Table of contents

INTRODUCTION..........................................................................................................................................5
QUICK GLANCE: COMPANY OVERVIEW............................................................................................6
FASHION INDUSTRY – OVERVIEW........................................................................................................7
FASHION INDUSTRY – GROWTH DRIVERS...................................................................................................7
DRIVER FOR GLOBALIZATION..............................................................................................................8
MANUFACTURING AND DISTRIBUTION..............................................................................................8
1) OWNERSHIP AND CONTROL OF PRODUCTION.........................................................................................8
2) SUPERCHARGED PRODUCT DEVELOPMENT............................................................................................10
3) REACT RATHER THAN PREDICT.............................................................................................................10
4) QUICK-BAKE RECIPE: WELL MIXED INGREDIENTS...............................................................................11
DO PULL&BEAR FOLLOW JIT?............................................................................................................12
FAST COMPANY.........................................................................................................................................13
DESIGN.........................................................................................................................................................13
LOGISTICS..................................................................................................................................................13
HOW DOES PULL&BEAR KNOW WHAT THE CUSTOMERS WANT? (STAFF).........................14
INFORMATION AND COMMUNICATION TECHNOLOGIES..........................................................14
IS PULL&BEAR’S COMPETITIVE ADVANTAGE SUSTAINABLE?................................................15
THREATS AND WEAKNESSES...............................................................................................................16
PRODUCTS..................................................................................................................................................17
PULL&BEAR’S PRODUCT LIFE CYCLE CURVE..............................................................................18
MARKET ENTRY.......................................................................................................................................19
COUNTRY SELECTION............................................................................................................................19
CULTURE OF PAKISTAN.........................................................................................................................20
LANGUAGE IN PAKISTAN............................................................................................................................20
ISLAM.........................................................................................................................................................20
THE FAMILY MAP OF PAKISTAN................................................................................................................20
MEETING AND GREETING...........................................................................................................................21
GIFT GIVING ETIQUETTE............................................................................................................................21
BUSINESS ETIQUETTE & PROTOCOL IN PAKISTAN.....................................................................................21
BUSINESS MEETING ETIQUETTE.................................................................................................................22
NEGOTIATING.............................................................................................................................................23
BUSINESS CARD ETIQUETTE......................................................................................................................23
MARKETING SEGMENTATION.............................................................................................................24
TARGET MARKET.....................................................................................................................................24

2
 WHY LAHORE & KARACHI?......................................................................................................................24
PULL&BEAR’S CUSTOMER & PRODUCT OFFER............................................................................25
PULL&BEAR’S CUSTOMER SEGMENT........................................................................................................25
PULL&BEAR’S CUSTOMER OFFERS..........................................................................................................26
PULL&BEAR’S PRODUCT OFFERS.............................................................................................................26
MARKETING STRATEGY- ADVERTISING & PROMOTION...........................................................26
PEST ANALYSIS..........................................................................................................................................27
ENVIRONMENT POLICY.........................................................................................................................28
LEGAL FRAMEWORK OF BUSINESS OPERATIONS........................................................................29
PATENTS.....................................................................................................................................................29
TRADEMARKS.............................................................................................................................................30
COPYRIGHT................................................................................................................................................31
CONCLUSION.............................................................................................................................................32
RECOMMENDATION................................................................................................................................32
References......................................................................................................................................................33

3
Abstract:
Pull&Bear is the one of the largest international fashion companies owned by Spanish
tycoon Amancio Ortega. It belongs to Indetix one of the largest distribution groups in the
world. The particular business model is customer-based and includes the design,
manufacture, distribution and sales of the Pull&Bear’s products through an extensive
network of group-owned shops.

It is a very well reputed and recognized brand name in all over the world. We selected
this famous brand in our final project. And we are going to bring Pull&Bear (brand name)
by choosing Franchise option. The location we are suggesting is to open it fiRSt in
Karachi at Dolmen mall clifton and Lahore at M.M.Alam Road.

Moreover, we also done some important analysis to understand effectively about the
market and demand chemistry in Pakistan. Analysis such as Pakistan environment: PEST
analysis, market attractiveness: product life cycle, learning, market structure: Strengths,
threats and opportunities and key success factors to enter the Market.

Moreover, we also conduct brief study on the culture of Pakistan, the legal framework in
Pakistan, study about the economy conditions o f Pakistan. In last, we sum up our project
by recommendation for Pull&Bear and with conclusion.

4
Introduction

Pull&Bear is the flagship chain store of Inditex Group owned by Spanish

tycoon Amancio Ortega (Forbe’s 10th riches man in the world - $18.3 billion) , who also
owns brands such as Massimo Dutti, Pull and Bear, Oysho, Uterqüe, Stradivarius and
Bershka. The group is headquartered in A Coruña, Galicia, Spain, where the fiRSt
Pull&Bear store opened in 1975.

It is claimed that Pull&Bear needs just two weeks to develop a new product and get it to
stores, compared with a six-month industry average, and launches around 10,000 new
designs each year. Pull&Bear has resisted the industry-wide trend towards transferring
fast fashion production to low-cost countries. Perhaps it’s most unusual strategy was its
policy of zero advertising; the company preferred to invest a percentage of revenues in
opening new stores.

Its first store featured low-priced look like products of popular, higher-end clothing
fashions. The store proved to be a success, and Ortega started opening more Pull&Bear
stores in Spain. During the 1980s, Ortega started changing the design, manufacturing and
distribution process to reduce lead times and react to new trends in a quicker way, in what
he called "instant fashions". The company based its improvements in the use of
information technologies and using groups of designers instead of individuals.

In 1980, the company started its international expansion through Porto, Portugal. In 1989
they entered the United States and in 1990 France. This international expansion was
increased in the 1990s, with Mexico (1992), Greece (1993), Belgium and Sweden (1994),
etc. until the current presence in over 73 countries.

Pull&Bear stores are company-owned, except where local legislation forbids foreigner-
owned businesses. In the period of 2009 the turnover was of 3.123 million, assuming an
increase over the previous period of 3%.

5
Quick Glance: Company overview
 Type: Public
 Industry: Fashion
 Founded: A Coruña, Spain (1975)
 Founder(s): Amancio Ortega
 Headquarters: A Coruña, Spain
 Area served: Worldwide
 Products: Clothing
 Revenue: 1.2824 billion € (2014)
 Website: www.Pull&Bear.com
 970 stores in 72 countries (2009)

Pull&Bear’s turnover between 1986-2007

Above mentioned figure depicts about sales turnover of Pull&Bear, it shows that from
starting to onward company grow rapidly by establishing good position in the market.
This diagram clearly shows that after 1994 company turnover is increasing as company
went globally in these years.

6
Fashion Industry – OVERVIEW
The fashion industry is characterized as a chain, in which profits derived from “unique
combinations of high-value research, design, sales, marketing, and financial services that
allow retaileRS, branded marketeRS, and branded manufactureRS to act as strategic
brokeRS in linking oveRSeas factories” with markets.

