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Appendix A: Company overview A1: Company name ,overall purpose, size, location

Early history[edit] Founded by Amancio Ortega in 1975, Zara is a flagship clothing chain store that is part of Inditex group, the world's largest apparel retailer. Amancio Ortega opened the first Zara store in 1975 in central A Coruña, Galicia, Spain where the company is still based. Ortega initially named the store Zorba after the classic film Zorba the Greek, but after learning there was a bar with the same name two blocks away, the letters were remolded for the sign to say "Zara". It is believed the extra "a" came from an additional set of letters that had been made for the company. [8][9] The first store featured low-priced lookalike products of popular, higher-end clothing fashions. Ortega opened additional stores throughout Spain. During the 1980s, Ortega changed the design, manufacturing, and distribution process to reduce lead times and react to new trends in a quicker way, which he called "instant fashions". The improvements included the use of information technology and groups of designers instead of individuals.

Expansion[edit] In 1985, Amancio Ortega set up a parent company for Zara before engaging in global expansion, and in 1988, the company started its international expansion through Porto, Portugal.[10] In 1989, it entered the United States, and then France in 1990.[11] During the 1990s, Zara expanded to Mexico (1992) [12] and Greece, Belgium and Sweden (1993). In the early 2000s, Zara opened its first stores in Brazil (2000); Japan and Singapore (2002); Venezuela, Russia and Malaysia (2003);[13][14][15] China,[16] Morocco,[17] Estonia,[18] Hungary[19] and Romania (2004);[20] the Philippines,[14] Costa Rica and [21] Indonesia (2005);[22] South Korea (2008); [23] India (2010);[24] Taiwan, South Africa and Australia (2011);[25][26] and Peru (2012).[27] In September 2010, Zara launched its online boutique. The website began in Spain, the UK, Portugal, Italy, Germany and France.[28] In November of that same year, Zara Online extended its service to five more countries: Austria, Ireland, the Netherlands, Belgium and Luxembourg. [29] Online stores began operating in the United States in 2011,[30] Russia and Canada in 2013, [31][32] [33] Mexico in 2014,[34] South Korea in 2014,[35][36] Romania in 2016,[37] India in 2017, Brazil in 2019 and Peru in 2020.[38] Zara introduced the use of RFID technology in its stores in 2014. The RFID chips are located in the security tags which are removed from clothing when purchased and can be reused. The chip allows the company to quickly take inventory by detecting radio signals from the RFID tags. When an item is sold, the stockroom is immediately notified so that the item can be replaced. An item that is not on the shelf can easily be found with the RFID tag. [39] In 2015, Zara was ranked #30 on Interbrand's list of best global brands.[40] In 2019, Zara updated their logo.[41] It was designed by the French agency Baron & Baron.[42] In 2019, the global fashion business Journal MDS stated that while the textile commerce of the world had gone down by 2.38%, Zara's had risen 2.17%.[43] In 2019, Chief Executive Persson said the brand is waiting for more acceptable global rent levels to continue its expansion. In Europe, the brand planned to cut the number of retail locations beginning in 2020.[44] There are 2259 Zara stores in 96 countries.[84][85][86] Zara introduced HighAF in 2021. In early 2020 due to the COVID-19 pandemic, ZARA stores worldwide had closed temporarily due to restrictions. However, in April 2020, ZARA owner ramped up shipment to Asia as China ended lockdown after 76 days.[87]

Zara’s story begins with the opening of our first store in the Spanish coastal city of A Coruña in 1975, an early milestone in our company’s long history. Over the years, Zara has remained faithful to its core values, expressed simply in the

same four key words that define all our stores and online platforms: beauty, clarity, functionality and sustainability . Nurturing a highly intimate relationship with its customers, Zara’s designers respond instinctively to their changing needs, reacting to the latest trends and constant feedback received across its Woman, Man and Kids collections, to deliver new ideas in the right place and at the right moment. Further enhancing the quality of our customer service , Zara stores also include Radio Frequency Identification Technology (RFID), using cutting-edge systems to track the location of garments instantly and making those most in demand rapidly available to customers. This technology has allowed Zara to complete the implementation of its integrated stock management system in the 64 markets in which it operates its integrated store and online platform. Zara’s Join Life collection and the eco-stores are two examples that underline the brand’s unwavering focus on sustainability and improved customer experience. These developments have been further enriched by a range of new and innovative projects, such as the installation of clothing recycling containers in-store and a scheme providing for free at-home collection of used garments to complement the delivery of online orders.

