanced enthusiasm to innovate and facilitate a smooth change process which will promptly drive sustainable innovation.
2. Case Study Analysis and Theoretical Application on Zara
2.1 Case Study Rationale
Zara is among the most well-known worldwide companies, and it has expanded its business to serve a large number of customers from different age groups. The company has become a major player in the fast-fashion industry(Jha and Veeramani, 2021). Since launching the Join Life initiative, Zara has been making strides to enhance the brand’s green credibility (Sitaro, 2020). It is an approach that helps the business have its strategies certified according to environmental requirements. There will be a product line, and the company is committed to doing good for the planet and its citizens. The sustainability report given by Inditex, the parent company of the fast fashion label Zara, said that all of Zara’s clothing will be made from sustainable materials by the year 2025. By 2025, Inditex plans to only source cotton, linen, and polyester that are either organic, more environmentally friendly, or recyclable (Chowdhury et al., 2021).
Using the slogan “Working towards sustainability,” Zara highlights its most significant programs, such as those with a political motivation, those that combine social and ecological resilience, and those that ensure the health and safety of its products. The Join Life initiative ensures that all production methods and materials utilized are environmentally friendly (Chowdhury et al., 2021). The company’s new goal is to have half of its products “Join Life” compatible by the end of 2022-2023. The business reuses and recycles items like bags, hangers, and alarms that would otherwise be thrown away (Tokés, 2022).
2.2 Theoretical Justification through the Ten Types of Innovation
Product Performance focused innovation
In alignment with the company’s ambition to fuel its sustainable approaches, the brand has collaborated with “Evrnu”. When considering the “ten types of innovation theory”, Zara’s collaboration with “Evrnu” is a type of “Product Performance focused innovation” (Boyle et al., 2022). In terms of the product or service itself, companies have the potential to improve in terms of performance (Kouhihabibi, 2022). When most people use the term “innovation,” this is what they have in mind. Simply said, this implies enhancing the product’s value-creation potential. That is, not only adding new features, but also enhancing existing ones, such as the product’s quality, pricing, safety, convenience of use, or sustainability features.
Improving a product’s performance is an evident but challenging kind of innovation, and without a company-wide commitment to constant technological innovation, the benefits may be short-lived (Schemes, n.d). Zara has therefore attempted to improve its clothing items to ensure that the quality of the product is enhanced while increasing its value in terms of its sustainability. Zara has been working on sustainable materials so that their a negative environmental impact.
The Inditex Sustainability Innovation Hub is an open innovation platform, and the Zara x Evrnu partnership is a component of it. The hub’s objective is to bring together startup companies to advertise and extend projects that generate new resources, innovative techniques, and procedures that reduce the environmental impact of the fashion industry (Safaya, 2022). Two oversized collared shirts and a pair of wide-leg trousers are included in this line, which is presently available on Zara.com and in select Zara shops worldwide. Two oversized collared shirts and a pair of wide-leg trousers are included in this line, which is presently available on Zara.com and in select Zara shops worldwide. With its circular fibers, Evrnu provides a method for Zarato to lessen its reliance on unsustainable sources of raw materials and the trash that results from processing them (Safaya, 2022).
Commercialization of its products will continue via the business’s cooperation with Zara and other fashion companies, the company said, adding that it is actively expanding its facilities and operations to satisfy the rising demand for NuCycl Lyocell (Kouhihabibi, 2022). Zara, owned by Inditex, partnered with Ananas Anam in the second half of August to release a line of trainers, sandals, and accessories crafted from Pinatex, a material derived from pineapples. Recently, Inditex said that it had collaborated with chemicals supplier BASF to create what it claims is the first detergent to limit microfiber discharge from fabrics while laundry (Schemes, n.d).
Profit model innovation
The profit model innovation is applied to Zara’s context since they have creatively designed their processes and approaches to minimize excessive operating costs while ensuring constant revenue streaming to boost profitability. With annual sales of over 450 million items, Zara can generate profits via economies of scale. Zara has over 1700 outlets in 86+ countries. Timely manufacturing and shipping allow for timely delivery. The brand focuses on the customer experience and premium pricing that enhances the brand’s distinctness from others. It is capitalized to gain a better margin over the cost charged and further increases profitability. When it comes to a specific design, Zara adheres to the philosophy of producing fewer items (Chunling, 2020).