There are various types of fashion and each type has its own characteristics. e.g. Fast
fashion is one of them which are used to describe clothing collections which are based on
the most recent fashion trends, whereas classical fashion on the other hand describes
those clothing collections which are evergreen. The recent trends are generally the ones
that are presented in various “fashion week” organized around the globe.

Fashion is a thing which constantly changes. Its value depreciates slowly after the time is
gone. In the time period when the product has just become “out-of-fashion” till its value
becomes zero, the product is generally sold on sale. As a result, this industry tends to
extract as much profit as possible when the product is in fashion then give “heavy”
discounts.

Fashion Industry – Growth Drivers

There are many factors on which the future growth of fashion industry depends:-

1. World GDP – The GDP growth will determine the buying capacity of people and
also the condition of other industries on which fashion industry depends.
2. Policies – As many countries are plunged into recession, the countries are
changing the import and export policies. These policies will have a major impact
on the industry growth as most part of fashion accessories are exported to other
countries.
3. Development of logistics – Logistics is the backbone of fashion industry. As the
better the logistics, faster the product hits the market, cheaper the cost, better it is
for the customers and so for the companies.
4. Growth of retail chains – Most of the companies do not have their exclusive
showroom only. They depend a lot on multi-branded showrooms across the world
to sell their products. Hence the growth and stability of the retail chains will go on
to improve the condition of fashion industry.
5. Development in IT – Speed of the process, the customer’s order from ordering
the raw material to the final selling of the product, greatly depends on the
technology used in the system. E.g. use of RFID, clipped tags, faster printeRS,
better communication channels etc. Better the technology available and used the
better the responsiveness of the fashion industry towards customers demands.

7
 6. OtheRS – There are various skills (of people or computer) which influence a lot
the fashion industry such as forecasting etc

Driver for Globalization

 The firm tripled in size between 1996 and 2000. Pull&Bear’s failure look
like high fashion but are comparatively inexpensive (average item price is
$27, although prices vary by country).
 Pull&Bear biggest competitors are H&M , Top Gear and Gap. It ranks
among the three “global winners” with Gap and H&M. The most
important strength of Pull&Bear is its manufacturing and distribution
sytem.

 Pull&Bear excels in getting locally targeted designs quickly onto store

shelves

 The average time for a Pull&Bear concept to go from idea to appearance

in store is fifteen days versus their rivals who receive new styles once or
twice a season. Smaller tweaks arrive even faster.

 Pull&Bear is twelve times faster than Gap despite offering roughly ten
times more unique products!

 At H&M, it takes three to five months to go from creation to delivery—

and they’re considered one of the best.

 Other retailers need an average of six months to design a new collection

and then another three months to manufacture it.

 At Pull&Bear, most of the products you see in stores didn’t exist three
weeks earlier, not even as sketches.

Because if these core competencies of Pull&Bear, it get recognized all over the world. As
it is operated almost all over the world where glamour and fashion industry is prevailing
day by day.

Manufacturing and Distribution

An article in Business world magazine describes it as follows:

"Pull&Bear was a fashion imitator. It focused its attention on

understanding the fashion items that its customers wanted and then
delivering them, rather than on promoting predicted season's trends

8
via fashion shows and similar channels of influence, which the fashion
industry traditionally used."

Pull&Bear follows a structure that is more closely controlled than most other retailers,
and pays further by having the various business elements in close proximity to each other,
around its headquarters in Spain.

1) OwneRShip and Control of Production

Retailers like the American chain’ Gap’ and the Swedish retailer ‘Hennes & Mauritz’
completely outsource their production to factories around the world and mostly to low
cost Asian countries. In contrast, it is estimated that 80 percent of Pull&Bear's
production is carried out in Europe which is within the small radius of its headquarters
in Spain. In fact, almost half of its production is in owned or closely-controlled facilities.

While this gives Pull&Bear a tremendous amount of flexibility and control, it does have
to contend with higher people costs, averaging 17-20 times the costs in Asia.
Counter-intuitively Inditex has also gone the route of owning capital-intensive
manufacturing facilities in Spain. In fact, it is a vertically integrated group, with up-to-
date equipment for fabric dyeing and processing, cutting and garment finishing. Greige
(undyed fabric) is more of a commodity and is sourced from Spain, the Far East, India,
and Morocco. By retaining control over the dyeing and processing areas, Inditex has
fabric- processing capacity available “on demand” to provide the correct fabrics for new
styles. It also does not own the labor-intensive process of garment stitching, but
controls it through a network of subcontracted workshops in Spain and Portugal.

PULL&BEAR manufactures 50% of its products in its own network of 22 Spanish

factories, 18 of which are located in and around the La Corunna complex. The other
half of its products are produced from 400 outside suppliers, 70% are in Europe.

50% of the products Pull&Bear sells are manufactured in Spain, 26% in the rest of
Europe, and 24% in Asian and African countries and the rest of the world. So while some
competitors outsource all production to Asia.

9
2) Supercharged Product Development
Design and product development is a highly people-intensive process. The heavy
creative workload of 1,000 new styles every month is managed by a design and
development team of over 200 people. This means that every person on an average is
producing around 60 styles in a year or 1-2 styles every week.
With new styles being developed and introduced frequently, each style would provide
only around 200,000-300,000 of retail sales, a far lower figure than other retaileRS or
brands, and certainly not “cost-efficient” in terms of design and product development
costs. But obviously, this higher cost of product development is more than adequately
compensated by higher realized margins.
In addition, the entire product development cycle begins from the market research. This
combines information –

 from visiting university campuses, discos and other venues to observe what young
fashion leaders are wearing
 from daily feedback from the stores
 from the sales reports

This has meant a significant investment in information technology and

communications infrastructure to keep streaming up-to-date trend information to the
people making the product and business decisions.

At the leading edge of research are the sales associates and store managers in Pull&Bear
stores, who zap orders on customized hand held computeRS over the Internet to
Pull&Bear headquarters based on what they see selling. And not just orders, but ideas for
cuts, fabrics or even a whole new line. They draw upon customer comments, or even a
new style that a customer might be wearing that could be copied for Pull&Bear's stores.
Traditional daily sales reports can hardly provide such a dynamically updated picture of
the market.

10
3) React Rather than Predict
What sets Pull&Bear apart from many of its competitors is what it has done to its
business information and business process. Rather than concentrating on forecasting
accurately, it has developed its business around reacting swiftly.

What a typical retailer or brand might do? Designers may start looking at fashion trends,
and start designing a look for summer 2010. Information and inspiration comes from
forecasting agencies, trade shows, and various other places. Over a period of 3-5 months
they develop the ideas into physical samples. Sales budgets and stock plans are developed
based on what is going on in the business right then (roughly one-year ahead of the
targeted style). At various times during this seasonal process, there are decision-making
meetings, where styles are accepted, rejected or changed, pricing and margin decisions
taken and orders finalized.

