How to Develop a Successful Strategy

Intermediate Level:

• Listening: Zara - Company Strategy

• Grammar: Review of the Past Simple Tense – irregular verbs

• Reading Text: Zara’s Ability to Grow

• Pronunciation point: /s/ /z/ or /th/

• Business Vocabulary: Ability & Inability

• Cultural Awareness Point: The Spanish Siesta

• Role Play: Relocate Production?

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INTRODUCTION: • What do you know about the clothes shop, ZARA?

• Do you shop at Zara?

• Do you know anything about the man who started the company?

VOCABULARY: Do you know what these words mean? You will hear them in the listening: Own – shirt – cheap – low-cost – profits – footfall LISTENING 1:

Listen to the audio and answer these questions.

1. Where and when did Ortega open his first Zara shop?

2. What is his family background?

3. What did he do when he was 17 years old?

4. What his strategy when he opened his first shop?

5. What were the sales figures in 2008?

Grammar review: Irregular Verbs in the Past Simple Tense

In the listening you heard about Amancio Ortega’s origins and how he started his company. Below is an overview of when we use the Past Simple tense and irregular verbs (see list on page 7 for more examples of irregular verbs).

Sample Sentences: Last year we sold 2 million shirts (positive) The company didn’t buy the factory (negative) When did you find the report? (interrogative) Form: 1. Positive form 2. Negative form 3. Interrogative form Last week I/you/he/she it/we/they bought a new computer

Last year I/you/he/she it/we/they didn’t sell perfume

Did I/you/he/she it/we/they see Susan in Paris yesterday?

When to Use the Past Simple

a. Completed action in the past e.g. I went for the interview yesterday. I didn't get your email.

b. To ask when an activity happened e.g. When did he see the new factory?

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Vocabulary 2: Can you explain the meaning of these words and phrases? They appear in the Reading Exercise below.

Amancio Ortega started Zara with $25

Amancio Ortega (be) the son of a railway worker who (start) with nothing, and is now Spain's richest citizen. The entrepreneur (begin) the fashion company Zara, in the basement of his home. In 2008 Zara (sell) clothes worth $9.6 billion, and has over 800 stores in 50 countries. Zara (be) now part of the Inditex group of companies, owned by the Ortega family. Amancio Ortega (be) born in León in 1936. They migrated to Galicia in the early 1950s. In 1963 he (quit) his job as an administrative assistant and with approximately $25 he (launch) a range of lingerie. Soon he (open) the first Zara shop in the city of La Coruña, Spain. The year (be) 1975. Like other successful entrepreneurs, Ortega (be) a control freak. He is obsessed with the quality of his clothes. From the beginning he (invest) in clothing design and production. Ten percent of Zara’s employees (work) in manufacturing. Zara’s fashion designers (develop) 10,000 trendy items every year. They (find) inspiration in the street, the nightclubs and the catwalk. Zara’s store presentation is another area that is important to Ortega, especially the window displays. Inditex window designers (create) the best displays possible for the city and the local climate. The design team at Zara (believe) that attention to detail (be) crucial to the success of Zara. The next time you (pass) a Zara store take a close look at the window display.

READING EXERCISE: Read the following article on Zara and fill in the gaps with either the correct form of the verb (PAST or PRESENT simple, REGULAR or IRREGULAR).

quit - launch - range - trendy - catwalk - a control freak - attention to detail

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Functional Language Practice - Ability and Inability Example Sentences • Leaders can delegate and motivate • The company is unable to deliver the order tomorrow Ability: 1. Making someone able or something possible

The computer system enables Zara to change products quickly 2. Being able

Zara is able to produce a lot of items

3. Making something impossible or something unable Slow production prevents the competition from growing.

Uses • Being able to do something: Great businessmen are capable of inspiring others • Making something impossible or someone unable: The high cost prevented us from ordering the shirts The manager stopped the meeting early • Being unable to do something: I want to visit the factory but I can’t (something is preventing me) EXERCISE: Fill the gaps with an appropriate verb from the table above and put it in the correct form. More than one answer is possible. 1. Yesterday, we enter the shop but today we (be un/able). 2. The price us manufacturing in England (impossible).

