DOCUMENTATION

Documentation is a set of documents provided on paper, or online, or on digital or analog media, such as audio tape or CDs. Example are user guides, white papers, on-line help, quick-reference guides. It is becoming less common to see paper (hard-copy) documentation. Documentation is distributed via websites, software products, and other on-line applications. Professionals educated in this field are termed documentalists. This field changed its name to information science in 1968, but some uses of the term documentation still exists and there have been efforts to reintroduce the term documentation as a field of study. Principles for producing documentation While associated ISO standards are not easily available publicly, a guide from other sources for this topic may serve the purpose David Berger has provided several principles of document writing, regarding the terms used, procedure numbering and even lengths of sentences, etc.

Guidelines The following is a list of guides dealing with each specific field and type:

documentation in health care thesis writing papers for academic journal publishing (i.e. Journal of Food Science and Analytical Chemistry)

Procedures and techniques The procedures of documentation vary from one sector, or one type, to another. In general, these may involve document drafting, formatting, submitting, reviewing, approving, distributing, repositing and tracking, etc., and are convened by associated SOPs in a regulatory industry Producing documentation Technical writers and corporate communicators are

professionals whose field and work is documentation. Ideally, technical writers have a background in both the subject matter and also in writing and managing content (information architecture). Technical writers more commonly collaborate with subject matter experts (SMEs), such as engineers, medical professionals, or other types of clients to define and then create

content

(documentation)

that

meets

the

user's

needs.

Corporate communications includes other types of written documentation that is required for most companies. Specializing documentation

Marketing Communications (MarCom): MarCom writers endeavor to convey the company's value proposition through a variety of print, electronic, and social media. This area of corporate writing is often engaged in responding to proposals. Technical Communication (TechCom): Technical writers document a company's project or service. Technical publication include user guides, installation manuals, and troubleshooting/repair/replace procedures. Legal Writing: This type of documentation is often prepared by attorneys or paralegals who could be in private practice or retained as corporate council. Compliance documentation: This type of documentation codifies Standard Operating Procedures (SOPs), for any regulatory compliance needs, as for safety approval, taxation, financing, technical approval, etc.

Various Export Documents

1. Letter of Credit: is an advise issued by the importers bank authorizing payment of a specified sum of money by a correspondent bank to a named beneficiary upon delivery by the beneficiary of specified documents.

2..

Bill of Lading: This is probably the most important document in international trade. It performs 2 functions:

(1)

It define the contract between the exporter and the ship covers to carry goods from one named part to another.

(2)

It is also the document of title to the goods and as such is fully negotiable. Legitimate transfer of BOL affectively transfers ownership of the goods from one party to another.

3.

Airway Bill: It is BOl in case of dispatch by air. - It is not fully negotiable.

4.

Certificate

of

Origin:

It

is

an

instrument

which

establishes evidence on origin of goods imported into any country. These certificates are essential for exporters to prove where their goods come from and therefore stake their claim to whatever benefits good of Indian origin may be eligible for in the country of exports.

5.

Transport documents: Bill lading Air bill Packing list Marine Insurance Policy Certificate or origin

6. 7.

Documents for Importing Countries Commercial Documents

8. -

Clean remittance Documentary letter of credit Bill of exchange Commercial invoice. Australian customs apart inter

Documents required by Australian authorities

Role 1. 2. 3. 4. 5. 6. 7. 8. 9.

of

Documentation

in

Transacting

Business

Propositions Get a business valuation. Get your books in order Understand the true profitability of your business. Consult your financial advisor. Make a good first impression. Organize your legal paperwork. Consider management succession. Know your reason for selling Get your advisory team in place.

10. Keep your eye on the ball.

Documentation that may be used most effectively as evidence in real property protest as follows: Blue prints, surveys, your own measurements to atleast to the square footage of the improvements and/or lande size. * Square footage is based on outside measurements* Photographs, statements from builders, independent appraisals, estimates to repair are good sources to reflect structural damages or hidden defects. Complete closing statements, including the signature page, to atleast the market value. DOCUMENTATION THAT MAY BE USED MOST EFFECTIVE AS EVIDENCE IN REAL PROPERTY PROTEST Listing of furniture fixtures, machinery of equipment and vehicles etc. Documentation is very important is real property and personal property matter. It works as evidence there.

SIGNIFICANCE OF DOCUMENTATION * It will make your Research Easier and Faster. It helps to prevent Duplication of Research. It gives others confidence in your research. DOCUMENTATION DOESNOT HAVE TO BE HARD: There is only one hard and fast rule for general documentation Record enough information so that another researcher can determine what you have scarched.