Based on a host of factors, the orders might then be placed with vendoRS in one or more
countries around the world. Typically vendoRS may take a few weeks to two months to
procure fabrics, have them approved by the retailer, and then produce a number of
samples, and only once all approvals are finished, put the style into production.

From beginning to end, the process of defining a concept to receiving goods in the retail
store might take anywhere from 9 to 12 months for a typical retailer. This one-year
advance decision making on what merchandise and how much to stock is a bit like
driving a car at speed by just looking in the rear view mirror! Amazingly, it seems to
work 60-65 per cent of the time.

Pull&Bear, on the other hand, largely concentrates its forecasting effort on the kind and
amount of fabric it will buy. It is a smart hedging by Pull&Bear because of two reasons
–

 fabric (raw material) mistakes are cheaper than finished goods erroRS
 the same fabric could be turned into different garments

In fact, for an extra degree of flexibility Pull&Bear buys semi-processed or un-colored

fabric that it colors up close to the selling season based on the immediate need. With that
edge, and a super-fast garment design and production process, it takes to the market what
its customers are looking for.

4) Quick-Bake Recipe: Well Mixed Ingredients

Garment styling for Pull&Bear actually starts from the email or phone call received from
the stores. Thus, from the beginning Pull&Bear is responding to an actual need, rather
than forecasting for a distant future.

Based on the store demand, Pull&Bear's commercial managers and designers sit down
and conceptualize:

11
  what the garment will look-like
 what fabric it will be made out of
 what it will cost
 and at what price it will sell

As soon as approvals are received, instructions are issued to cut the appropriate fabric.
The cutting is done in Pull&Bear's own high-tech automated cutting facilities. The
cut pieces are distributed for assembly to a network of small workshops mostly in
Galicia and in northern Portugal. None of these workshops are owned by Pull&Bear. The
workshops are provided with a set of easy to follow instructions, which enable them to
quickly sew up the pieces and provide a constant stream to Pull&Bear's garment finishing
and packing facilities. Thus, what takes months for other companies, takes no more than a
few days for Pull&Bear.

Finally, Pull&Bear's high-tech distribution system ensures that no style sits around
very long at head office. The garments are quickly cleared through the distribution centre,
and shipped to the stores, arriving within 48 houRS. Each store receives deliveries twice
a week, so after being produced the merchandise does not spend more than a week at
most in transit.

5) Information Technology Keeps It Boiling Keeping Costs Down

Information and communications technology is at the heart of Pull&Bear's business. Four
critical information-related areas that give Pull&Bear its speed include:

Collecting information on consumer needs trend into information flows daily,

and is fed into a database at head office. Designers check the database for these
dispatches as well as daily sales numbers, using the information to create new
lines and modify existing ones thus, designers have access to real-time
information when deciding with the commercial team on the fabric, cut, and price
points of a new garment.
Standardization of product information different or incomplete specifications
and varying product information availability typically add several weeks to a
typical retailer's product design and approval process, but Pull&Bear
“warehouses” the product information with common definitions, allowing it to
quickly and accurately prepare designs, with clear cut manufacturing instructions.
Product information and inventory management being able to manage
thousands of fabric and trim specifications, design specifications as well as
their physical inventory, gives Pull&Bear's team the capability to design a
garment with available stocks, rather than having to order and wait for the
material to come in.
Distribution management: its State-of-the-art distribution facility functions with
minimal human intervention. Approximately 200 kilometers of underground
tracks move merchandise from Pull&Bear's manufacturing plants to the 400+
channel that ensure each order reaches its right destination. Optical reading
devices sort out and distribute more than 60,000 items of clothing an hour.
Pull&Bear's merchandise does not waste time waiting for human sorting.

12
Do Pull&Bear follow JIT?
Most JIT system (even Toyota’s) focus on manufacturing but Pull&Bear has a true just-
in-time system –

 From customer to design, production and fabric manufacturing

 Customer’s pull not designer’s push drives the system

This helps Pull&Bear to have an edge over most of its competitor’s strategy by having
very low Inventory to Sales Ratio.

Fast Company
Its output growth due to its ability to design a strategy own operations, working out of
inventory and responds in extremely fast to the needs of its customers to the point that
Louis Blanc, the company executive, says: "We want customers entering a posh shop
offering the latest fashion and good service at low prices. "But most important," adds
Blanc is trying to make our customers understand that if they see something they like
have to buy now because next week is no longer in stores. It's about creating a climate of
scarcity and opportunity. “Consumers know that each week, find new products in stores.
The production cycle lasts 2 weeks where in for the rest of the industry lead times are of
several months. This leads to rapidly respond to customer needs.

Design
Rather than create trends by pushing new lines via catwalk fashion shows, Pull&Bear
prefers to follow with designs where there’s evidence of customer demand. Data on what
sells and what customers want to see goes directly to “The Cube” in La Coruña, where
teams of some 300designers crank out an astonishing 30,000 items a year versus 2,000-
4,000 items offered up at big chains like H&M (the world’s third largest fashion retailer)
and Gap14. While H&M has offered lines by star designers like Stella McCartney and
Karl Lagerfeld, as well as celebrity
Collaborations with Madonna and Kylie Minogue, the Pull&Bear design staff are mostly
young, hungry Project Runway types fresh from design school. There are no prima
donnas in “The Cube”. Team members must be humble enough to accept feedback from
colleagues, as well as share credit for winning ideas. Individual bonuses are tied to the
success of the team, and teams are regularly rotated to cross-pollinate experience and
encourage innovation.

13
Logistics

With Pull&Bear being one of the few companies utilizing in-house design and production
meant sourcing locally was its main strategy rather than switching to overseas suppliers.
This strategic choice did enhance the competitive capabilities of Pull&Bear in terms of
short lead time and effective logistics control but added to pressure from competitors who
sourced abroad resulting in competitive pricing in the middle market by rivals such as
H&M and GAP.

Logistics capability allows the company to supply clothing to all over the world within
72 hours maximum. From a traditional standpoint, the logistics of Inditex is inefficient,
meaning the cost efficiency and logistical garment. Yet it is precisely this theoretical
inefficiency due to an oversized capacity, which enables you to reduce response times,
increasing the logistical costs but getting a much greater benefit by increasing their sales
increased responsiveness makes it possible .

how does Pull&Bear know what the customers want? (Staff)

Pull&Bear’s store managers lead the intelligence-gathering effort that ultimately
determines what ends up on each store’s racks.

 PDAs
 Point of Sale System(POS)

Armed with personal digital assistants (PDAs) to gather customer input, staff regularly
chat up customers to gain feedback on what they’d like to see. For instance, a Pull&Bear
manager might casually ask, What if this skirt were in a longer length? Would you like it
in a different color? What if this V-neck blouse were available in a round neck?
Managers are motivated because as much as 70 percent of salaries can come from
commissions.