3. Due to machinery failure we are complete the order (impossible)

4. The staff were an extra day’s holiday (possible)

Make Able / Possible

Be Able Make unable / impossible

Be Unable to / impossible

Enable Can Prohibit Can’t Allow Be able to Prevent from Be impossible to Permit Be capable of Stop/halt Unable to Approved Be possible to Forbidden Be incapable of

SPEAKING PRACTICE:

With a partner discuss your ability or inability to become a successful entrepreneur, or a great manager. Ask each other questions.

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Vocabulary: Do you know the meaning of these words? You will hear them in the listening exercise below: delivery times - production cycle - garment - season - avoid - launch - bulk - range

LISTENING 1:

Listen to the audio and answer these questions. 1. What is the first strategy? 2. What is the second strategy? 3. Why are the clothes made in small quantities? 4. Is Zara’s range of clothes important?

5. What is changing at Zara?

PRONUNCIATION PRACTICE: z / s / sh Say these words and sentences with your teacher. ZARA - SARAH - THESE - SHOE - SEW - SHOW - ZONE - SHOW - ZIP - ZOO -

HOUSE - GLASS - SIP - SURE - SAW - ZERO - SHOP - SHIRT – SKIRT - CERTAIN • Zero tolerance is sure to show results in certain zones.

• ZIP code is American English for postcode, and Sarah Zeb’s is SZ4 6HH

• Certain sites in the south are sure to be situated near to the city zoo

CULTURAL AWARENESS IN BUSINESS: Spanish Siesta

Traditionally, the Spanish take a siesta in the middle of the day: a 2-3 hour break to have lunch and a short sleep (a nap). However, with the new corporate culture in Spain the siesta is disappearing because it is unproductive. TALKING POINT:

• What are the benefits of a siesta? • In your country/culture what is a normal business lunch?

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ROLE-PLAY - THE MEETING

CASE STUDY: Zara is considering moving all of its production from Spain to China. This will reduce labour costs by 200% but will increase transport costs and give a longer delivery period from 10 weeks to 16 weeks.

CHAIRMAN & FAMILY MEMBERS: The Company is losing market share to strong competition but you do not want to move production away from your home country to China. For you it is not the solution, it will be fatal. You believe that better production is the answer, and you have a lot of experience. The problem is that you only own 25% of the company and shareholders want more profit. Present reasons for more investment in technology, machinery and staff training.

SHAREHOLDERS: You see the moving of production to China as the only way the company can compete. If the company restructures and invests, it will be very expensive and you don’t want to take the risk. The Chairman is being sentimental and unrealistic, and although he built the company up from nothing he is going to bankrupt it if you don’t explain the reality of the global economy. Present reasons why production should be moved to China. Think about competition, profit demands, good labour skills etc.

THE MEETING: Try to find a solution and practise using the Past Simple Tense, the Vocabulary of Ability & Inability when discussing the theme.

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COMMON VERBS - PAST SIMPLE LIST

Infinitive Past Simple be was, were become became begin began break broke bring brought build built buy bought can could choose chose come came cost cost cut cut do did drink drank eat ate fall fell feel felt find found fly flew forget forgot get got give gave go went grow grew have had hear heard hide hid hold held keep kept know knew leave left lend lent lose lost make made mean meant meet met pay paid put put read read (pronounced ‘red’) rise rose run ran say said see saw sell sold send sent spend spent take took think thought understand understood write wrote

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Audio-script 1 – Zara - intermediate Zara – intermediate level Amancio Ortega is Spain’s richest man, and the Chairman of Inditex, the company that owns Zara. Ortega started his company in 1963 with $25 and opened the first Zara shop in Galicia, Spain in1975. He comes from a poor family. His father worked for the train company and his mother was a cleaner, and at the age of 13 Ortega started work in shirt factory. At the age of 17 he quit his job and with his small investment bought cheap fabric in Barcelona, and began to make low-cost fashionable clothes. He sold the clothes to local shops, and with the profits he was able to open a small factory. The speed of production and good quality were very important factors to his early success. In 1975, Ortega opened his first Zara shop. His strategy was to rent the best location possible, directly opposite the most important shop in town. The rent was expensive but the location was crucial because the footfall in the area was really high. Zara’s clothes were instantly popular with the younger generation and in 2008 the company had sales of approximately $10 billion.

