The future of fast fashion - Inditex (I)WHEN Spain`s Crown Prince

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The future of fast fashion - Inditex
(I)WHEN Spain's Crown Prince Felipe and Letizia Ortiz Rocasolano announced their engagement in 2003,
the bride-to-be wore a stylish white trouser suit—which raised some eyebrows among those concerned with
royal protocol. But within a few weeks, hundreds of European women were wearing something similar.
Welcome to the world of instant fashion, in which a Spanish company is challenging conventions and
building a global brand: Zara.
(II) Instead of trying to create demand for new trends in the summer and winter seasons presented in fashion
shows, Zara studies the demands of the customers in its stores and then tries to deliver an appropriate design
at high speed. In the process, Zara has become the most profitable arm of Inditex, a holding company of
eight retail brands, and one of the biggest success stories in Spanish business.
(IV)From its beginnings in 1963 when Amancio Ortega Gaona, its founder, began to trade garments, Inditex
has emerged as one of the world's fastest-expanding makers of affordable fashion clothing. Since 2000 it has
more than doubled its number of shops to 2,240 by the end of last year, with sales of more than €5 billion ($7
billion). On June 13th, Inditex announced net profits up by 21% for the first quarter.
(V)How can Inditex prosper when Europe's entire textile industry is supposed to be under threat from cheap
imports from China? At Inditex's heart is a vertical integration of design, just-in-time production, delivery
and sales. Some 300 designers work at the firm's head office in La Coruña in Galicia, a poor region in
northern Spain. They are in daily contact with store managers to discover bestselling items.
(VI)Fabric is cut in-house and then sent to a group of several hundred local co-operatives for sewing. When
the finished product returns, it is ironed, carefully checked and wrapped in plastic for transport on conveyor
belts to a group of giant warehouses. Twice a week trucks deliver the garments to other European countries
and by aircraft to the rest of the world.
(VII)Production is deliberately carried out in small deliveries to avoid oversupply. While there is some
replenishment of stock, most lines are replaced quickly with more new designs rather than with more of the
same. This helps to create a scarcity value. Shoppers cannot be sure that something that has caught their eye
will appear in the store again—or can be found at another Zara store, even in the same city. On the other
hand, they also know that everyone they meet will not be wearing it.
(VIII)The result is that Zara's production cycles are much faster than those of its nearest rival, Sweden's
Hennes & Mauritz (H&M). An entirely new Zara garment takes about five weeks from design to delivery; a
new version of an existing model can be in the shops within two weeks. In a typical year, Zara launches
some 11,000 new items, compared with the 2,000-4,000 from companies like H&M or America's giant
casual-fashion chain, Gap.
(IX) All of Zara's shops use point-of-sale terminals to report directly to La Coruña. On top of that, every
evening store managers consult a personal digital assistant to check what new designs are available and to
place their orders according to what they think will sell best to their customers. In this way, its store
managers help shape designs. Zara does not employ star designers but often unknowns, many of whom are
recruited directly from top design schools. Inditex is extremely clever in how it uses technology, says
Andrew McAfee, a Harvard Business School specialist in the corporate use of information technology. The
company keeps its technology simple—even a little old-fashioned—but as a result spends five to ten times
less on information technology than its rivals.
1. TRUE OR FALSE?
a.
b.
c.
d.
e.
2.
The company founder began to produce garments in 1963 (F);
H&M is Zara’s biggest competitor (T) ;
High speed in design and delivery are two main reasons of Zara’s success (T)
Zara appoints famous designers (F)
ANSWER THE FOLLOWING QUESTIONS:
a. What is the general point of the article?
The article talks about INDETEX the reasons for the success of Zara global brand. Cutting costs,
producing young and fashionable clothes, managing a continuous change of style are among the
company’s assets which have contributed to its increasing sales and fast growth.
b. Why are most lines replaced with new models instead of replacing them with more products of
the same line?
To increase sales and to guarantee that customers do not see too many models of the piece
they have bought
3. Choose the right definition for the following terms:
1.
2.
3.
4.
5.
6.
7.
BRAND
SUPPLY (v)
LAUNCH (v)
DELIVERY
RIVAL
REPLENISHMENT
STOCK
a. inventory
b. inaugurate, start
c. competitor, opponent
e. act of restocking
f. provide, equip, furnish
g. product manufactured by a company and given its name
h. transference, distribution
1-g; 2-f; 3b; 4-h; 5-c; 6-e; 7a
4. What do the following numbers/figures refer to:
2003: the year when Prince Filipe got married to Isabel
2,240: the number of Zara shops by last year;
Five to ten: the times/percentage of minor/inferior/less Zara expenditure than competitors on
information technologu
AMONG THE PRODUCERS OF CHEAP FASHION GARMENTS, IT IS THE ONE THAT HAS GROWN MOST
QUICKLY IN THE WORLD
5. In your own (English) words, explain the following expressions:
6.