This kind of data is extensively gathered on a daily basis and sent directly to
headquarters. Then recent graduates from fashion schools are employed to design the
clothes that the consumers suggest. These designs are manufactured and shipped out to
the retail stores in as little as ten days. All of this takes place in Spain, with no
outsourced manufacturing. By avoiding outsourcing, the manufacturing time is
reduced by a significant amount.

A Point of Sales system is also used by every Pull&Bear store. The point of sales
system allows the cash register to monitor what is selling and what is not, allowing for
more popular items to appear in the store during the season in which its sales are high.
This system means that only those products which are in the highest demand will be
available in stores, therefore there is more revenue. These two methods cause most of the
apparel to sell out within a week by keeping inventory low.

14
Information and Communication Technologies

Pull&Bear’s information and communication protocols are significantly different from its
competitors. Pull&Bear spends less than 0.5% of total revenue on IT and IT employees
account for only 0.5% of Pull&Bear’s total workforce. This diffeRS from their
competitors who spend on average 2% of total revenue on IT expenditures and have 2.5%
of their total workforce devoted to IT. Pull&Bear utilizes human intelligence (from store
managers and market research) and information technology (such as their PDA devices)
in order to have a hybrid model for information flow from stores to headquarters. For
example, managers at Pull&Bear stores use handheld devices to send standardized
information regarding customer feedback and ordering needs directly to in-house
designers. This not only keeps Pull&Bear's designers informed of fast-changing customer
trends and demand, but also provides the company with insight on less-desirable
merchandise. Unlike Pull&Bear’s hybrid model (which incorporates human intelligence
and IT applications), competitors rely almost completely on information technology.
Pull&Bear’s unique approach of human intelligence assisted IT solutions results in well-
managed inventories, linkages between demand and supply, and reduced costs from
obsolete merchandise; however, there is still room for improvement in their IT processes
to realize more effective management of inventory levels. Hence, the hybrid information
and communication system that Pull&Bear uses provides cost advantages to Pull&Bear’s
operations and helps to abide by their fundamental principle to have the ability to rapidly
respond to changes in consumer demand.

Is PULL&BEAR’s Competitive Advantage Sustainable?

The fashion industry is extremely volatile, and predicting how the customers’ taste is
going to change over the next season is very valuable. Pull&Bear, managed to
differentiate its product line by responding faster to changes on the demand. Its extensive
network of stores collect information in real-time about the request for different
garments, colors and styles. The information is analyzed and within two weeks
Pull&Bear has the new models being delivered to the stores.

Pull&Bear’s core competencies mainly revolve around:

1. The high turnover of its products

2. Hard to replicate Pull&Bear business model
3. Pull&Bear takes a counter-intuitive approach made possible by their speed
4. that Pull&Bear exhibits is the vertical integration within the company
5. Low level of inventory due to Fast supply chain - 1 week final production cycle,
two day outbound logistics, fast adaptation of leading trends.
6. Scanning the fashion trends, market trends and meeting the consumer demands
relating to fashionable clothes.
7. Recruit recent graduates from fashion schools are employed to design the clothes
that the consumers suggest.

15
8. Flexible production system
9. With a creative team of more than 200 professionals, Pull&Bear’s design process
is closely to the public.
10. Pull&Bear's shops use Information Technology to report directly to its production
centers and designers in Spain. Shop managers use PDAs to check on the latest
clothes designs and place their orders in accordance with the demand they observe
in their stores.
11. A Point of Sales system is also used by every Pull&Bear store. The point of sales
system allows the cash register to monitor what is selling and what is not,
allowing for more popular items to appear in the store during the season in which
its sales are high
12. Cost leadership strategy (standardization)
13. Differentiate strategy (customization and unique competences). Pull&Bear
designs and produces as many as 10,000 new items every year.
14. In Pull&Bear shops, there are two new collections every week, and the company
manages to design, produce, distribute and sell each of its collections in just four
weeks. In contrast, its competitors take several months.
15. Pull&Bear pays special attention to the design of it stores, its shop windows and
interior décor, and locates them in the best sites of major shopping districts.
16. Gap the leading clothing retailer in the world is twelve times slower when it comes to
making a new item of clothing compared to Pull&Bear
17. Save money on advertising
18. Write offs and mark downs are non-existent

16
Threats and Weaknesses
Natural Disaster:
The biggest threat that Pull&Bear has is that it only has one manufacturing and
distribution center in the world. It is both a gift and a cuRSe. Even though it helps them
follow the counter-intuitive approach to apparel, there are huge risks associated with just
one center. If there is a power shortage, strike or even a natural disaster in the area
it will be sure to affect Pull&Bear dramatically, since the whole business relies on one
geographic region. If a natural disaster affects Pull&Bear in any way, revenues could
tank almost overnight.

Euro-centric model:
Another weakness of Pull&Bear is its euro-centric model. There is an expected over
saturation of Pull&Bear stores in Europe by 2013, which would mean that running the
stores would actually cost more money than their revenue. Secondly, the euro-centric
model coupled with one of the strongest currency in the world is causing prices of the
apparel to climb in places such as the United States. The same piece of clothing can be
up to 50% more in the US than in Spain.

Cannibalization:
A final threat to Pull&Bear is the issue of cannibalization. Pull&Bear’s extensive
location strategy
involves putting multiple Pull&Bear stores that carry the same merchandise in the
same cities. That means Pull&Bear is trying to sell the same exact merchandise to the
same people that reside in that city. For example, the two hundred and twenty-five
Pull&Bear stores in Spain can cannibalize sales from each other especially if multiple
locations are within the same city.

Products
Ask any urban European female under the age of 30 and chances are she has shopped at
Pull&Bear, the clothier whose inexpensive but stylish offerings have attracted a cult
following. Pull&Bear also sells men’s fashions, again aimed at the stylish and youthful.
Pull&Bear stores have men's clothing and women's clothing, each of these subdivided in
Lower Garment, Upper Garment, Shoes, Cosmetics and Complements, as well as
children's clothing (Pull&Bear Kids). Currently their sizing on women's clothing goes to
a US size 12 or a UK size 16 or extra-large. Over sizing is also necessary due to rapid
growth.

 60% of women’s section.

 20% of men’s section.
 20% of children’s section.

17
Pull&Bear’s Product Life Cycle Curve
Generally, a typical Product Life Cycle Curve looks like the one given in the diagram
where Sales decreases as the product moves over the time line. But as Pull&Bear is in a
high fashion industry and its product offering are the latest trends and designs with a life
of maximum 5-6 weeks so its Product Life Cycle Curve becomes like the one given in
next diagram.

18
Shortening the product life cycle means greater success in meeting consumer preferences.
If a design doesn't sell well within a week, it is withdrawn from shops, further orders are
canceled and a new design is pursued. No design stays on the shop floor for more than
four weeks, which encourages Pull&Bear fans to make repeat visits. An average high-
street store in Spain expects customers to visit three times a year. That goes up to 17
times for Pull&Bear.