Audio-script 2 – Zara - intermediate

So, what are the business strategies that make Zara successful? Firstly, Zara keeps production in Spain and Portugal, and this means up to 15% higher labour costs, but enables shorter delivery times. Secondly, Zara's production cycles are much faster than those of its rivals, H&M, Gap and Next. A new Zara garment takes 5 weeks from design to delivery, but at H&M it takes 12 weeks. This means that the traditional 4 seasons of the fashion year have been replaced by as many as 12 seasons. Next, clothes are made in small quantities to avoid over-production, and styles are replaced quickly with more new designs. This creates a ‘limited opportunity to buy’, which is attractive. Another advantage is the range of products. Over 10,000 new items are launched each year, compared with the 2,000 to 4,000 at Gap. But things are changing at Zara. In 2007 the company moved some of its production to Eastern Asia, although the bulk of its manufacturing remains in Europe. China now produces 12.5% of Zara’s clothes and this could cause problems with future delivery speeds.

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ZARA: intermediate - Lesson Plan: Key objectives – to practise aural and oral Business English INTRODUCTION: Start by asking students if they have heard of ZARA, the fashion retailer. Get them to say what they think of the shop. (If the haven’t heard of the shop ask them about a clothes shop they know, GAP for instance). Teacher (T) - Students (SS) 7 mins LISTENING 1: Next tell students they are going to hear a spokesperson talking about ZARA. They need to answer the questions at the end. Make sure they understand the vocabulary words, which will be heard in the listening. Play the audio and ask the students to answer the questions. (T) - (SS) 5 mins GRAMMAR: Point out that in the listening Amancio Ortega’s origins and how he started his company were described in the past simple tense. Ask students why the tense was used (finished past). Go on to overview rules of when we use the past simple tense, and the irregular verbs (S) – (T) 3 mins READING & GRAMMAR EXERCISE: Elicit the meaning of the words in the box e.g. to quit smoking, what does that mean? Stop, give up etc. Go through reading text instructions and ask students to read out loud and fill in the gaps with an appropriate form of the verb provided. (S) – (T) 10 mins FUNCTIONAL LANGUAGE: Ask students about ways of describing ability. What was Amancio Ortega able to do? What was he unable to do? Write down on the whiteboard example of ability. Get students to read through examples of Ability & Inability and do the exercise and speaking practice that follows. (SS) - (SS) 15 mins CULTURAL AWARENESS POINT: Speak about the Spanish Siesta and use the past tense and vocabulary of in/ability (SS) – (T) 10 mins LISTENING 2: Tell students they are going to hear the 2nd part of the listening about ZARA. They need to answer the questions at the end. Play the audio. (SS) – (T) 10 mins PRONUNCIATION POINT: Drill the words and sentences with the students (SS) – (T) 10 mins ROLE PLAY: Split students into groups and get them to read their role cards and prepare to discuss the situation. Make sure they practice the grammar and vocabulary learnt in the lesson and to try and use the case study material in their argument. (SS) - (SS) 10 mins

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Exercise Answers Listening 1: 1. In Galicia, Spain in1975. 2. He comes from a poor family. His father worked for the train company and his

mother was a cleaner 3. He quit his job, bought cheap fabric in Barcelona, and began to make low-cost

fashionable clothes. 4. To rent the best location possible, directly opposite the most important shop in

town 5. What were the sales figures in 2008? Approximately $10 billion Reading: Is – started – began – sold – is – was – quit – launched - opened – was – is – invested – work – develop – find – create - believes – is - pass Functional Vocabulary: 1. Could – can’t 2. Prevented from 3. Unable to 4. Allowed Listening 2: 1. Zara keeps production in Spain and Portugal, and this means up to 15% higher

labour costs, but enables shorter delivery times. 2. Zara's production cycles are much faster than those of its nearest rivals, H&M,

Gap and Next. A new Zara garment takes 5 weeks from design to delivery, but at H&M it takes 12 weeks.

3. To avoid over-production, and styles are replaced quickly with more new designs. This creates a ‘limited numbers’ value, which is a great attraction.

4. Yes, Zara produces over 10,000 new items each year, compared with the 2,000 to 4,000 at Gap.

5. In 2007 the company moved some of its production to Eastern Asia, although the bulk of its manufacturing remains in Europe.

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