PROCESS FLOW SHEET

Cloth Mill/ Power Loom Card Board Pattern Designer Buyers Sample Other Sample

Checking & Layering Cutting Stitching Button Stitching, Holling, Label, etc. Thread cutting Quality Assurance Inspection

Washing

Pressing Individual Packing Master Box/ Bag Packing Packing in Cartons Dispatch

Zara
Type Industry Founded Founder(s) Sociedad Annima Retail Arteixo, Spain (May 24, 1974) Amancio Ortega Rosala Mera

Headquarters Arteixo, Spain Number locations Area served Key people Products Revenue Parent Divisions Website of 1808 stores Worldwide scar Prez Marcote, Director-general Clothing 7.071 billion (2009) Industria de Diseo Textil, S.A

Zara Diseo, S.L. Zara Logstica, S.A

zara.com

Zara is a Spanish clothing and accessories retailer based in Arteixo, founded Amancio Rosala Galicia, in Mera. 1975 It is Ortega and by and the

flagship chain store of the Inditex group, The world's largest apparel retailer, the fashion group also owns brands such as Massimo Dutti, Pull and Bear, Uterqe, Stradivarius and Bershka. It is claimed that Zara needs just two weeks to develop a new product and get it to stores, compared to the six-month industry average, and launches around 10,000 new designs each year. Zara has resisted the industry-wide trend towards transferring fast fashion production to low-cost countries. Perhaps its most unusual strategy was its policy of zero advertising; the company preferred to invest a percentage of revenues in opening new stores instead. This has increased the idea of Zara as a "fashion imitator" company and low cost products. Lack of advertisement is also in contrast to direct competitors such as Uniqlo and United Colors of Benetton.

Zara was described by Louis Vuitton Fashion Director Daniel Piette as "possibly the most innovative and devastating retailer in the world." Zara has also been described as a "Spanish success story" by CNN.

Origins and history

Amancio Ortega opened the first Zara store in 1975 in a central street in downtown La Corua, Galicia, Spain. Ortega named his store Zorba after watching the classic film Zorba the Greek, but apparently there was a bar that was called the same, Zorba, two blocks away, and the owner of the bar came and said, "this is going to confuse things to have two Zorbas." They had already made the molds for the letters in the sign, so they just rearranged them to see what they could find, and they found Zara. The first store featured low-priced lookalike products of popular, higherend clothing fashions. The store proved to be a success, and Ortega began opening more Zara stores throughout Spain. During the 1980s, Ortega started changing the design, manufacturing, and distribution process to reduce lead times and react to new trends in a quicker way, in what he called "instant fashions". The company based its improvements in the

use of information technologies and using groups of designers instead of individuals. In 1980, the company started its international expansion through Porto, Portugal. In 1989 it entered the United States and in 1990 France. This international expansion was increased in the 1990s, with Mexico (1992), Greece (1994), Belgium and Sweden (1994), etc. until reaching its current presence in over 73 countries. Zara stores are company-owned, except where local legislation forbids foreigner-owned businesses; In those cases, Zara franchises the stores.

Zara in Dundee, UK

Zara's previous logo

Products
As of 2007, Zara stores have men's clothing each Garment, and of women's these Shoes, clothing, Upper

subdivided in Lower Garment, Cosmetics and Complements, as well as children's clothing (Zara Kids). Currently their sizing on women's clothing goes to a US size 12 or a UK size 14.

Manufacturing and distribution

The men's department of a typical Zara store. Almere, The Netherlands

Zara clothing made in Portugal

Zara is a vertically integrated retailer. Unlike similar apparel retailers, Zara controls most of the steps on the supply-chain, designing, manufacturing, and distributing its products. Zara set up its own factory in La Corua (a city known for its textile industry) in 1980, and upgraded to reverse milk-run-type production and distribution facilities in 1990. This approach, designed by Toyota Motor Corp., was called the just-in-time (JIT) system. It enabled the company to establish a business model that allows self-containment throughout the stages of materials, manufacture, product completion and distribution to stores worldwide within just a few days. Regarding the design strategy, an article in Businessworld magazine describes it as follows: "Zara was a fashion imitator. It focused its attention on understanding the fashion items that its customers wanted and then delivering them, rather than on promoting predicted season's trends via fashion shows and similar channels of influence, which the fashion industry traditionally used.

Zara in Santo Domingo, Dominican Republic.

50% of the products Zara sells are manufactured in Spain, 26% in the rest of Europe, and 24% in Asian and African countries and the rest of the world. So while some competitors outsource all production to Asia, Zara makes its most fashionable itemshalf of all its merchandiseat a dozen company-owned factories in Spain and Portugal, particularly in Galicia and northern Portugal where labour is somewhat cheaper than in most of Western Europe. Clothes with a longer shelf life, such as basic T-shirts, are outsourced to low-cost suppliers, mainly in Asia and Turkey. Zara can offer considerably more products than similar companies. It produces about 11,000 distinct items annually compared with 2,000 to 4,000 items for its key competitors. The company can design a new product and have finished goods in its stores in four to five weeks; it can modify existing items in as little as two weeks. Shortening the product life cycle

means greater success in meeting consumer preferences. If a design doesn't sell well within a week, it is withdrawn from shops, further orders are canceled and a new design is pursued. Zara relies on sophisticated information technology, such as PDAs with wireless transmission capabilities, in the hands of store managers, to monitor customers' fickle fashion changes. Zara has a range of basic designs that are carried over from year to year, but some fashion forward designs can stay on the shelves less than four weeks, which encourages Zara fans to make repeat visits. An average high-street store in Spain expects customers to visit three times a year. That goes up to 17 times for Zara. On September 6, 2010, Financial Times reported that Inditex launched the first online boutique for its best-selling brand Zara. The website will begin in Spain, the UK, Portugal, Italy, Germany and Francesix countries that are among the most important of the company's 76 markets. When asked about the company's late arrival to internet retailing, Pablo Isla, chief executive, said they have been waiting for online demand to build before launching into cyberspace. All items on sale at its Zara outlets would be available online and at the same prices. Customers can choose from the usual range of paying methods and opt either for a free store pick-up or paid-for postal delivery. The online return and exchange policy is identical to