Market entry:

19
The logical next step was to assess how to enter in the host country market. In contrast to
Spain, where all of Pull&Bear’s stores were company owned and managed, three
different modes of market entry were used internationally:

 Company-owned stores
 Joint ventures
 Franchise
Pull&Bear usually employed just one of these modes of market participation in a
particular country, although it did sometimes shift from one to another. Thus, it entered
Turkey via franchising in 1998, but had acquired ownership of all its Turkish stores in
1999.
Pull&Bear typically established company managed stores in key, high-profile
countries with high growth prospects and low business risk. As a result, Pull&Bear
had used two other modes of market entry, franchise and joint ventures in about half the
countries it had entered since 1998.
Pull&Bear tended to use franchises in countries that were small, risky or subject to
significant cultural differences or administrative barriers. Franchise contract typically
ran for 5 years and franchisees were generally well-established, financially strong players
in complementary businesses. In return for selling its product to franchisees and charging
them a franchise fee that typically varied between 5% & 10% of their sales, Pull&Bear
offered franchisees full access to corporate services such as human resources, training
and logistics to no extra cost.
Pull&Bear used joint ventures in larger, more important markets where there were
barriers to direct entry, most often ones related to the difficulty of obtaining prime
retail space in city centers. For instance, Pull&Bear stores in Germany and Japan were
managed through joint ventures, one in each country. Interests in both ventures were split
50:50 between Pull&Bear and its partners.

Country Selection
We have selected our country Pakistan. We bring this luminary of fashion in our country.
In our country (Pakistan), the demand and trend of fashion is now getting more
composite, people are getting more aware of fashion trends, quality and brand conscious.
There are very few brands in Pakistan that are coping with the domestic wants like Stone
age, Crossroads and Maria B etc. and we believe that there is a plenty of room to get
enter in this market. The mode that is used officially by the company is “Franchise” and
Pull&Bear’s targeted customers are people who seek for higher quality clothing products
at reasonable prices. We have an idea to open 2 outlets in Pakistan first, one in Lahore
and second is in Karachi.

Culture of Pakistan
Location:
Southern Asia, bordering Afghanistan 2,430 km, China 523 km, India 2,912 km, Iran 909
km

20
Population:
159,196,336 (July 2004 est.)
Ethnic Make-up: Punjabi, Sindhi, Pashtun (Pathan), Baloch, Muhajir (immigrants from
India at the time of partition and their descendants)

Language in Pakistan:

 Urdu is the only official language of Pakistan. Although English is generally used
instead of Urdu in this regard. English is the lingua franca of the Pakistani elite
and most of the government ministries.
 Urdu is closely related to Hindi but is written in an extended Arabic alphabet
rather than in Devanagari. Urdu also has more loans from Arabic and Persian than
Hindi has.

 Many other languages are spoken in Pakistan, including Punjabi, Siraiki, Sindhi,
Pashtu, Balochi, Hindko, Brahui, Burushaski, Balti, Khawar, Gujrati and other
languages with smaller numbers of speakers.

Islam:

 Islam is practised by the majority of Pakistanis and governs their personal,

political, economic and legal lives.
 Among certain obligations for Muslims are to pray five times a day - at dawn,
noon, afternoon, sunset, and evening.
 Friday is the Muslim holy day. Everything is closed.
 During the holy month of Ramadan all Muslims must fast from dawn to dusk and
are only permitted to work six hours per day. Fasting includes no eating, drinking,
cigarette smoking, or gum chewing.

The Family Map of Pakistan:

 The extended family is the basis of the social structure and individual identity.
 It includes the nuclear family, immediate relatives, distant relatives, tribe
members, friends, and neighbors.
 Loyalty to the family comes before other social relationships, even business.
 Nepotism is viewed positively, since it guarantees hiring people who can be
trusted, which is crucial in a country where working with people one knows and
trusts is of primary importance.
 The family is more private than in many other cultures.
 Female relatives are protected from outside influences. It is considered
inappropriate to ask questions about a Pakistani's wife or other female relatives.
 Families are quite large by western standards, often having up to 6 children.

Meeting and Greeting:

21
  Greetings are therefore often between members of the same sex; however, when
dealing with people in the middle class, greetings may be across sex lines.
 Men shake hands with each other. Once a relationship is developed, they may hug
as well as shake hands.
 Women generally hug and kiss. Pakistanis take their time during greetings and ask
about the person's health, family, and business success.
 Pakistani names often include a name that denotes a peeron's class, tribe,
occupation, or other status indicator.
 They may also include two names that have a specific meaning when used
together, and the meaning is lost if the names are separated. . It is best to ask a
person how they wish to be addressed.
 In general, this is not a culture where first names are commonly used, except
among close friends.

Gift Giving Etiquette:

 If invited to a Pakistani's home, bring the hostess a small gift such as flowers or
good quality chocolates.
 Men should avoid giving flowers to women.
 Do not give white flowers as they are used at weddings.
 If a man must give a gift to a woman, he should say that it is from his wife,
mother, sister, or some other female relative.
 Do not give alcohol.
 Gifts are not opened when received.
 Gifts are given with two hands.

Business Etiquette & Protocol in Pakistan:

 Building Relationships & Communication Customs in Pakistan

 Third-party introductions are a necessity in this relationship-driven culture.
 Pakistanis prefer to work with people they know and trust and will spend a great
deal of time on the getting-to-know-you part of relationship building.
 You must not appear frustrated by what may appear to be purely social
conversation. Pakistanis are hospitable and enjoy hosting foreign guests.
 Relationships take time to grow and must be nurtured. This may require several
visits.
 Pakistanis often ask personal questions as a way to get to know you as a person.
 If possible, it is best to answer these questions.
 Pakistanis do not require as much personal space as most western cultures. As
such, they will stand close to you while conversing and you may feel as if your
personal space has been violated. Do not back away.
 Pakistanis are generally indirect communicators.
 Always demonstrate deference to the most senior person in the group. In general,
Pakistanis speak in a roundabout or circuitous fashion. Direct statements are made
only to those with whom they have a long-standing personal relationship.

22
  They also use a great deal of hyperbole and similes, and go out of their way to
find something to praise.
 Be prepared to flatter and be flattered.
 Pakistanis prefer to converse in a non-controversial manner, so they will say they
"will try" rather than admit that they cannot or will not be able to do something.
 Therefore, it is important to ask questions in several ways so you can be certain
what was meant by a vague response. Silence is often used as a communication
tool.
 Pakistanis prefer to do business in person. They see the telephone as too
impersonal a medium for business communication.