A2: Principal products /services: Zara stores have men's and women's clothing as well as children's clothing (Zara Kids). Zara Home designs are located in European stores. The majority of Zara customers range from 18mid 30s. years old. After products are designed, they take 10 to 15 days to reach the stores. [45] All of the clothing is processed through the distribution center in Spain. New items are inspected, sorted, tagged, and loaded into trucks. In most cases, the clothing is delivered within 48 hours. Zara produces over 450 million items per year.[46] Zara also includes accessories, shoes, swimwear, beauty and perfumes. In May 2021, Zara launched its first beauty line, ZARA Beauty. [47]

A3: overview of customers/suppliers: Zara’s main target customers are 18-year olds to 35-year-old adults. According to Zara retailer their consumers are classed as middle-class individuals in society. The gender varies from men and women as Zara tend to be quite open to both genders, especially through their advertisement, as they use models from both genders. Zara tend to keep their styles “hot” according to Arif Harbott which in turn helps them to target their young set of customers. This allows to be able to attain the interest of their customers as well as continuing to compete with the nearest competitors like forever21 and H&M. They segment their product line by women’s (60%), men’s

(25%) and children (15%). what does a typical customer of Zara look like? The typical “Zara customer” is a young fashion hungry individual that are always looking for the latest trend to wear. These types of customer will be someone from today generation that tends to use various social media platforms such as Facebook, twitter and Instagram. Portugal, Morocco, India and Bangladesh are the next biggest suppliers of the group, with over one hundred local partners. India and Bangladesh are also the ones with the largest workforce, after China, with over 275,000 workers in India and near half a million in Bangladesh

Last year, the company raised its production capacity in China, its largest supplier, where it works with 449 partners, 24 up from 2017. The producers that work for Inditex in China employ over 410,000 employees. Turkey is its second largest sourcing market, after it overtook Spain by number of suppliers last year, with 189 partners (vs. 186 in Spain). However, Turkish factories that work for Inditex have traditionally employed more people. Portugal, Morocco, India and Bangladesh are the next biggest suppliers of the group, with over one hundred local partners. India and Bangladesh are also the ones with the largest workforce, after China, with over 275,000 workers in India and near half a million in Bangladesh.

A4:

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Zara’s Organizational Structure Posted on November 18, 2009 | 1 Comment

The world of retail is flooded with hundreds of companies, but few have yet to be noticed like Zara. Zara has captured the public’s attention due to its efficient and unique business structure and turn around efficiency. Owned by the Inditex Group and opened in 1975, Zara has over 1,560 stores in 70 different countries with over 10,000 new design launches each year. Louis Vuitton’s fashion director has referred to Zara as, “possibly the most innovative and devastating retailer in the world.” The Inditex Group is made up of eight different retail sale formats, one including Zara. Inditex operates on a fashion philosophy that boasts, “creativity and quality design together with a rapid response to market demands.” More specifically, Zara operates with a lean organizational structure, which emphasizes high performance. The lean organizational structure also works to reduces the number of managerial hierarchy levels and decentralize decisionmaking. This model limits the business’s focus on redundant administrative procedures. From design to delivery it takes the company only five weeks for a garment and only two weeks for an existing model. This method shortens the product life cycle, which allows for greater success in meeting consumer needs. Customer satisfaction is of extreme importance to Zara and the consumer’s purchases truly shape almost all of Zara’s business decisions. Zara and its lean organization thrive on the use of information technology. Zara shops use this technology to report directly to their production centers and designers in Spain. Additionally, store managers use PDAs to check on the latest clothing that’s been designed and place their orders based on the demand they see in their store. Moreover, Zara is also a vertically integrated company. Vertical integration describes a company that has control over several or all of the production and distribution steps involved in the creation of their product. The retailer operates with a vertically integrated demand and supply chain while most other textile chains rely on outsourcing and cheap labor, whereas Zara owns its on textile dye house. Zara has set up a well-oiled machine based on customer demand and fast turnaround. The question we must now ask is, “how sustainable will Zara’s business

model be in mostly un-penetrated markets like A

merica?”

Zara Organizational Structure Info: 1728 words (7 pages) Essay Published: 24th Jul 2017 in Organisations Reference this Share this: Facebook Twitter Reddit LinkedIn WhatsApp

Structure relates to a skeletal framework of activities and processes in an organisation and specifies the roles of these in achieving goals and objectives of the organisation. According to (Mullins, 2009), a good structure is highly important due to the fact that decisions on structure are primary strategic decisions which can make or break an organisation. One important aspect of a good structure is the human element. Organisation structure should be designed so as to encourage employees and increase the morale and job satisfaction of organisation members which will result to overall organisation efficiency. (Mullins, 2006) describes nine basic considerations in the design of organisation structure. The fundamental step is to define organisational objectives to enable further analysis and comparisons of other forms of structure.

