Case Study of Zara: A Better Fashion Business Model

Zara is one of the most well known brands in the world and is also one of the largest international fashion companies. They are the third largest brand in the garment industry and are a unit of Inditex. It their flagship range of chain stores and are headquartered in Spain. Zara opened its first outlet in Spain in 1975. The headquarters of the company is based in Galicia. There are more than 2600 stores across 73 countries in the world. The Zara clothing line accounts for a huge bulk of its parent group’s revenues. There are other clothing brands owned by Inditex such as Kiddy´s Class (children’s fashion), Pull and Bear (youth casual clothes), Massimo Dutti (quality and conventional fashion), Bershka (avant-garde clothing), Stradivarius (trendy garments for young woman), Oysho (undergarment chain) and Zara Home (household textiles). Inditex owns all Zara outlets except for places where they are not allowed ownership of stores (that’s where Franchises step in).

Zara is renowned for coming up with products on a short timescale instead of taking forever. They are known for taking around 2 weeks to develop products and have been known to come up with around 10,000 new designs every year (which is an industry record). They have bucked the trend by making productions in Europe instead of shifting their entire production to Third World or Developing countries. However some of their clothes are manufactured in parts of Asia due to the fact that they have a longer shelf life. They make most of their own products inside Spain or other European Countries as they own a large number of factories in both Spain and Portugal.… Read the rest

Value Added Statements – Definition, Advantages and Disadvantages

Meaning and Definition of Value Added Statements

The main thrust of financial accounting development in the recent decades has been in the area of `how’ we measure income rather than `whose’ income we measure. The common belief of the traditional accountants that profit is a reward of the proprietors has been considered as a very narrow definition of income. This was so because previously the assets were assumed to be owned by the proprietor and liabilities were thought as proprietor’s obligations. This notion of proprietorship was accepted and practiced so as long as the nature of business did not experience revolutionary changes. However, with the emergence of corporate entities and the legal recognition of the existence of business entities separate from the personal affairs and interest of the owners led to the rejection of proprietary theory.

Value added is now reported in the financial statements of companies in the form of a statement. Value Added Statement (VAS) is aimed at supplementing a new dimension to the existing system of corporate financial accounting and reporting. This is called value added statement. This statement shows the value created; value added (value generated) and the distribution of it to interest groups viz. Employees, shareholders, promoters of capital and government. Since VAS represents how the value or wealth created or generated by an entity is shared among different stakeholders, it is significant from the national point of view. ICAI, 1985 has defined Value Added Statement as a statement that reveals the value added by an enterprise which it has been able to generate, and its distribution among those contributing to its generation known as stakeholders.… Read the rest

Value Added – Concept, Definition and Uses

Meaning and Definitions of Value Added

The traditional basic financial statements are balance sheet and Profit & Loss account. These statements generate and provide data related to financial performance only. They do not provide any information which shows the extent of the value or the wealth created by the company for a particular period. Hence, there arose a need to modify the existing accounting and financial reporting system so that the business unit is able to give importance to judge its performance by indicating the value or wealth created by it. To this direction inclusion of Value Added statement in financial reporting system is useful. The Value Added concept is now a recognized part of the accountant’s repertoire.

However, the concept of Value Added (VA) is not new. Value Added is a basic and broad measure of performance of an  enterprise. It is a basic measure because it indicates the net output produced or wealth created by an enterprise. The Value Added of an enterprise may be described as the difference between the revenues received from the sale of its output, and the costs which are incurred in producing the output after making necessary stock adjustments.

Some definitions of Value Added are following;

  • E.S.Hendriksen has defined Value-added as: “The market price of the output of an enterprise less the price of the goods and services acquired by transfer from other firms.”
  • Morely has defined Value-added as:”The value, which the entity has added in a period that equals its sales less bought-in-goods and services.” i.e.
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Career Development – Meaning, Definition and Stages

The concept of career development is of growing concern to organizations since it matches the needs of a business with the career goals of employees. Formulating a career development plan can help employees to do their jobs more efficiently. Additionally, these plans can be beneficial for employees who might want to move up in a company or look for other jobs in the future. Today, challenging organizations have developed new concerns for the career development of their employees. They put greater emphasis on ‘career’ with coherent induction, training and development, increased job security by the accrual of experience and qualifications valued in the labor market.

Since a high majority of workers change their careers at midlife, it becomes evident that career development programs are needed throughout the life cycle. Other major reasons for this concern are:

  • The growth and productivity of organizations depend on the effectiveness of employee performance.
  • A change in the social values where employees do not consider work as the most important thing in life but rather selecting occupations and careers that fit the individual.
Definition of Career Development

Career development is defined an organized, planned effort comprised of structured activities or processes that result in a mutual career plotting effort between employees and the organization. Career development is an ongoing process by which individuals progress through a series of stages, each of which is characterized by a relatively unique set of issues, themes and tasks. Career development involves two sets of activities: career planning and career management.… Read the rest

Career Management – Definition and Meaning

Career is a general course of action, an individual chooses to pursue, all through his or her employment life. It may be represented as occupational positions a person has hold over so many years. Many people feel satisfied by achieving their career goals. At the same time, others have a strong feeling that, their careers, their lives and their potential has undergone unfulfilled. Employers too have a profound effect on employees’ careers. Some organisations have very formal career management processes, while others are very little concern about it. Career management is defined as the ongoing process of preparing, implementing and monitoring career plans. It can be undertaken either by the individual alone or can be a concerted activity along with the organisation’s career systems.

Career management is a process that enables the employees to better understand their career skills, develop and give direction to it and to use those skills and interests most effectively both within and outside the organisation. Specific career management activities provide realistic career oriented appraisals, posting open jobs and offering formal career development activities. Career development involves the lifelong series of activities that contribute to a person’s career exploration, establishment, growth, success, and fulfillment. Career planning is the deliberate process by which an individual becomes aware of his or her personal skills, interests, motivations, knowledge and other such characteristics. He also seeks and acquires information about the opportunities and choices, identifies career-related goals and establishes action plans to attain specific goals. Career management and career planning activities are complementary and can reinforce each other.… Read the rest

The Concept of Career Planning – Definition, Objectives and Process

Career is viewed as a bunch or collection of jobs or positions. Generally, it describes an applicable career path within the structure of the organization. Basically, it shows the principal personnel development paths within the organization. The etymology of the term derived from the Latin word career, which means race. All the jobs, that are held together during one’s working life, constitute career. It is also viewed as the sequence of positions held by an individual during the course of his employment life. Edwin B. Flippo defined a career, as a sequence of separate but related work activities that provide continuity, order and meaning in a person’s life. A career may be viewed as amalgamation of the changes in values, attitudes and motivation an individual embrace, as he or she grows older. This constitute subjective element of the concept “career”.

Greenhaus and Schein described several themes underlying different definition of career as:

  • The property of an occupation or organisation: In this way the career describes the occupation itself or an employee’s tenure within an organisation.
  • Advancement: It denotes the progression and increase in success an individual receives within an occupation or organisation.
  • Status of a profession: In this sense, career is used to distinguish different profession. Such as engineering, medical profession is different from other occupation like plumbing carpentry etc. The former is said to have a career where the latter does not have.
  • Involvement in one’s work: Sometimes career is used in a negative sense to describe being extremely involved in the task or job one is doing.
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