Business Meeting Etiquette:

 Appointments are necessary and should be made, in writing, 3 to 4 weeks in

advance, although meetings with private companies can often be arranged with
less notice.
 The best time to schedule meetings is in the late morning or early afternoon.
 If at all possible, try not to schedule meetings during Ramadan. The workday is
shortened, and since Muslims fast, they could not offer you tea, which is a sign of
hospitality.
 You should arrive at meetings on time and be prepared to be kept waiting.
 Pakistanis in the private sector who are accustomed to working with international
companies often strive for punctuality, but are not always successful.
 It is not uncommon to have a meeting cancelled at the last minute or even once
you have arrived.
 In general, Pakistanis have an open-door policy, even when they are in a meeting.
This means there may be frequent interruptions. Other people may wander into
the room and start a different discussion.
 Meetings are formal.
 Business meetings start after prolonged inquiries about health, family, etc.
 Never inquire about a colleague's wife or daughters
 During the first several meetings, business may not be discussed at all as the
relationship is still being developed.
 Maintain indirect eye contact while speaking.

Negotiating:

 Companies are hierarchical. Decisions are made by the highest-ranking person.

 Decisions are reached slowly. If you try to rush things, you will give offense and
jeopardize your business relationship.
 The society is extremely bureaucratic. Most decisions require several layers of
approval.
 It often takes several visits to accomplish simple tasks.
 If you change negotiators, negotiations will have to start over since relationships
are to the person and not the company that they represent.

23
  Pakistanis are highly skilled negotiators.
 Price is often a determining factor in closing a deal.
 Pakistanis strive for win-win outcomes.
 Maintain indirect eye contact while speaking.
 Do not use high-pressure tactics.

Pakistanis can become highly emotional during negotiations. Discussions may become
heated and even revert to Urdu (the national language). It is imperative that you remain
calm.

Business Card Etiquette:

 Business cards are exchanged after the initial introduction.

 Include any advanced university degrees or professional honors on your card, as
they denote status.
 Business cards are exchanged using the right hand only or with two hands.
 Make a point of studying any business card you receive before putting into your
business card holder.

24
 Marketing

Marketing Segmentation
Pakistan is state where different cultures have their own living styles and way of
consuming according to their region where they are living. So, it is understood that when
any multinational company is coming there it has to got insights of consumption patterns
of people there. This same is true for Pull&Bear and from above background information
of Pull&Bear processed we know that to go into different market they do proper market
research while enter into any country. Pakistan has four provinces and each have unique
set of beliefs about dressing, eating etc.

Market segmentation aims to provide relevant information for a basis for the selection of
target markets (Bradley, 2005). Pull&Bear’s targeted customers are people who seek for
higher quality clothing products at reasonable prices. In this case targeted Pakistani
customers were those who expressed interest in European branded clothes.

Target market
After analyzing the brand significance and worth of it in the customers mind we have
decided to target those customers who are brand conscious and feel satisfaction from
multinational brands. So, with this point of view we target Lahore and Karachi firstly.

Why Lahore & Karachi?

Lahore is the heart of Punjab. And Karachi The fashion storm is on high speed there.
People are now more brands conscious and few brands are rejected there. As our brand
PULL&BEAR is on top name in fashion sector so we can expect that people are quickly
link up with us. Lahore and Karachi is one of the city where people devour on foods and
of course clothes. Big brands like Chen-one, Outfitters etc are earning maximum profit
but we believe that our people wants are not perfectly fulfilled by these brands. There
may be many reasons might be lack of technology, lack of skilled personnel, R&D etc. So
we are coming up with one of the most leading brand name of fashion”PULL&BEAR”.

As our target market are those people who hunt for higher quality clothing products at
reasonable prices. So it’s evident that people have a buying power in these two cities
particularly. The people belong to this segment are less price conscious and the funny part
is that people are not satisfied until and unless they spend more money on the product
mean product should be bit expansive. Nevertheless, people are more brands conscious
that become the fashion industry more dominated. So the prices of our product are
affordable by upper class and elite class especially. We believe that if we are offering the
fine quality and unique design to people, people will not overlook this

25
This is arguably the case for buying activity in the clothing sector with brand name, price,
style as well as quality tending to have important effects on the decision making
processes leading to purchasing. First of all Pull&Bear’s women collection is divided into
three categories:

 Pull&Bear Women,
 Pull&Bear Basic

 the sporty Trafaluc

Representing market segments for women who look for a more formal style, younger
women for a more informal style and younger women and teenagers while menswear
included

 Men’s Line at Pull&Bear

 Pull&Bear Basics
 its club-wear brand 100Pull&Bear

 Pull&Bear Sport

Cost
Stores:

Rent of the Karachi store: 250,000/month and 500,000 as advance

Rent of the Lahore store: 200,000/month and 600,000 as advance

Total rent of six month of Karachi store is: 250,000*6+500,000=20,00,000

Total rent of six month of Lahore store is: 200,000*6+500,000=17,00,000

Total amount in term of rent is: PKR 37,00,000

Equipment Cost:

Expected Equipment and furnishing cost for both the store is PKR 25,00,000

HR:

We need to hire fifty persons initially for different departments and we allocated the
budget of PKR 20,00,000 for the six month of their salaries.

Clothes:

Initially we will import clothes of PKR 100,00,000 from Pull&Bear’s Thailand

production plant.

26
Marketing:

We have allocated of PKR 50,00,000 for marketing through Television Ad, E-marketing,
Bill Boards etc.

Total cost:

Total initial cost we need is: PKR 2,32,00,000.

PULL&BEAR’S Customer & Product Offer

Pull&Bear’s Customer Segment:

LOW COST FASHION FOR THE 16 TO 24 YEARS OLD

Low Cost Fashion

Get it approximately right Respond to what customer –create a

demand chain

Eliminate creative design Copy trendy fashion fast

Fast-response supply chain include design Create a store experience

Finalize design knowing material supply Create a network/ brand

constraints

Optimize the supply process for speed and

cost

Manage follow-up (next batch) and

customers flow

27
Pull&Bear’s Customer Offers:

FRESH / FAST
QUALTIY COST
Fast copying of leading Raw material: medium Low monetary cost
style
Fast delivery in own stores  Knit poor Low time cost:
Limited editions  Look: grand!
The Pull&Bear experience
Customer satisfaction

Fashion at low price

Pull&Bear’s Product Offers:

Product offer
High customization High standardization
Low volume High volume
Supply Process High unit margin Low unit margin
High quality Low quality

High Fashion: Out of

Price
Flexible Process

Rigid Process
PULL&BEAR M&S: Out of Fashion

Marketing Strategy- Advertising & Promotion

PULL&BEAR. The key is not to sell clothes, but fashion. Having a high component of
differentiation in the design helps the company to sell so much faster. Also, through the
production of small series and putting satisfy all demand of some products; Pull&Bear
has managed to deceive consumers into buying. Pull&Bear, based most of its production
on what the client is demanding at any time, virtually on demand manufacturing of a shop
(pull strategy).