“Zara has become the most profitable arm of Inditex,” ZARA HAS BECOME THE MOST
SUCCESSFUL (ADVANTAGEOUS), RICHEST BRANCH/DIVISIO/SUBSIDIARY
OF INDITEX
GRAMMAR & USE OF ENGLISH 1
Match these words (1-10) with their definitions (a-j)
1. Advertisement
a) a reduction in price offered by the seller
2. Research
b) a person or company that makes goods from raw materials
3. Discount
c) choose someone for a position
4. Employ
d) Students often take a temporary job during their studies – for little
or no pay – because they want to get experience
5. Bankruptcy
e) wage, salary
6. Work placement
f) Condition of person or organization unable to pay one’s debts
7. Manufacturer
g) a public notice selling goods or services
8. Customer
h) a person or company who sells goods to you
9. Supplier
i) a buyer, client or guest
10. Revenue
j) exploring a new market or developing a new product
1-G; 2-J; 3-A; 4-C; 5-F; 6-D; 7-B; 8-I; 9-H; 10-E
2. Vocabulary. Replace the underlined words in sentences 1-5 with a synonym below. Write
your answer next to the sentence.
providing / demanding / hiring / exploiting / entering
1 My job involves giving customer support to our users. PROVIDING
2 Collecting data is one thing. Using it is another. EXPLOITING
3 The managing director is asking to speak to you. He sounds angry! DEMANDING
4 Taking on new staff is a lengthy process. HIRING
5 I’m just putting in the data on the candidates. ENTERING
3. Choose the most suitable word from the expressions in brackets to complete these sentences
1. Advertising companies spend a lot of money on creating clever (slogans/directories/mailshots) that
are short and memorable such as the message for the credit card, Access: ‘Your flexible friend’.
2. Celebrity (exhibition/research/endorsement) is a technique that is very popular in advertising at the
moment.
3. Some perfume companies provide (leaflets/commercials/free samples) so that customers can try the
perfume on their skin before they buy.
4. Use the words in brackets to make phrases (2 each=12)
1. This is a (high/recommend) HIGHLY RECOMMENDED product
2. It is made out of (long/last) LONG-LASTING TITANIUM
3. Is there much (compete) COMPETITION in your field?
4. They are the largest (produce) PRODUCER of steel in the region.
5. This line is less (profit) PROFITABLE these days
6. The price of this product is not (very/high/compete) VERY HIGHLY COMPETITIVE
5. Put the words in brackets in comparative or superlative form. (1 each=7)
1. Our LARGEST (large) competitor is ten or twelve times BIGGER (big) than us, but they are not our
MOST DANGEROUS (dangerous) competitor; they are the LEAST IMPORTANT (little/important)
to us.
2. MOST people sleep at night.
3. Horses can run FASTER (fast) than donkeys (asini).
4. They are identical. They look the same: they are AS beautiful AS each other.
6. Rearrange the words to make sentences. (3 each=6)
1. firm offer does health insurance private you your DOES YOUR FIRM OFFER YOU PRIVATE
HEALTH INSURANCE?
2. benefits do special receive what you? WHAT SPECIAL BENEFITS DO YOU RECEIVE?
7. Choose the present perfect or the simple past. (2 each=6)
1. The United Kingdom __________ (to hold) a general election on 6th May 2010.
2. No one party __________ (to win) an overall majority.
3. Now, the Conservatives and the Lib. Dems. _______________ (to form) a coalition government.
8. Active and passive forms (3 each=12)
1. The budget has already been spent. WE HAVE ALREADY SPENT THE BUDGET
2. We expect turnover to rise again this year. TURNOVER IS EXPECTED TO RISE AGAIN THIS
YEAR
3. Profits should always be ploughed back. WE SHOULD ALWAYS PLOUGH PROFITS BACK
4. The market values the company at between 30 and 40 million dollars. THE COMPANY IS
VALUED BY THE MARKET AT BETWEEN 30 AND 40 MILLION DOLLARS.
9. Financial vocabulary. Write the opposites of these words. The first letters of the opposites are
given. (2 each=10)
a. creditor
dEBTOR
b. employer
eMPLOYEE
c. expenditure
rEVENUE
d. liabilities
aSSETS
e. losses
pROFITS
10. Complete these sentences using either the zero, first, second or third conditional forms. (2 each=6)
1. WILL you DELIVER (deliver) by the end of the month if we PAY the transport costs?
2. If they DIDN’T HAVE (not have) a guaranteed market, their business WOULDN’T SURVIVE (not
survive)
3. If I had had more time, I WOULD HAVE BOUGHT (buy) totally new equipment.
11. Use the most appropriate future form. do not use the present. (2 each=6)
1. By the end of the year, she ________ (to be) the oldest person in our office.
2. “_____________ (to ask) your boss for a rise(aumento), or haven’t you decided yet?”
3. They have been playing very well recently: I’m sure that they __________ (to win) their next match.
12. Phonetics (2 each=20)
1. /ɪn‚θjuːzɪ'æstɪk/
enthusiastic
2. /'leɪbə(r)/
labour/labor
3. /tʃiːp/
cheap
4. /'mɪʃn/
mission
5. /wɜːk/
work
6. /'væljəbl/
valuable
7. /ə'plaɪ/
apply
8. /fɔːl/
fall
9. /kə'mɒdətɪ/
commodity
10. /'ɜːnɪŋz/
earnings
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