Case study Zara – questions 1 and 2 – page 354

1 What can competitors learn from Zara?

2 How is Zara succeeding if they don’t have a unique product to offer?

this is the case study of zara

As the rest of the Australian retailing economy was flailing in April 2011 after the global financial crisis, reporting lost consumer con dence and increasing online shopping, the Zara Sydney store was just gearing up to open its doors, on all three levels of the new 1830-square-metre Westfield store (Tadros, 2010). And open they did, amid shopper mayhem. Customers queued for hours and were quick to swipe items before they could make it to the shelf. Some estimates quote 80 per cent (AU$1.2 million) worth of stock being sold on the rst day’s opening in Sydney (Burns, 2011). A few months later, the Melbourne Bourke Street store opened, with hundreds of people lining up to get in. So how do they do it? Zara has a unique business model that essentially boasts good quality, on-trend merchandise and a ordable prices, resulting in staggering pro ts. Each year, the reported 200 designers on sta put out around 20,000 items (Inditex, 2016). The global distribution centre in Spain moves around 2.5 million items per week, and nothing stays in the warehouse for longer than 72 hours at a time (Kottke, 2015). Chief Communications O cer Jesus Echevarria is quoted as saying the strategy of the fast-fashion retailers is ‘the complete opposite’ to the traditional model. He says, ‘it’s a matter of customer feedback. We are pretty quick to react’ (Burns, 2011). Zara puts the success down to using customer feedback to design their range. However, it is the business model that incorporates speed rather than unique innovation that sets Zara apart from the rest. It is reported that Zara uses customer feedback and a daily sales analysis from all 1830 stores to compile manufacturing plans within 48 hours (Burns, 2011). These plans are then communicated to 1500 factories in Asia, Spain and Brazil— the garments are then delivered to stores within three weeks (Burns, 2011). This means that Zara stores can be replenished with small-batch fashion choices twice a week. Zara stocks many different products: apparel for men, women and kids, plus bags, accessories and shoes. While Zara has at times been criticised for copying major designers, they insist that it is the customer-driven focus that gives shape to the products that they design worldwide. From humble beginnings in 1975, when the rst Zara store opened in A Coruña, Spain, Zara now operates in 88 countries, with online shopping also available (Inditex, 2016). Retailers like Zara represent a new wave of retailing, bringing production even closer to customer demands.

1.      In country Water, there are only 2 goods: Wave and Fish. The following table shows the prices and quantities produced of these goods in 2005, 2010, and 2015:

i)      Calculate NGDP, RGDP, GDP Deflator for all the three years.

ii)    Calculate cost of basket, CPI for the same years

iii)  Calculate inflation for year 2015 from 2010 using both GDP deflator and CPI. Does the answer vary between the two methods? Explain why or why not   

2. A) What are the main differences between financial market and financial intermediary? Why would you choose to diversify your bonds and stocks when you have the alternative option of buying stocks/ bonds of a big amount from a single organization?

B) What happens in the labor market when companies follow Minimum Wage Law? Explain with a graph. Remember to explain the supply, demand of available labor in the market and the ongoing minimum wage of the market

On January 1, 2010 Fiberglass Industries was authorized to issue 750,000 shares of 3.00 par common stock, and 40,000 shares of 4% $25 par cumulative preferred stock.

Required: Using the information below, prepare the Stockholders' Equity Section of the Balance Sheet at December 31, 2011.

2010:

Jan 4th issued 100,000 shares common stock at $5/ share.

Jan 5th issued 10,000 shares preferred stock at $40/ share.

Feb 1st Issued 60,000 shares of common stock in exchange for a shop with an estimated fair market value of $367,500.

Aug 31st Declared a $.20 cash dividend on common stock.

Dec 31st Net Income was $1,537,900 for 2010.

2011:

Mar 1st Declared and distributed a 5% common stock dividend. The company's common stock was selling for $6 per share when the stock dividend was declared.

May 15th Purchase 4,000 shares of their own common stock for $7/share.

Aug 31st Declared a $.25 cash dividend on common stock.

Nov 15th Sold 2,000 shares of the treasury stock for 22,000 Dec 31st

Net income was $1,323,380 for 2011.

Use a government website (such as BEA.gov, historical data) and complete the data for the components of GDP 2010-2017. You should only report data on personal consumption expenditures, gross private domestic investment spending, government purchases, net exports (in a base year). Then, add up all of these components to get the GDP for 2010-2017 in a base year price. In other words, complete the following table.

HINT: A. go to www.bea.gov B. Under U.S. Economic accounts, select GDP C. Under the latest NIPA tables, select interactive NIPA tables D. Choose frequently requested NIPA tables. Please note that every year they change these tables. Finally, select First and Last year. Report the data for the last quarter of each year (fourth quarter).For example, for the year 2013, select the GDP and its components reported for the fourth quarter of this year. Do the same thing for other years and complete the following table.