Clarification of objectives A clear definition of objectives is vital to provide a framework for the design of structure of an organisation. Organisation objectives provide fundamental schemes for division of labour and creation of group units and sub units. Clearly stated aims and objectives will assist in decisions on the strategy and structural dimension to employ to achieve organisational objectives.

Task and element functions Certain functions must be performed in order to produce a good or service, from the development of the good or service to finance of resources used in the complete processing. These functions are referred to as the task functions. The results of the task functions must be coordinated to ensure the efficient achievement of total objectives of the organisation. Element functions refer to vital parts of the management process and are supportive of the task functions such as human resources and public relations. Get Help With Your Essay

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Division of work An organisation needs to accomplish an overall task of allocating many different activities to groups of people or individuals to achieve its objectives. The division of work and grouping together of individuals should be organised according to a basic criterion to establish a coherent link between the activities involved. The division of work and linkage of activities occur in various ways such as specialisation, use of similar resources or common expertise of organisation members as the most commonly used basis for grouping activities. Others include division by product or service, division by location, division by nature of the work

performed, division according to common time scales such as shift working, division according to staff employed such as allocation of work based on experience and so on.

Centralisation and decentralisation The extent of centralisation or decentralisation refers to the point of critical decision making in an organisation which reflects patterns of authority in a structure. In centralised structures decision making authority is within the power of top management while decentralised structures, decision making authority is delegated (Rollinson, 2005). The arguments in favour of centralisation in an organisation entail the easier implementation of a common policy, easier coordination and management control, preventing sub-units from becoming too independent, over-head cost reduction and faster decision making because of the smaller number of people involved. In contrary, arguments for decentralisation include decisions being made at a point closer to operational levels, increased responsiveness to local circumstances, improved level of personal customer service, more flexible structure, control is distributed more evenly which provides opportunity for development for those lower down, and encouraging effect on motivation and morale of staff. Basically, decentralisation tends to be easier to implement in the private sector organisations than public sector ones where procedures and protocols are the order of the day. Decentralisation being a more flexible approach provides support for employee participation and empowerment at all levels which increases innovation and improves technology while centralisation ensures professionalism in all activities by maintaining effective coordination and overall control of the organisations activities as a whole. A mix of both such as being global and local, practically being decentralised with a central control and authority should produce an organisational advantage. A vivid illustration of decentralisation is the Zara fashion enterprise (cited in Mullins, 2009, p.596), where the company derived its success from integration of design, production, logistics and sales within companies globally rather than separating and outsourcing this different business elements unlike its contemporaries in the fashion industry, while still keeping control of all major operations in Spain. The company rejected rigid organisational structures in favour of a more flexible approach which comes from a highly integrated, fast and efficient form of communication between its global network of outlets and central hub of operations in Spain. The industry average time for introducing a design into the shops is six to nine months; Zara achieves this task in three to four weeks. What is peculiar here is that Zara only makes what is selling at the moment, store assistants and managers constantly get information about what is selling and how quickly it leaves the racks implying that local managers have a strong influence on their store’s success and thus the company overall. On the other hand, an illustration of centralisation is that of Nissan Motor Company (cited in Certo and Certo, 2006, p.123), a successful global automobile manufacturing company where the new CEO ordered calls for

the elimination of 30 per cent of production capacity in Japan due to recent financial difficulties. The CEO’s plan is to help reduce expenses as well as close offices in New York and Washington with a view to centralise company operations in Japan to enhance success.

Principles of organisation The ten principles of organisation include principles of the objective, specialisation, co-ordination, authority, responsibility, definition, correspondence, span of control, balance and principle of continuity.

Span of control This refers to number of subordinates who report directly to a particular manager or supervisor. Span of control is larger at lower levels of the organisation where responsibility is concerned more with the performance of specific tasks. If span of control is too wide, supervising too many subordinates effectively becomes difficult and stressful for managers as well as planning and development, training and control. Narrow span of control may lead to low morale and initiative of subordinates due to close supervision level, and also increase administrative costs. Find Out How UKEssays.com Can Help You!

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Chain of command This refers to the number of different levels...