Pull&Bear’s marketing strategy focuses on product variety, speed-to-market, and store

location.. Pull&Bear does not advertise in the traditional sense. Pull&Bear puts 10,000
different items on the store shelves in a single year. It can take a new style from concept
to store shelf in 10-14 days in an industry where nine months is the norm.

28
If a Pull&Bear customer wants to know what Pull&Bear has, he or she must go to the
store. The stock changes often, with most items staying on the shelf for only a month, so
the customer often finds something new and appealing. By the same token, if the
customer finds nothing to buy this visit, the store’s regular customers know that
tomorrow or next week—sometime soon—new goods will be on Pull&Bear’s shelves.
That makes it worth another visit.

Pull&Bear spends 0.3% of its sale on advertising compared to an average 3.5% of its
competitors. Only about 18% of PULL&BEAR clothing does not work with its
customers and has to be discounted, that’s half of the industry’s average which is 35%.

Pull&Bear relies heavily on store employees for market information. If a customer looks
at a sweater and comments, “That would look really nice with a cowl collar,” an
employee can relay that information to Spain where managers decide whether or not to
produce the suggested item. If they decide to make it, they can put it on the shelf in
Toronto in two weeks or less, partly because they ship by air. Ocean shipping would add
at least another ten days to the time it takes to get the product in front of the customer.

Lastly, in order to keep the stores looking fresh and trendy; Pull&Bear invests heavily in
their store layouts. They have a testing facility nearby their headquarters in Spain where
different types of store layouts are tested. Each Pull&Bear store is remodeled every 5
years in order to keep up with current trends. Pull&Bear does not invest heavily in direct
marketing, though their efforts in image/brand marketing do a great deal to attract a loyal
customer base. Their cost advantage and ability to maintain brand recognition and
customer loyalty are essential elements of Pull&Bear’s capabilities that build value in the
company.

PEST Analysis

As we are coming up with the leading brand of fashion industry “PULL&BEAR”. There
are much instability, security issues and other major constraints in Pakistan that we
should know about them. The PEST analysis is elaborated under:

Political Factors:
The political condition of Pakistan is very pathetic and weak. Securities issues are one of
the biggest threats for Pakistani nation. Due to this, Pakistanis business in every field
faces the major losses and the development of business is critical in this stage. Bomb
blasting and terrorists attack spread a large fear among people and it also halts the
business opportunities. Now a days as business are closing about 8 a:m so business
people faces much difficulties and the profit ratios of small business also tend to
decrease. People are avoiding going for hanging out and for shopping in major markets of
the cities. Political conditions in Pakistan are very unstable. Huge taxes are imposed on
the business but the facilities which are providing are not up to the mark. The one reason

29
for such things is lack of leadership, ambiguous rules and regulation by the government
etc.

Economical Factor:
Unstable economy of Pakistan will have negative effects. Pakistan is a developing
country and the economic position of the country is depressing. It depends heavily on
foreign loans and aids. But unfortunately, Today Pakistan is almost bankrupt and foreign
donoRS have also refused to provide any more aid until Pakistani government cuts its
defense expenditure. If the Pakistani government decides not to cut defense expenditure
then the only other option it has is to keep on printing currency which will result into
even higher inflation. Inflation is running at about 20 per cent according to many
estimates. And my own prediction is that inflation can reach 100 per cent a year in 2 to 3
years. This means that price of every thing will double every year. The Overpopulation,
Inflation & Unemployment are also needed to recover.
The trade deficit of Pakistan is increasing day by day. Country imports are high
comparatively to its exports and Pakistan is unable to meet the domestic demands.

Social:
Pakistani people are more inclined toward family oriented people. People like to have
joint family system there. But it’s difficult to survive with number of family person so
this system is also diminishing in Pakistan. There is extensive need for the development
of infrastructure. People like desi foods, and like to spend good time with their family
members. Pakistan is a developing nation , and face a lot of social issues of which
includes child labor, poverty, illiteracy, terrorism, population growth, smuggling,
Demographic transitions and discrimination of sex etc.

Technological:

People of Pakistan is warmly welcome such technology that reduce their work, improve
their life style, make their work easier etc. Technology will play an important role in
other words we can say that it is the essence of once country progress. Information
Technology is the back bone of our company .but there are many issues regarding
technologies such as load shading, energy crisis, water problem and lack of R & D in
Pakistan.

Environment Policy
Pull&Bear is committed to protecting the environment through its corporate
responsibility policy. Pull&Bear pursues initiatives at store and product manufacturing
level, and in customer services.

30
  Store level initiative include eco-efficient stores, energy saving and waste
management.
 Product Manufacturing includes ecological fabrics and organic cotton.
 Customer services include biodegradable plastic and PEFC-certified paper bags.

Legal framework of business operations

Pakistan ensures a most effective system of protection of all rights in the fields of
intellectual property. To equip the country with a mechanism recognising, protecting and
enforcing intellectual property rights in all fields of industrial and economic activity,
Pakistan has complied with almost all its obligations under the TRIPs Agreement, mostly
by promulgation of entirely new laws to replace the old laws, and, in the case of
copyrights, by incorporation of necessary amendments to the existing law.

Even in the pre-WTO and TRIPs scenario, Pakistan has always been a country which had
ensured most effective protection of intellectual property rights and the Pakistani
judiciary in some cases had laid down principles which were not even available in
various leading modern industrialised countries, as Pakistani courts welcome well-
reasoned new jurisprudential concepts.

There have been certain instances where, even in the absence of a clear-cut statutory
provision recognising any specific type of intellectual property right, the courts of
Pakistan, while resorting to certain broad outlines, either available under the principles of
equity or otherwise broadening the scope of various provisions available in the Pakistan.

Patents
The old law on the subject of patents, namely the Patents and Designs Act 1911, was
repealed and the new Patents Ordinance 2000 (Patents Ordinance) was broadcasted,
incorporating almost all the requirements of TRIPs.

Salient features of the new Patents Ordinance can be summarised as follows:

• Product patent filing was made possible.

• Elaborate criteria for patentable inventions were provided, including the requirement of
industrial application.

• Novelty requirement was changed from local to international disclosure.

• Term of patent was increased from 16 years to 20 years.

• Exclusive marketing rights (EMR) were made available for inventions covered by
black-box applications for pharmaceutical and agricultural chemical products.

31
• A system of effective provisional measures against infringement of patents was
provided.

• Effective border measures were also introduced.

• Lifting/removing of the infringing product by government authorities wherever lying.

• Arrest and detention of the directoRS/partneRS/principal officeRS of the defendant

company.

• Attachment and sale of properties of the defendant company as well as properties

owned by its directors/partners/principal officers.

Trademarks
The (old) Trade Marks Act 1940 was replaced by the Trade Marks Ordinance 2001
(Trademarks Ordinance), which, though promulgated in 2001, was enforced in the year
2004.