the store system, with shoppers given 30 days to change their minds. Queries will be handled by customer service operators or via e-mail or chat messaging. Inditex said that iPhone and iPad applications that allowed purchasing would soon be available. On November 4, 2010, Zara Online extended the service to five more countries: Austria, Ireland, the Netherlands, Belgium and Luxembourg. Online stores will begin operating in the United States and South Korea in 2011. The simple website allows shoppers to filter a search for garments by; type of garment, colours, sizes, prices, reference number, etc. Customers can view products in precise detail from different angles and use a SuperZoom feature to get an exceptional close-up look at the details of each item. In 2011, Zara entered the Australian market with a three story, 1400sqm store in the Westfield Sydney complex opened on April 21, 2011 and a second three story 1800sqm store at Bourke Street Mall Melbourne which opened on 15 June 2011. Zara will open its third Australian store in November 2011 at Burnside Village Shopping Centre in Adelaide, South Australia. It will be Australia's largest at 2,300sqm, and modelled on the design of their Fifth Avenue, New York store.

In November 2011, Zara entered the South African market with a flagship store in the upmarket suburb of Sandton, in Sandton City Shopping Complex, Johannesburg. In March 2012, Zara opened their second store in South Africa, at Gateway Theatre of Shopping in Durban. Later in 2012, a third store was opened in Cape Town at the Victoria & Alfred Waterfront mall.

Toxic-free production
In 2011, Greenpeace started a dialog with Zara to ban harmful toxins from the clothing production. In November 2012, Greenpeace published the "Toxic threads: the big fashion stichup" report, in which Zara was identified as the worst polluter. In 6 of the 10 clothes that were examined, nonylphenol ethoxylates were found, and in 2 cases cancer-inducing amines from azo dyes were found. After this publication, Zara was chosen as an example as biggest retailer in the world to raise awareness. Multiple protests were held at Zara shops all over the world, demanding Zara to come up with an ambitious plan to detox its clothes and value chain. After 9 days of intense public pressure, Zara decided to switch to a fully toxic-free production. The fashion retailer promised to stop discharging toxins for its clothing production, which also affects 7 other brands in the Inditex Group: Pull & Bear,

Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home and terque. Some of the most damaging toxins will be refrained of earlier, for example PFC's will be banned by 2015. Zara also promised to make information about its suppliers discharging of toxins publicly available for at least 100 suppliers (at least 40 of which are located in China) by the end of 2013. With this commitment, Zara follows Nike, Adidas, Puma, H&M, Marks & Spencer, C&A and Li-Ning, who implemented a Detox-policy as well.

Human rights concerns

Sweatshops

On August 16, 2011, a Brazil television show called A Liga (of the Bandeirantes TV network) accused the company of using suppliers who were running sweatshops for their outsourced production. On August 17, 2011, the Regional Superintendency of Labour and Employment of So Paulo, Brazil, closed a factory that produced Zara's clothing for its poor labour conditions. Bolivians were brought illegally to Brazil, locked in small apartments and sewed clothes for 12 14 hours a day. They could not leave the apartment without the consent of the supervisor and didn't have hot water for taking showers or food for lunch. The Bolivians earned about 1 USD for each dress they sewed, although the retail price in Brazilian

stores was about 70 USD for the same dress. Many of the workers were forced into paying their wages to human traffickers who had smuggled them into the country. In a statement, Zaras representatives said that the accusations of slave labour made against the retailer represent a serious breach in accordance with the Code of Conduct for External Manufacturers and Workshops of Inditex. They also countered that all factories responsible for unauthorized outsourcing have been asked to regularize immediately the situation of the workers involved. The Inditex group, along with Brazils Ministry of Work, will strengthen the supervision of the production system of all its suppliers in the country to ensure that such cases do not occur again. After the 2013 Savar building collapse, Zara's parent company Inditex with other retailers signed the Accord on Factory and Building Safety in Bangladesh.
Shop staff abuse

On March 21, 2012, the Swedish investigative journalism television program Uppdrag Granskning (from Sveriges Television) reported stories of 25 Zara employees, both shop managers and staff, that testified about severe abuse and terror against Zara employees in Sweden and Europe. Zara's

representative responded that the company will investigate and solve these problems. The union of shop workers, Handels, responded that Zara had promised improvement and was breaking its legal agreements and Unionen, which organises white-collar workers such as shop managers, called Zara's management style "management by fear".