Urban Brains and Rural Brains A study published in 2010 showed that city dwellers have a 21% higher risk of developing anxiety disorders and a 39% higher risk of developing mood disorders than those who live in the country. A follow-up study published in 2011 used brain scans of city dwellers and country dwellers as they took a difficult math test. To increase the stress of the participants, those conducting the study tried to humiliate the participants by telling them how poorly they were doing on the test. The brain scans showed very different levels of activity in stress centers of the brain, with the urban dwellers having greater brain activity than rural dwellers in areas that react to stress.

(a) Is the 2010 study an experiment or an observational study?

(b) Can we conclude from the 2010 study that living in a city increases a person's likelihood of developing an anxiety disorder or mood disorder?

(c) Is the 2011 study an experiment or an observational study?

(d) Can we conclude from the 2011 study that living in a city increases activity in stress centers of the brain when a person is under stress?

Reliable Manufacturing, Inc. is a calendar year, accrual method C Corporation that is the business of manufacturing widgets. Its taxable income averages $2,000,000 each year. On June 1, 2010, Reliable Manufacturer purchased a new manufacturing building in Minneapolis for $2,500,00. The land was allocated $500,000 and the building was allocated $2,000,000 of the purchase price. The building will be placed in service immediately upon purchase. Reliable Manufacturer occupied the building from June 1, 2010 through October 29, 2017. Reliable Manufacturer has entered into a purchase agreement to sell the land and the manufacturing building on October 29, 2017. a) What is the maximum tax cost recovery deduction Reliable Manufacturer can take on the manufacturing building in 2010? Please show your work and explain your calculations. b) What is the maximum tax cost recovery deduction Reliable Manufacturer can take on the manufacturing building in 2015 and 2016? Please show you work and explain your calculations. c) What is the maximum tax cost recovery deduction Reliable Manufacturer can take on the manufacturing building in 2017? Please show your work and explain your calculations.

trial balance of pioneer corp. on July 1, 2010 is:

account -------------------debit ---------------credit

cash............................ $26,000   

accounts receivable...... $4,500

accounts payable....................................$2,000

common stock.........................................$10,000

retained earnings.....................................$18,500

total...............................$30,500 .............$30,500

transactions during august 2010

a.loan of $45,000 from chasebank in note form

b.bought land for $40,000 cash

c. received $5,000 for services performed for customer

d. bought $300 supplies on credit

e. paid $1000 on account

f. paid salary expenses of $3000

g.received $3000 on account

h. declared dividend of $1,800

i. paid the $1,800 dividend declared in ( h. )

1)Journalize the transactions (a - i)

2)Post to the general ledger (a - i)

calculate the total only if its a permanent account

cash, accounts receivable, supplies, land, accounts payable, notes payable, dividends payable, retained earnings, dividends, revenue, salary expense, common stock.

3) create a trial balance for pioneer corp. on august 30, 2010. Pre-Closing

---do the appropriate closing journal entries

---set up a post closing trial balance.

1. Which of following is incorrect about the history of human population growth?

1. In the Modern growth era, both population and income per capita grow very fast.
2. In the Malthusian era, growth rates of both population and income per capita are close to zero.
3. In the Modern growth era, population growth slows down and income per capita grows fast.
4. In the post-Malthusian era, both population and income per capita grow at a higher rate compared with the Malthusian era.

2. According to the theory of Galor and Weil (2000), which of the following is the key driving force of demographic transition?

1. Structural transformation that increases the share of land in output
2. Government policy that encourages family planning
3. The positive feedback between population growth and technology growth
4. A one-time positive productivity shock.

3. Which of the following statements is incorrect about the nonrenewable natural resources?

1. The price of natural resources has an upward trend over time.
2. Technological progress is responsible for the declines in pollution and leveling off of energy use over time.
3. Depletion of natural resources have a negative impact on economic growth.
4. Pollution levels and income per capita have an inverse U-shaped relationship.

4. While the relative supply of college graduates has increased substantially in developed countries in the past few decades, the college premium (i.e., the college/high-school wage ratio) has also increased. Which of the following best explains the increases in both supply and price of skills?

1. An increase in the supply of skills raises the demand for skills directly
2. College students learn more from school today than in the past, and hence new generations of college graduates are more productive at work than the old ones.
3. Directed technical change: more skill-complementary technology is invented when the supply of skills is larger, increasing demand for skills subsequently.
4. New technology substitutes skills.