By doing so, Zara not only limits its reliance on any one commodity but also creates a false scarcity of that product. All pieces of clothing operate on the same premise. A commodity’s value increases in direct proportion to its scarcity (Chunling, 2020). When production runs are smaller, it’s easier to get rid of unsold stock if a particular design fails to catch on with consumers. Zara doesn’t conduct any kind of marketing or endorsement. Instead of reinvesting profits into existing operations, it prioritizes expanding into new locations. Amancio, the company’s creator, has never promoted or discussed Zara in the media. Where people value and seek out the brand, above and beyond the advantages of the product itself, is where the brand succeeds. Zara’s marketing approach relies heavily on the store’s physical layout and in-store presentation.
Brand extension refers to the release of a new product line that depends on the success of an existing brand’s image and market preference. For the brand extension to be successful, the new product must be easily distinguishable from the rest of the product line offered by a company. Zara’s line of bridal gowns has a new: Zara Wedding. In this new division of the company, future brides may tailor their dream wedding gowns with the help of expert designers and stylists who will help the individual to customize the preferred design (Marsasi and Yuanita, 2023). The brand will also extend its service to recommend to the bride the accessories she is supposed to carry on her wedding day. Zara Wedding will collaborate with other trendy companies to make this a reality. Women with moderate resources will be able to put together their dream wedding day look (dress, shoes, jewelry, handbag, cosmetics, etc.) without spending a fortune on these.
2.3 Potential Challenges for Zara
On the evaluation of these two approaches, no barriers to such approaches have been identified which could deteriorate the potential of these strategies. However, Zara’s environmental policy has been criticized for being ambiguous. Their manufacturing methods and the number of supplies used are kept secret. This makes it hard to evaluate the potential effectiveness of their environmental initiatives. There is public documentation or information available regarding Zara’s parent firm. However, the majority of Zara’s web content refers visitors to Inditex, the firm’s parent. Although this is not necessarily a drawback, it might make it difficult to locate Zara-specific content on the Inditex website (Jiang, 2022). Yet, neither the audit findings nor a comprehensive list of the company’s manufacturing facilities is made accessible to the general public. Thus, if Zara wants to perform on their sustainability criteria, it should focus on data transparency regarding its sustainability prospects.
3. Implementation of Change in the Selected Organisation
3.1 Overview of the Global Market Trend and the Selected Company
As a result of the slow pace at which the traditional clothes business could adapt to the changing tastes of consumers, fast fashion has gained ground at the expense of exquisite couture. Overproduction in the garment business and the need for aesthetics, craftsmanship, shipping, and pace immediacy to market are largely liable for the rise of fast fashion. Fast fashion is gaining popularity in the fashion industry, especially in the apparel sector, due to its rapid representation of fashion trends, rapid responsiveness to customer demand, and affordability (Zhu, 2022). This has attracted the attention of several major international brands, including Zara. Zara has tailored its appeal collection to shoppers of all ages, sexes, and ethnicities; nevertheless, the design and style of its product line presented in brick-and-mortar shops are not restricted by local fashion trends (Yin, 2022).
Rather, a design that takes into account worldwide trends ismore varied and original. Zara’s ability to provide its customers with limitations in the rapidly evolving new mix of collection lines contributes to the company’s image as a forward-thinking, fashionable, and very on-trend retailer. From 2016 to 2022, Zara’s global brand worth is shown below. The Zara was estimated to be worth almost $13 billion in 2022. In 2019, the brand was estimated to be worth over $18.4 billion.
3.2 Intended Innovative Approach
Zara is one of the most popular global brands, the company has a strong commitment towards sustainability and progress towards a circular economy through relevant and innovative approaches. the ambition is to reduce the environmental impact throughout the product lifecycle. Sustainability Innovation Hub is the one approach adopted by Zara that has allowed the company to expand their sustainable approach through an optimized method. It is an open innovation platform, which is a foundational reference that supports Zara’s respectful commitment to the planet. Through this platform, Zara has been collaborating with new startups, organizations operating in relevant industries and innovators who are working on a suitable solution to boost fruitful discourses toward sustainability (Esbeih et al., 2021). Via this platform, the company is constantly seeking new and revolutionary approaches to production, raw materials, and resources, including fiber. The focus is kept on maximizing the application of cutting-edge technologies to innovate processes, materials, and end-of-life-cycle utility to maximize product value while maintaining environmental resilience.