Stores
There are a total of 1808 Zara stores and 164 Kiddy's Class stores. Some Zara stores operate as Lefties stores instead of Zara, a brand for low-cost fashion. The number of Zara stores in each country
Africa Algeria: 2 Egypt: 4 Morocco: 4 South Africa: 3 Tunisia: 2 11 10 10 Chile: 8 Dominican Republic: 3 Venezuela: 10 United Argentina: Americas Mexico: 60 Brazil: 46 United States: 45 Canada: 23 Colombia: 12 Hong Kong: Asia-Pacific China: 149 Japan: 89 South Korea: 40 Saudi Arabia: 27 Israel: 2 India: 13 Indonesia: Europe Spain: 324 and 131 Kiddy's Class France: 126 Italy: 90 and 8 Kiddy's Class Germany: 71 Russia: 71 United Kingdom: 65 Portugal: 61 and 19 Kiddy's Class Poland: 44 Greece: 41 and 6 Kiddy's Class

 2 2 2

Costa Rica:

Arab Emirates: 10

Turkey: 34 Belgium: 27 Netherlands: 24 Romania: 21 Switzerland: 14 Austria: 12 Sweden: 10 Croatia: 9 Ireland: 9 Ukraine: 9 Hungary: 8 Bulgaria: 7 Czech Republic: 7

Ecuador: 2 El Salvador: 2 Guatemala: Honduras:

Thailand: 10 Malaysia: 9 Australia: 8

Singapore:

Panama: 2 Puerto Rico: 2

Lebanon: 6 Philippines: 6

Uruguay: 2 Peru: 1

Taiwan: 6 Kuwait: 5 Kazakhstan: 3

Cyprus: 5 Slovenia: 5 Finland: 4 Latvia: 4 Lithuania: 4 Serbia: 4 Luxembourg: 3 Norway: 3 Slovakia: 3 Azerbaijan: 2 Denmark: 2 Estonia: 2 Georgia: 2 Iceland: 2 Andorra: 1 Malta: 1 Monaco: 1 Montenegro: 1

Bahrain: 2 Jordan: 2 Qatar: 2 Oman: 1

Business Model of Zara

As the largest chain, and brand Zara is most of the

internationalized Inditex's

principle driver of the group's growth and play the lead role of Inditex's sales and profit. Zara's unique business model brings special interest of business studies and is often sited as "Dell in the fashion industry". The core concept of Zara's business model is they sell "medium quality fashion clothing at affordable prices", and vertical integration and quick-response is key to Zara's business model. Through the entire process of Zara's business system: designing, sourcing and manufacturing, distribution and retailing, they presented four fundamental success factors: short cycle time, small batches per product, extensive variety of product every season and heavy investment in information and communication technology. These four elements are involved in every aspect of the business. Zara's designers track consumer preferences on a year-round basis and place orders with both internal and external designers. Each year several hundred thousand SKUs are produced based on 11,000 distinct items varying in color, fabric and size. Zara is able

to accomplish this huge variance due to ordering small batches and internal production of the most stylish, and therefore most timesensitive items. More predictable styles are outsourced to manufacturers in Asia. The throughput time from beginning of the design phase to the arrival of the finished goods in the stores is 4 to 5 weeks for new items and 2 weeks for modifications to existing items. The sourcing and manufacturing process are also key to the business model. Zara has purchases offices in the fashionable cities of Barcelona and Hong Kong which allow for the purchases to also serve as trend-spotters. Zara uses an Inditex subsidiary, Comditel, for its purchasing of fabric. Approximately half the fabric is purchased in grey to allow for flexibility in manufacturing a variety of colors and patterns. This is a key component of the business cycle as the fabric is finished in just one week. The particular distinction of Zara's manufacturing is that they manufactured its most fashion-sensitive products internally and produce in small batches for the most time-sensitive ones. For distribution, all merchandise is shipped through either the central facility in Arteixo, Spain, or through satellite sites located in Argentina, Brazil and Mexico. Merchandise in the main facility has a capacity of only 45,000 folded garments per hour. This facility admittedly has its limitations unless more capacity can be created elsewhere. Also, the vertical integration of manufacturing and

distribution

greatly

helped

to

reduce

the

Bullwhip

effect.

On the retailing end, the business model allows for Zara to have a much more fashion forward line because it can commit to its product line much later in the season. In fact, the design process does not seem to stop and the designers are constantly evaluating consumer preferences. Zara's in-store staff is also young, and very fashion-conscious who serve as key "trend-spotters". In addition, Zara provides very limited volumes of new items in the most fashionable of Zara's stores and then uses the results of those sales to decide whether the items should also be sold in other locations. The limited volume and short available time successfully created a sense of 'scarcity' in consumer's perception.

Current Issues Zara is facing several issues. Zara has a consistent business

system that gives the company its competitive advantage. One of these advantages is the economies of scale that Zara is able to utilize and the company has been successful in scaling up its distribution system. However, with continued growth, especially due to expansion in the international markets, there is some concern in regards to Zaras centralized logistics model. The company is concerned with diseconomies of scale as it grows. To address this issue and increase capacity, Zara has begun construction of a second distribution center in Zaragoza.

The other concern facing the company is in the area of international expansion and its geographic scope. The company realizes that it needs to continue to expand internationally. However, which territories to enter is somewhat unclear. The opportunities to expand within Spain are limited based on H&M experience in Sweden. One possibility is to expand in Europe itself, specifically targeting Italy. Another region is North America, but this region suffers from retailing overcapacity, less fashion-forward sense, demand of larger sizes, higher operating costs, intense competition and weakening demand. South America is much smaller and also subject to profitability pressures. market though profitable. competitive. With this continued expansion, the other question facing the company was the model it should utilize in each country. The company had experimented with franchising, joint ventures, and company owned stores. The questions it faced now were which of these to utilize. Also, should it start up chains or acquire existing ones. The real issue was to perform all these activities while maintaining profitability and revenue growth requirements. Middle East is also a small Lastly, the Asian market is very