Apple’s profile

Apple Inc. (hereafter Apple) was established in 1977 and is registered on the NASDAQ Global Select Market exchange. According to its Form 10-K ‘Apple designs, manufactures and markets mobile communications, media devices, personal computers and portable digital music players, and sells a variety of related software, services, peripherals, networking solutions, and third-party digital content and applications’. Its products are sold through Apple’s retail stores, online stores and third parties

Apple is a world leader in producing innovative electronic goods and technology. In 2011 Apple’s net sales were estimated at $108.2 million. Its net sales in 2011 increased by 60% compared to 2010. Apple worldwide employs 60,400 full-time people and 2,900 temporary employees and contractors. The company utilizes outsourcing through the manufacturing of its products overseas; most of the factories are located in Asia          

Apple’s CSR policies and reporting

As required by the Security Exchange Commission (SEC), Apple has made the Form 10-K annual report available on its website. The Form 10-K contains – amongst other things – information on Apple’s business strategy and organization, the company’s risk factors, legal proceedings and financial data. It also includes the business conduct policy of Apple: ‘Apple conducts business ethically, honestly and in full compliance with all laws and regulations. This applies to every business decision in every area of the company worldwide’. Furthermore, the business conducts deals with corporate governance, information disclosure, non-corruption and bribery, environmental health and safety

Apple has considered the GRI G3.1 indices relating to the economy, the environment, human rights, society and labour for its publication on Governance, Product Environmental Reports, Recycling and Facilities Environmental Report and Supplier Responsibility. For Supplier Responsibility, Apple, for example, has taken into account the indicator which reports on measures it has taken to contribute to the elimination of child labour. About Product Environmental Reports, Apple has used the EN26 performance indicator and sets out initiatives to lessen the environmental impact of its products. Apple designs its products with the aim of being as energy efficient as possible, and it is the only company that can claim all electronic goods are Energy Star qualified. Apple’s products have become more powerful while, at the same time, fewer materials are used and fewer carbon emissions are generated.

Almost all of Apple’s products are outsourced for manufacturing overseas. On its Supplier Responsibility website, Apple states: ‘Apple is committed to the highest standards of social responsibility across our worldwide supply chain. We insist that all of our suppliers provide safe working conditions, treat workers with dignity and respect, and use environmentally responsible manufacturing processes. Our actions – from thorough site audits to industry-leading training programs – demonstrate this commitment

The Supplier Code of Conduct (Supplier Code) outlines Apple’s expectations for the suppliers it does business with. As a condition for doing business with Apple, suppliers have to commit to the Supplier Code. For the Supplier Code, Apple has adopted the Electronics Industry Code of Conduct (EICC), the guidelines and standards for the electronics sector. Through onsite audits, Apple ensures that suppliers comply with the Supplier Code. The final assembly manufactures are audited every year and the components suppliers are audited arbitrarily. Apple obliges its suppliers to respect the human rights of its workers, to inform the workers of their rights, and to treat them with dignity and respect. Apple requires from its suppliers that they prevent discrimination, involuntary and underage labour, excessive working hours and that they pay workers with wages and benefits in accordance with the applicable laws and regulations.

Apple’s conflicts

The limited transparency of Apple’s supplier sustainability policy has often been criticized in the media. In February 2010 Apple also turned down two shareholders’ sustainability proposals to establish a sustainability report on Apple’s environmental policies and the impact that climate change has on the company. The other proposal was to establish a board of directors’ sustainability committee

Labor and human rights

A well-known conflict involving Apple’s suppliers is the suicides at Foxconn. It is the largest contracted electronics manufacturer in the world, with dealings involving Dell and Sony. Foxconn is the manufacturer of iPhones and iPads and employs over 900,000 workers, of whom 420,000 employees work at the Foxconn Shenzhen plant. This plant covers 15 factories, including dormitories, a hospital, a bank, a grocery stores and restaurants. The workers live and work inside the complex

In 2006 the Chinese local press reported on the excessively long working hours and the discrimination of mainland Chinese workers by Taiwanese superiors. In May 2010 several media sources reported several cases of suicide at Foxconn. From 2009 to 2010 a total of 13 workers had committed suicide. The first worker, Sun Danyang, committed suicide after he had been interrogated on the loss of an iPhone 4 prototype that he had in his possession. When the former CEO Steve Jobs was asked about the suicides at Foxconn, he responded: ‘Foxconn is not a sweatshop

During an undercover investigation, it was discovered that the reason for the multiple suicides was related to internal management. ‘The facilities of Foxconn are fine, but the management is poor,’ revealed Zhu Guangbing, who organised the investigation. According to Audrey Tsui, a professor at the National University of Singapore Business School, Foxconn maintains a military-style management approach. The workers were not allowed to interact with each other. Workers who violated the rule were penalized with a fine or were held to be in contempt by the manager