For instance, most of the amazing results in these areas have been achieved in 2021, LanzaTech is such an initiative that emphasizes research into raw materials. However, they haven’t limited their technical development to the realm of Operations. Recent innovations in data management systems, including advances in technology, the progression of new tools and methods for gathering data, and innovative approaches to data storage and evaluation, allow them to make informed decisions in light of data that is constantly being upgraded on a global scale. When comparing their ability to innovate for the environment, their Data Processing Centre (DPC) stands as an unrivaled standard above the competition. The energy efficiency of the new DPC has been improved because of the technology that was implemented there. By establishing criteria for the durability and recyclability of their package, Green to Pack is an initiative grounded on the principles of the circular economy. The Green to Pack Program encourages the usage of reused packaging for purchases via the Internet in addition to improved quality and recycling criteria (Inditex, 2023). All online orders from Zara are packaged in recyclable cardboard containers, among which 50% are repurposed from previous deliveries.
Considering Zara’s commitment to sustainability and its growing investment in sustainable innovations, another aspect can be suggested for Zara that will revolutionize its approach to sustainability. Zara should make an innovative shift towards new materials for packaging that are resilient and also will provide scope to be consistent in its revenue generation. Biobased packing is manufactured from renewable substances that come from the earth in a particular manner. Wood fiber paper is one instance, as is bio-PE plastic, which is derived from sugar cane (Fernández et al., 2023). Peptic is the breakthrough packaging component derived from renewable resources that is biobased, recyclable, reusable, and biodegradable. Peptic compounds are non-hazardous and may be used in a variety of packaging settings (Luxiders Magazine, 2023). A new heat-sealable fiber-based material called Paptic provides an eco-friendly, high-quality option for product packaging. Peptic may be used as a direct substitution for plastic in the packaging of dry goods. Plastic material may be used as a viable alternative to plastics. The innovative sustainable plastic-free e-commerce packaging method for e-commerce mailers outperforms conventional cardboard and options (Fernández et al., 2023).
Zara should aim to introduce Papic-based packaging to improve their approaches and achieve sustainability on a larger scale by minimizing plastic disposal on the planet. This sustainability approach will also allow the company to enhance its brand reputation and draw more customers which will directly influence its revenue growth. Although this will disrupt the industry and lead Zara as the pioneer in this revolution, the adaptation process will not be convenient and there will be bottlenecks to look for and create a better strategy to cope with. In Order to adapt to this new change, the brand will have to focus on its human resources who are the first pillars to support and push the innovative approach towards a progressive scale.
3.3 Change Implementation in Zara
ADKAR Model Application
Awareness: incurring a change requires a strong and substantial plan. The strategic principles and ideas surrounding the change need to be proposed to the core members who are supposed to propel this transformation. For Zara, driving change will not be possible unless it ensures that its employees are well aware of this new initiative and are communicated with before advancing with this approach (Hamdo, 2021). Making such a big shift will require a complete overhaul of the existing processes and approaches, thus, to navigate through this change will need to enhance their awareness. They must convey the strategic activities and probable implications of the change.
Desire: The employees must be encouraged to realize this approach by initiating awareness and practicality of this strategy (Hamdo, 2021). They must feel the need to adapt to such an innovation before practically implementing the strategy in the operational process. Every unit from designing to the product development and shipment workforce must have a change leader who will supervise the initiative and increase enthusiasm to realize the initiative.
Knowledge: Zara will have to optimize its knowledge and training methods to create a better and more integrated circle that enables the employees to know more about the desired change so that they can participate. Especially, introduction and detailed knowledge of the Paptic products can be a starting point to ensure that the relevant department is obligated to facilitate and accomplish packaging procedure through sourcing material to producing packages Bekmukhambetova, A., 2021.
Ability: Zara should enable its operational force to gain enough skills and knowledge about this issue by equipping them with relevant approaches.
Reinforcement: in order to successfully implement the change and sustain this ground-breaking initiative, Zara should constantly reinforce their change mechanism through assessment of the positive implications of the initiatives and reports on brand reputation to influence their mentality towards this change.
Conclusion
The three distinct sections of the report have unfolded a set of ideas which have been supported with rational and appropriate exemplification in multiple contexts. The report aimed at understanding the concept of innovation and how different innovation approaches are applied in Zara while also suggesting the probable innovation in their customizability practices through appropriate change management approaches.