RECOMMENDATIONS

Short Term: Zara faces a myriad of options on how the company wishes to grow. After careful analysis, a few key recommendations emerge. The first of these recommendations is to further expand into Europe. Given Zaras centralized distribution system which is already located in Europe (Spain), it seems that Zara will have the easiest time leveraging its existing system in regions within relatively close proximity to its main centers. Specifically, Zara should look into aggressively increasing its presence in Italy. Zara has already attempted to enter the Italian market twice through joint-ventures. The latest of these events paid off with the successful opening of a massive store in Milan, the largest Zara store in Europe. Zara can piggyback off this success and aggressively establish a presence in the lucrative Italian market. Aside from the Italian market, there are

numerous other European markets that Zara can and should further expand into. Among these are Eastern Europe and Germany. Another important strategic recommendation involves the Asian market. Zara should hold off on this expansion route.. Although huge in scope, the Asian market has proven to be a market of intense competition. Not only does such competition squeeze margins but it requires careful strategy if success is to be achieved. If Zara is focusing on an aggressive expansion program in Europe, it cannot devote the resources and focus necessary to achieve great success in such a competitive market as Asia. Furthermore, although there is intense competition in the Asian clothing industry, established brands can still earn a price premium over the competition in this market. A larger presence in Europe will only raise Zaras cache and make it easier for the company to compete in the Asian market in future. Other markets that Zara is considering expanding in are the South American and Middle Eastern markets. It is advisable that Zara not seek growth in these markets, at least initially. The South American markets are much smaller than some of Zaras other growth opportunities. They are also subject to profitability pressures that are thought likely to continue. The Middle Eastern markets, although more profitable than South America, is even smaller in scope than South America. With other much larger growth

opportunities available to Zara, the company should not expend valuable focus and resources in these regions (at least not in the short term). However, the Middle Eastern markets do offer profitable opportunities. Thus, Zara should explore growth in these markets but not before attacking some of the bigger growth markets. To support this growth, Zara must scale up its distribution system. The case mentions that Zara was beginning construction on a second distribution center which would add substantial capacity to the system. Although some argue that a centralized logistics model might suffer from diseconomies of scale and that what worked well for a 1000 stores will not work well for 2000 stores, the increased capacity that Zara will gain from expanding its distribution centers will be pivotal in supporting the growth of the company. Long Term: Zara should look into expansion into the US market. Zara is

operationally strong and should be able to out-compete other companies on this dimension. Even though Benetton and H&M had trouble with this area in the US market, Zaras track record indicates that it should be able to compete. For example, GAP shows revenues 5 times larger than Zaras, but its COGS is 70% of net revenues vs. only 48% for Inditex. For GAP, operating expenses

account for 92% of the gross margin and for Inditex, this number is only 58%. GAP suffered declines due to its inability to reposition itself to a more fashion-driven assortment and is not profitable due to its high COGS and operating expenses. Zaras system may help it avoid both of these mishaps. It has room to grow in the US market if it can keep its costs low and continue to monitor trends via its sophisticated IT system, store managers, fashion-conscious staff, and designers (trade magazines, fashion shows, industry research, etc.). Zaras competitive advantage is in its business system. However, when Zara moves into international markets, it loses some of these advantages. It loses some control over costs shipping costs, tariff costs, etc. Zara can overcome this problem by re-configuring its system to a less centralized approach. It should keep some portions of its systems centralized (such as designing, purchasing, etc.) but should move manufacturing and distribution to the international market. For example, in the US market the company can establish a manufacturing facility in Mexico (or US) near its satellite distribution center in Mexico. It can also expand this distribution centers to service the US market. The products can be purchased centrally and then shipped from Comditel directly to North America for manufacturing and distribution, instead of having to go through Spain. This will result in a slight increase in

manufacturing cost (due to increased labor and facilities costs in US), but these will be offset by reduced shipping and tariff costs. The rest of the system can stay centralized and provide support for the North American manufacturing and distribution. By utilizing this method, Zara may be able to reduce its costs. The current prices are based on market conditions and therefore Zara can leave the prices intact and enjoy greater margins, which would help preserve its margins and allow it to invest in systems to sustain its competitive advantage. The other issues in the US market are retailing overcapacity, less fashion-forwardness, need internal variation. for larger sizes, and considerable Zaras current system of IT and mangers

feedback system to designers will help Zara avoid overcapacity. Manufacturing and distributing close to the source (in US) will help Zara address the latter three issues. Implementation and Risks Zara is already in the process of implementing a second distribution facility in Zaragoza. expansion. This will help with its continued European Now that it has a flagship store in Milan, it should

continue expanding in Italy. Zara should continue expanding like it traditionally has in the rest of Eastern Europe with its oil stain approach. It already has a presence in many of the countries like