The weekly working hours of workers were up to 70 hours, ten hours above the maximum hours set by Apple’s Supplier Code. The Foxconn factory has good facilities. The workers have access to swimming pools and tennis courts. Foxconn organises activities such as chess clubs, mountain climbing or fishing expeditions. But with a 70-hour workweek, employees did not have any time to enjoy these facilities

However, interviews with several Foxconn workers by Dreamworks China revealed that not all the employees were dissatisfied. Some believed that the working conditions at smaller factories are worse. One of Foxconn’s workers stated that employees at Foxconn thought the media had exaggerated the suicides regarding their connection to Foxconn and that possibly some suicides had a sentimental or romantic cause.

In February 2011, the media reported the child labour issues had worsened at the suppliers for computers, iPods and iPhones. Apple’s Supplier Responsibility Report 2011 revealed 91 underage workers at the suppliers

Workers’ health and safety

Concerning workers’ health and safety conditions at the suppliers, in May 2010 two workers were killed and sixteen employees were injured during an explosion at Foxconn. An Apple spokesperson stated: ‘We are deeply saddened by the tragedy at Foxconn’s plant in Chengdu, and our hearts go out to the victims and their families. We are working closely with Foxconn to understand what caused this terrible event’. In the same month, The Guardian reported that workers from Wintek had been poisoned by n-hexane, a toxic chemical used to clean the touch screens of iPhones. The employees complained that the compensation Wintek offered for the health damage was not sufficient. The workers who did receive compensation were asked to resign from their jobs.

Apple’s CSR policy post-conflict

Apple makes sure that suppliers comply with the Supplier Code by conducting audits. The audits cover working and living conditions, health and safety but also environmental practices at the facilities. According to Apple’s Supplier Responsibility Report 2010, Apple conducted 102 audits in 2009. In 2011 Apple conducted 229 audits, an increase of 80% compared to 2010. An audit is conducted by an Apple auditor and supported by local third-party auditors

In the Supplier Responsibility Report 2010, published in February 2011, Apple included a paragraph responding to the suicides at Foxconn

In the Supplier Responsibility Report 2011, Apple reports that during inspections Apple discovered ten facilities with underage labour violations. One of the facilities had a large number of underage workers. Because the management did not want to address the problem, Apple terminated businesses with this facility. Where underage labour has been discovered, suppliers are required to pay educational expenses, living stipends and lost wages for six months or until the worker reaches the age of sixteen

In November 2010, Apple set up a training programme to prevent the future hiring of underage workers. The human resources managers are trained in Chinese labour law. Training human resources managers, however, will not solve child labour issues. When the costs of labour, energy and raw materials rise and there is a shortage of labour, factory owners are forced to cut costs or to find cheaper labour. Child labour can easily be hidden by providing fake wages and work schedule data. Also, it is difficult to prevent child labour when underage workers want to work to provide for their families. The Supplier Responsibility Report of 2012 states that suppliers are obliged to return underage workers to school and finance their education through Apple’s Child Labour Remediation Program. Regarding abolishing underage labour, Tim Cook, the CEO of Apple, stated: ‘We would like to totally eliminate every case of underage employment. We have done that in all of our final assemblies. As we go deeper into the supply chain, we found that the age verification system isn’t sophisticated enough. This is something we feel very strongly about and we want to eliminate’

In the Supplier Responsibility Progress Report of 2011 Apple addressed the issue of the use of n-hexane. Apple obliged Wintek to stop using n-hexane and required Wintek to repair its ventilation system and to work with a consultant to improve its environmental health and safety systems

To take action, companies need to be transparent about their supply chain. In February 2012 Apple announced it would be the first technology company to join the Fair Labor Association (FLA) as a participating company.

------------------------quation-------------

1. At Shenzhen plant, many employees have committed suicide due to the following reason. (1 Mark)
   1. Discrimination among the employees
   2. Bad management
   3. Poor facilities
   4. Due to the explosion at the plant

Justify your choice: (50 words minimum/ 1Mark)

Nanotechnology is a field of research and innovation concerned with building 'things' - generally, materials and devices - on the scale of atoms and molecules. A nanometre is one-billionth of a metre: ten times the diameter of a hydrogen atom. The diameter of a human hair is, on average, 80,000 nanometres. At such scales, the ordinary rules of physics and chemistry no longer apply. For instance, materials' characteristics, such as their colour, strength, conductivity and reactivity, can differ substantially between the nanoscale and the macro. Carbon 'nanotubes' are 100 times stronger than steel but six times lighter.

make a case study should consider either :

1. Methods of nano-particle manufacturing
2. Application of nano-particle in chemical engineering field.