Executive Summary Report
The contemporary world is driven by constant and progressive innovations that guide the processes and revolutionize the paradigms relevant to the business context. The present macro-environment and industrial circumstances have hugely been transformed since the emergence of new technologies and creative approaches to doing things. Businesses have adapted breakthrough technologies and designed some of the best practices that not only facilitate their corporate agendas but also transform the community at large by serving the core areas that are often neglected. The general awareness of the environment and how resilience can be brought about are studied by people and this has empowered society to raise questions and have their preferences regarding which companies to trust in terms of their ecological commitment and responsible approaches. Businesses cannot ignore the importance of innovative adaptation of sustainable practices since they know that customers have now the ability to make more informed choices and they often prioritize those brands that constantly dedicate themselves to making a shift in the conventional initiatives to improve environmental accountability. They want to associate with brands that have transparency regarding their approaches and how they are catering to the community through extensive initiatives and processes. Brands that put investments and efforts into curating resilient solutions to ecological concerns are more preferred and accepted by their intended market, this expands the corporate scope of profitability and brand reputation. When a corporation makes improvements to its products, services, or operations to provide prolonged social and environmental advantages in addition to economic rewards, they are engaging in sustainable innovation.
Although the concept has been widely recognized and popularized in recent years, there are several intricacies and sophisticated reasoning that drive this fundamental phenomenon. In order to understand this concept, in the first part of the report, a thorough reflective account has been provided on behalf of a self that recognizes a set of ideas that are underpinned by convictions and underlying logical justifications derived from various theories. From this reflective part, a succinct comprehension could be derived since it has explored a set of models and theories that provide a consensus on how innovation can be explained. This part has informed on the UN’s Sustainable Development Goals which has set the parameters for businesses to enhance their practices accordingly to suit the set requirement standards. The SDGs provoke innovation and encourage corporates to understand the processes, decode the existing applicability, and re-think these concepts to bring about change in a favourable manner.
Corporations now focus on developing and integrating new ideas and realize the relevance of design thinking that enhances that shared knowledge pool to incorporate diversified concepts and eventually refine those to cultivate cutting-edge practices. It is identified that design thinking requires a set of skills and their appropriate application to fuel realistic changes and reduce the gap between ideation and practical implementations. From the double diamond model, it is conceptualized that workforces must be exposed to scopes to think, refine, and implicate creativity which delivers a sense of collective knowledge adaption and application. The ten types of innovation have given a brief yet pragmatic idea about how businesses can alter their approaches to align their feasibility while meeting their innovation needs. These innovations offer a multi-dimensional criterion that can be adjusted and eventually used favorably by a corporation. Search, exploration, commitment, realization, and optimization lead to innovation. Similarly, the ambidexterity model lays forth the idea of how the consistent exploration of ideas and exploitation of resources can contribute to significant innovation ideas. One must not limit oneself to only opting for one among these two aspects but rather create an equilibrium to facilitate each other to achieve greater value. The “theory U” has given an insight into how the transition from the past conventions towards the prospective newness must be fostered through an intermediary phase of introspection and immobility. This process allows individuals to realize the value of past practices while also absorbing contemporary visions to transform seamlessly through time and inventions.
In the second part, an elaborate case study reading and rationale of Zara has allowed for a better comprehension of the company and how it has been shifting through the phases through practical and attainable innovations. Zara has created a legacy in the fast fashion industry by boosting its innovation strategy, although it has been criticized often for its lack of transparency regarding its sustainable practices, still, the corporation has gained constant preference and equal relevance through its business model innovation and constant alterations focusing on its customers. The company has adopted several approaches to show its dedication towards suitable approaches through initiatives like the Sustainability Innovation Hub and also has mastered its capacity to integrate innovations through ground-breaking partnerships with sophisticated companies which facilitate the brand to realize its vision through inventive practices. Zara has revolutionized three areas of innovation, product performance innovation, profit model innovation and brand innovation. Via the strategic partnership, Zara has been able to introduce a sustainable product line, by limiting the overproduction of specific items, it has driven scarcity which increased demand and profitability, and by introducing a new bridal wear collection category to the original brand, Zara could extend its branding profile.
In the last and final part of the report, a strategic innovation plan has been applied to the case context of Zara which can develop a futuristic path for the brand to increase its value and potential to improve its ecological impact. A completely new material adaptation has been suggested as a strategic means for the brand which will reduce the usage of plastic in its product packaging range and will eventually lead to less plastic disposal on the planet. Especially Zara will be able to contribute to society by encouraging innovative materials and will pioneer the resilient approach to shift among the industry making the brand a responsible market leader. The integration of Paptic material is suggested for the brand to implement in its product packaging process since the product packages are thrown away in the soil, shifting to this ecologically safe material will enhance its potential to promote this element further and leave a better impression across the civil society.
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