Germany and Poland. Therefore, its expansion will be more of the same. Its distribution system is already in place, so integration of the new stores into the network will be something Zara already has experience in. For overseas expansion, it requires much more capital. Zara will need to invest in manufacturing and distribution facilities in North America as it moves into that market. As soon as it has the capital requirements, Zara should build a manufacturing facility in North America. fashion. In addition, Zara will have to invest in training the The purchasing and designing can continue to stay management to be able to operate these facilities in a similar centralized. However, the new facilities will need investments in IT and logistics to communicate with the current systems and utilize the existing knowledge in the system. The risks involved by expansion into the US market are clear. There is intense competition, higher operating costs, and weakening demand in the US market. This clearly poses a risk to the growth Zara may be able to obtain. This can result in capital losses and similar obstacles were faced by both Benetton and H&M. Other risks that company faces are to its margins with international expansion. The company is unable to control the increased costs in exporting to foreign countries and currently passes these costs to the consumer. However, it may be difficult to continue doing this and margins are likely to get squeezed. The company needs to be

able to grow while maintaining these margins. If it is unable to do so, it risks threats to its competitive advantages and cost efficiency. Zara also faces risks to its image and therefore has to be very careful in regards to franchising and joint-ventures. With these models, Zara may have a limited role in operating the retail locations. However, if these are poorly managed and operated, there is a possibility of tarnishing the brand and the image that Zara has created. This can also effect the positioning and market segmentation strategy in a particular country for example, in South America, the company has to position itself as a made in Europe brand.

How a Business can Achieve Sustainable Competitive Differentiation and Positioning

ZARA HAS become Spain's best-known fashion brand and the flagship brand of 2.5billion holding group Inditex. Amancio Ortea Gaona, the companys founder, began retailing clothes in 1963. By 2005 Inditex emerged as one of the worlds fastest growing manufacturers of affordable fashion clothing. Now with over 2000 stores and promising to double that number by 2011, Inditex is one of the biggest business success stories in Spanish history. Zaras success offers us all some instructive lessons in how to create and sustain a break through strategy. The striking thing is that Zara has found differences that matter to customers and differentiated itself from its competitors by performing key activities [in its supply chain] differently. It is this that sets challenges for competitors because they will not find it easy to imitate or equal Zaras positioning and it is this achievement that has given Zara sustainable competitive differentiation and positioning. This article shows how Zara has achieved this level of uniqueness. Lets start with the market! Todays consumers are spending less on clothingchoosing to spend their disposable income on healthcare, electronics, education, and travel and leisure. Moreover they can now choose from a wide assortment of

inexpensive consumer,

products. it is more

Thus

to

capture than

todays ever to

elusive find a

important

breakthrough in the clothing market. Through a clear focus and vision, Zara has tapped into the power of fashion. It has shortened conventional supply chain response from 5-7 month down to 2-2 months and their customers are eagerly awaiting next weekstake note, not next seasons new fashion! Small and frequent shipments keep product inventories fresh and scarcecompelling customers to frequent the store in search of whats new and to buy nowbecause it will be gone tomorrow. Thanks to the twice weekly deliveries of replenishment stock as well as new items, customers constantly return to stores to browse new items. Zara's global average of 17 visits per customer per year is considerably higher than the three visits to its competitors As the eyes and ears of the company, empowered retail managers provide word-of-mouth information on customer wants and preferences. This is quite at odds with relying solely on electronically collected data, an approach used by competitors. Thus lines that are not selling well are quickly removed and popular items quickly replenished. A quick turn around on merchandise helps generate cash, reduces inventories and eliminates the need for significant debt. Poor communication is often the culprit of bottlenecks. Zara invested in information

technology (IT) early on. Their in-house IT is simple and effective. Vendors and suppliers report that people are accessible and answers can be obtained quickly. Internal communication is maximized by housing on one floor, the designers, pattern makers and merchandisers, as well as everyone else involved in getting the product completed. Ninety per cent of Zara stores are company-owned; the rest are franchises or joint ventures. Customers entering a Zara store in London, Paris, New York or in Rio de Janeiro find themselves in the same environment: a predominantly white, modern and spacious store, well-lit and walled with mirror. The latest fashions hung from the store racks around them. A long line of people typically waited at the cash registers to pay for their purchases: a few select items. In comparison with other clothing retailers, who spent 3-4 percent of sales on advertising, Zara spent just 0.3 percent. The little it spends goes to reinforce its identity as a clothing retailer; low-cost but high fashion. Controlling notorious bottlenecks along the supply chain is key to speed. For example dyeing and fit are critical processes within the supply chain. Zara is a large investor in a dye and finishing planta notorious bottleneck. Its control allows them to oversee the dyeing process. A further trouble spot is sewing. Even though Zara uses sub-contractors some subcontractors, it carries out the bulk of all cutting

itselfa crucial process that determines fit. 60% of the manufacturing processes are outsourced in countries close to the Zara headquarters in Spain to help achieve a quick turnaround. Zara maintains a strong relationship with their contractors and suppliersviewing them as part of the company. To successfully react to consumers demands, design decisions are delayed as long as possible. Typically, Zara precommits to 50%- 60% of its production in advance of the season, whereas other clothing retailers commit to 80%- 90%. Thus Zara reserves mill capacities to ensure production facilities are available when needed. Design collections are developed by creative teams rather than groups of designers. Creative teams consist of designers, sourcing specialists and product development personnel. The teams work simultaneously on different products, building on styles that were previously successful. Designers are trained to limit the number of reviews and changes, speeding up the development process and minimizing the number of samples to be made. Zara hires young designers and trains them to make quick decisions. Decision-making is encouraged and bad decisions are not severely punished. Designers are trained to limit the number of reviews and changes, speeding up the development process and minimizing the number of samples made. Failure

rates of Zara's new products were reported have been said to be just 1 per cent, considerably lower than the industry average of 10 percent. Some say Zaras real strength is its well developed culture, and that isnt something that can be easily knocked off. Traditionally, design and development precedes fabric procurement. Zara has turned this practice on its head. Zara unlike rivals is fabric driven. Designs are developed with available fabrics and trims. This eliminates waiting for the long and laborious process of fabric formation. In todays competitive environment, Zara has shown that fine tuning the supply chain is no longer a strategic tool, but a necessity. It has shown that supply chain management can be managed provide sustainable competitive differentiation and positioning on the one hand and increase throughput, reduce inventories and operating expenses on the other.