The Trademarks Ordinance, while incorporating all requirements of TRIPs, in addition to

all other rights available under the previous enactment, has introduced the following
salient features:

• The provisions for registration and enforcement of service marks.

• Registration of trademark in one class to enable the owner to prevent use of the same
trademark for same or similar description of goods falling in other classes.

• Registration of a trademark to be deemed sufficient to prevent infringement for use of

the same as a service mark and vice versa.

• Effective border measures.

• Effective measures ensuring unfair trade competition.

• Effective measures preventing comparative advertisement.

• Protection of well-known trademarks under the Paris Convention.

• Provisions relating to destruction of infringing goods or otherwise removing offending

trademarks from such goods.

• The foreign principal (Pepsico Inc) was well within its rights to terminate the franchise
agreement in the manner provided by the agreement itself.

• The local franchisee was under a statutory obligation to render faithful accounts to its
foreign principal for the business conducted.

32
• Even where the local franchisee has made a large investment in its business, upon
termination of the franchise agreement, the franchisee cannot be allowed to continue use
of the trademark on request that by making the investment, the agreement became final
by the principal.

• The franchisee in Pakistan was also restrained from using the trademark PEPSI
although for some time it was using concentrate of RC Cola.

Above mentioned decisions will give much confidence to Pull&Bear to enter into joint
venture or franchising arrangement, as, in appropriate cases, they can ensure that their
arrangements with the local licensee can be effectively terminated.

Copyright
Rather than repealing the old law, the Copyright Ordinance 1962, with an object to
incorporate the requirement of TRIPs, the existing law was appropriately amended by the
Copyright (Amendment) Ordinance, 2000. The salient features, which emerged after
amendment of Copyright Ordinance, are:

• Rights in audiovisual works in addition to dramatic and cinematographic works as well

as musical works were recognised.

• The definition of literary work was changed to include works relating to physical
sciences, compilation of data, as well as computer programs.

• Protection was given to owneRS of copyright in relation to computer programs, and

cinematographic works were recognised with reference to rentals.

• Effective border measures were introduced to prevent infringement of copyright

through importation and exportation of infringing material.

• Effective provisional measures were also introduced

Porter’s diamond five forces model:

Firm strategy
structure and rivalry

Factor Diamond
condition condition

33
Related and
supported industries

34
Factor condition:

Pakistan is a country where resourced are available and also has technological base for
doing business efficiently. Pakistan has very good textile industry that is why number of
clothing brands is working here and has established a good position in the market.
But in case of Pull&Bear there is need of high information technology tools and
techniques which are required to meet its competitive position.

Demand condition:

In Pakistani market there are number of fashion brands are operating in lahore and
Karachi market. They all are well recognized and have established position in the market.
But still there is enough room available in the market because fashion trend is always on
the changing hand and it change abruptly. This trend predicts about demand from the
consumer side.

Related and supported industries:

In Lahore and Karachi constantly changing lifestyles of people ensures that there is
significant growth of the business holds. So, in order to compete with already working
brands Pull&Bear has to come up with new design which is already one of its
competitive advantages has over its rivalry.

Firm strategy, structure and rivalry:

Pull&Bear has a unique set of doing business. They have centralized system from where
they hold all strategic decisions. Their design of products, deliveries and information
techonology structure all controlled by centrally organized network from which they
compete against its world rivals like H& M and gap but to compete at local level in
Pakistan they has to change its strategies like they have to decentralized some of its
systems to capture the customers demand.

Difference between economic systems of Pakistan and

Spain:

Pakistan economic system is very unstable that is why prices of goods changes quickly.
To control economy of the country there is always need to get loan from IMF which puts
negative impact on the growth of the economy and increase inflation rate in the country
because IMF grants loan on the basis of some restriction like;

o To increase the tax base of the economy

o To remove subsidies from the industries

35
These factors always cause the devaluation of the currency which affects international
trade in negative ways. So, in Lahore and Karachi prices of Pull&Bear little bit be on the
changing side.

Whereas euro value against Pakistani rupees is 105 which shows that economy of Spain
is in good position as compare to Pakistan. Spain was a poorest country in the European
countries before it had joined European Union in 1986. At this time their economies is
stable and have opportunities to grow in the final end.

Human resource aspect:

As we have studied the culture of Pakistan and economic system of two countries we
came to know that both countries have big difference in each of these two factors. No
doubt we are opening a franchisee but Pull&Bear has to recruit employees from the host
country as language, tradition, cognitive pattern, lifestyle is different. So, part of human
resource will be handled in the host country Pakistan.

Yes, training of employees should be done back at Spain so that they can understand how
to manage the franchise and what are core principle organization have which needs to be
covered so that difference in processes can be carried. A strategy of Pull&Bear which
they use in designing clothes can be implemented here because group work in Pakistanis
is also has importance.

In Pakistan, to improve the skills of employees and motivation level compensation will
be more effective tool as per the requirement of the job.

General attitude and policies of the host government:

In Pakistan, there are numbers of multinational organizations already operating and

government of Pakistan do welcome because this will improve
Pakistan government always welcomes foreign investment in the country to groom its
industry.

The government of Pakistan offers a package of incentives for attracting foreign

investors. As part of its commitment to private sector led growth, the government, during
the 1990s, undertook a comprehensive program of radical economic reforms, including
liberalization, privatization and deregulation, thus creating an enabling environment for
the private sector. Pakistan has an ambitious privatization program that is expected to
generate $4 billion in the medium term.

A legal frame work has been provided for the first time, to impart transparency to the
process, and a medium term privatization program listing on public sector enterprises that
will be privatized has been formulated. This program has a wide ranging and diveRSe
portfolio comprised of energy and power utilities, oil and gas development distribution
companies, banks, DFIs and industrial units.

36
Conclusion:

At the heart of Pull&Bear's success is a vertically integrated business model spanning

design, just-in-time production, marketing and sales. The key to this model is the ability
to adapt the offer to customers desires in the shortest time possible. For Pull&Bear , time
is the main factor to be considered, above and beyond production cost. The group
believed that vertical integration gave it more flexibility than its rivals to respond to
fickle fashion trends. With the European markets becoming saturated, Pull&Bear had
been looking at stretching its product line and furthering its global expansion.

37
Recommendation:

A final recommendation for Pull&Bear is to offer specialized products for different

geographic
locations within the same city. Pull&Bear already does this to an extent for different
international preferences but more specialization will increase consumer demand and will
motivate them to visit more Pull&Bear locations within their own region. In some cities
the company is possibly experiencing cannibalization because there are too many
Pull&Bear stores that carry the same product within one city. Pull&Bear could
differentiate its product from location to location to increase shopper traffic. This would
work because shoppeRS would hear about new/different products (possibly from word of
mouth or increased advertising) that another Pull&Bear store is carrying across the city
and they would be intrigued to pay a visit. That way sales wouldn’t be stolen from their
own Pull&Bear stores, decreasing cannibalization for the chain.

38