ZARA INVENTORY MANAGEMENT

Zara develops a business model that incorporates

moderate prices with new clothing styles faster than its competitors. It maintains design, production and distribution processes well to respond to the quick shifts in consumer demands. They are flexible enough to produce annually. The company can design a new product and have finished goods in its stores in four to five weeks. They believe in shortening the product life cycle =greater success in meeting customer preferences They have a design team of 200 people, which produce 12000 new styles a year. They keep a close watch on new trends and buying behavior through market research. 12000 new items

VALUE CHAIN OF ZARA

Zara is an example of a company which exploited the value chain to get competitive advantage. The company aims to achieve the customer satisfaction by introducing variety of fashionable products One distinctive feature of the value chain system of Zara is its agility. In other words, flexibility and quick response to the market demand. 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 penny spent on technology adds value.

SWOT ON THE BASIS OF THE ANALYSIS

STRENGTHS QUALITY STORE IMAGE BRAND ASSOCIATION WEAKNESSES Advertisement Lack of Promotional Offers Customers are not particularly loyal to the brand OPPORTUNITIES Zara can increase the share of youngsters (16 24 age group) THREATS Others brand can attract the customers who are not loyal

SUGGESTIONS
From the analysis we have done, we suggest Zara two major things: 1. There is an opportunity to increase the customers between age group 16 24 years as they are generally satisfied on all the parameters. 2. As the age group of 30 + constitutes major percentage of Zaras customers, we should implement plans for their retention of this segment. To achieve this we have proposed the following suggestions: Price Deals Special promotional offers must be given to the young professional & senior executives like providing special discounts if they show their business ID. Loyalty Loyalty Club Cards must be introduced to give rewards for frequent shopping Advertisement Zara must increase their advertisement budget to attract more customers and increase awareness.

ZARA CLOTHING BRAND

Trendy clothing brand

Zara is known around the world for dressing men, women and children in a sexy retail environment that feels a lot more expensive and exclusive than it is. Truly a global brand, Zara has hundreds of retail locations everywhere from Abu Dhabi to Uruguay and is the largest division of Inditex, one of the largest fashion retail groups worldwide. The clothing brand has spread its high-fashion/low-cost brand message far and wide by establishing some unique, yet effective practices. Shunning expensive glossy ad campaigns and celebrity endorsements in favor of location, location, location, Zara strategically opens stores in heavily trafficked, high-end retail areas where a taste for trends are whet and wallets are wide open. Another important factor in the Zara brand success story is consistency in whos running

the show. Approximately 92 percent of all six-hundred-fiftysomething locations are owned entirely by Zara, allowing for greater control over the brands execution strategy. Also, the ability to produce over half of its own product enables Zara to churn out new clothing lines every few weeks, keeping prices low and product in step with the most current trends. We visited Zara.com to see if the web space evoked the same glam environment and up-to-the-minute sense of fashion as the stores. Built around a sophisticated sense of site structure, Zara is in keeping with the brands goal to drive traffic to retail locations. Visually, the site achieves a feel as stylish and modern as the brands product in look and functionality. Users are able to download Flash and view the site in English or in Spanish, the brands home language. A festive splash page features a colorfully illustrated, almost psychedelic background with a requisite model posed in front. The site loads quickly and plays a sultry mix of drum and bass music (with the ability to choose from three selections and an off buttona plus), similar to whats playing in Zaras retail locations, adding a consistent soundtrack to the brand experience. The home page, branded with the seasons message, Get into the flowget cool, is dedicated to promoting Zaras latest line

of clothing and features snippets of information about store openings. One big glitch on this page is that it isnt fully visible on all browsers. Embedded links under the section titles would also help improve traffic flow to each featured area. The clothing arena is where Zara.com most needs to shine and does. The Showroom area is a great example of superior clothing retail branding and execution online. Clickable symbols representing each product line direct users to preferred location. Crisp photos allow consumers to truly get a good look at the products. A click on each thumbnail shows a larger product shot and provides detailed product informationright down to suggested retail price. Visitors are unable to purchase Zara clothing or products online but this is in line with the brands strategy, which encourages users to make the pilgrimage to the store for a live experience. In addition, Zaras seasonal catalog is viewable online in its entirety and can be easily downloaded. The Customer Service area is free of frills but successfully augments the live retail experience. In keeping with the goal of providing users with a taste of the retail experience, the site features photographs of many Zara storefronts as well as a virtual visit function, giving users a glimpse into the store. Garment care information is providedan important detail

most retail clothing sites overlook. The Stores area also works well, which is key to a brand with so many locations. Pull-down menus power the store locator function, offering visitors easy access to the details they seek, further encouraging store visits. All in all, the site provides a strong representation of the brand. Like its stores, Zara.com has a great look, strong on design and ultimately functional without skimping on quality. Other than working out the major browser kink, the site succeeds in its goal to provide users with a complete simulation of the brand experience. As Zara has successfully proven in business, providing visitors with a sophisticated atmosphere allows the product to ultimately sell itself.

STRETEGIC ANALYSIS OF ZARA

ZARA focus uses on the Hybrid Model of Strategy . The brands product development capabilities results in faster deliveries. Brands differentiation lies in the fact it delivers products of high quality at relatively low prices.

Pressures for local responsiveness Pressures for cost reductions Low High Low International Strategy Global standardization strategy High Localization strategy Transnation al strategy

 ZARA reaps cost reduction benefit from Economies of Scale NO customization in marketing strategy, spends 0.3% of total revenues Low Cost & High Quality Strategy on Global Scale Zara did not follow any localization in the countries where it was present and provided only standardized products. Compete in existing market place Beat the competition Exploit existing demand Created Strategic Differentiation through excellent delivery system and low cost

Strategies Implemented
Low priced lookalike products of more popular, high end fashion brand at affordable prices. How does ZARA achieve this ?? Fresh fashion: 3 pillars - Short Lead time = More fashionable clothes - Lower quantities= Scarce supply - More styles = more choice, more chances of getting it right Amancio Gaona, regarded clothes as a perishable commodity, just like vegetables. Rather than making products that can be

stored in Cupboards, I have build a retail business that provides freshly baked clothes!! 3 pillars supported by certain other values Ownership and Control of Production Centralized Design and Production Centre React rather than predict Philosophy Information Technology Excellence

Short Lead Times: Keeping up with fashion

By focusing on shorter response time the brand ensure that stores have the products that the consumer want as that time Zara can move from identifying a trend to having clothes in its stores in 30days. Other take 4 12 months and hence they try to forecast trends rather than adopting a trend

Trend identification

Market research Sales reporting

A large design team is dedicated towards identifying the prevailing trends and designing styles to match those trends

Basis for Competitive advantage Co ordination between sales managers and design team Strong MIS system

Ownership and Control of Production

80% of Zaras production is carried out in Europe, much within a smaller radius from its HQ in Spain Gives control, however cost around 10 times more than that of Asia Inditex is a vertically integrated group, with up to date equipment for fabric dyeing, processing, cutting and garment finishing The group has processing capacity available on demand to provide the correct fabric for new styles Does not own the stitching but controls it through a network of subcontracted workshops in Spain and Portugal

Centralized Design and Production Centre

The physical proximity and and of the

organizational both the

the three groups increases speed quality of the design process The cross-functional teams can examine prototypes in the hall, choose a design, and commit resources for its production and introduction in a few hours, if necessary

 Centre at HQ consists of three spacious hallsone each for women's clothing lines, men's, and childrens Zara makes a point of running three parallel, but operationally distinct, product families. Accordingly, separate design, sales, and procurement and production-planning staffs are dedicated to each clothing line. Though it's more expensive to operate three channels, the information flow for each channel is fast, direct, and unencumbered by problems in other channelsmaking the overall supply chain more responsive

The Zara Supply Chain

Shortened conventional supply chain from 5-7 months to 2.5 months Small and frequent shipments keep inventory fresh & scarce, thus making customers come back again to see what's new Twice a week deliveries to replenish stock Lines that are not selling well are quickly removed & popular items replenished A quick turn around on merchandise helps generate cash, reduces inventories and eliminates the need for significant debt In house IT simple & effective Vendors and suppliers report that people are accessible and answers can be obtained quickly.

Controlling Bottlenecks : a large investor in a dye and finishing planta notorious bottleneck. Its control allows them to oversee the dyeing process Mostly uses contractors for sewing process

Recommendations for the Brand

Designer collaborations could help the brand move into newer markets Different trends in the local markets Develop its e-commerce site Zara.com further to enhance customer engagement & shopping experience By leveraging on Social Media platforms Maintain its hold on the production & distribution system. This is the base that makes Zara as a brand effective & must not be allowed to be diluted by way of increase outsourcing.

ZARA BRAND IMAGES

For Men

Zara Shoes

Zara handbags:

CONCLUSION
Conclusion With yearly sales grossing an approximate 10 million dollars and new Zara stores opening up every year, it is evident Zara is having tremendous success, which can be greatly attributed to their excellent retailing strategy of speed and innovation. Offering the latest fashion trends in booming industry that changes almost on a daily basis, Zara consistently encourages initiative and innovation to stay ahead of the competition. Within the clothing industry, most manufacturers and retailers follow a trend based on forecasts of future consumer preferences on fashion, thus limiting many retailers to hold only a few collective designs for the year. This, in fact, is where Zara shines and differentiates itself in the market. Zaras model of instant fashion basically allows clothes to be created just as trends are emerging, which leads to increased sales and high turnover of stock, making Zara one of the premier companies in the market today. In conclusion, Zara has a growing market share in the world expanding in North America including 14 stores in Canada, making them a very competitive company in such a difficult industry. The success and failure of a company rely on what their competitive advantage is, and Zara has shown with their innovative business model and unique retailing strategy that they can be a key player in this highly competitive industry

FINAL REPORT ON
DOCUMENTATION

SUBMITTED TO :
Ms. Gundeep Mam

SUBMITTED BY :
Ruchika B.Sc.-3RD Year (F.D.) Enrol. No. 3511100558