Case of study - Part A:

Smart Designs (SDCM) Clothes manufacturers was founded in Dubai, in 1995 to make high-quality clothing for outdoor sports, such as hiking, skiing, fly-fishing, and white-water kayaking. SDCM offers its products through three retailing options: catalogs, retail outlets, and its website. The Company strives to provide excellent, high-quality products at reasonable prices. The Company offers its products principally through regular mailings of its monthly catalogs in the UAE, Jordan, Europe, and USA, SDCM has 10 UAE outlet stores, four in the USA, two in Germany, and two in Jordan. The Company also offers its products over the Internet (www.sdcm.com). During 2011, the Company expanded its global presence by launching sites in Italy, Ireland, and several eastern European countries.

Outdoor Clothing Industry

During 2015 the Company mailed 12 issues of its regular monthly catalog with an average of 75 pages per issue from its UAE operations. Worldwide, the Company mailed approximately 160 million full price catalogs. SDCM views each catalog issue as a unique opportunity to communicate with its customers. Products are described in visual and editorial detail, and the Company uses such techniques as background stories and distinctive covers to stimulate the readers interest. Each issue of the regular catalog offers certain basic product lines for men and women.

Customer databaso

A principal factor in the Company's success has been the development of its own list of active customers, At the end of 2015 the Company's mailing list consisted of about 21.1 million persons, approximately 7 million of whom were viewed as customers because they had made at least one purchase from the Company within the last 24 months. The Company routinely updates and refines the database before mailing catalogs to monitor customer interest as reflected in criteria such as the recency, frequency, dollar amount, and product type of purchases. SDCM believes that its customer database has desirable demographic characteristics and is well suited to the products offered in "the Company's* catalogs. A survey conducted by the Company in the United Arab Emirates during 2014 indicated that approximately 50 percent of its customers were in the 35-54 age group and had median incores of ED 350,000. The Company advertises nationally to build its reputation and to attract new customers.

Product development

SDCM concentrates on clothing and other products that are aimed at customers interested in outdoor activities. The Company's products are styled and quality crafted to meet the changing tastes of the Company's customers rather than to mimic the changing fads of the fashion world. At the same time, the Company seeks to maintain customer interest by developing new products, improving existing core products, and reinforcing its value positioning. The Company continues to incorporate innovations in fabric, construction, and detail that add value and excitement and differentiate SDCM from the competition. In order to ensure that products are manufactured to the Company's quality standards at reasonable prices, product managers, designers, and quality assurance specialists develop the Company's own products. SDCM deals directly With its suppliers and seeks to avoid intermediaries. All goods are produced by independent manufacturers except for most of its soft luggage, which is assembled at the Company's facilities, During 2015 the Company purchased merchandise from approximatoly 300 domestic and foreign manufacturers. One manufactun)r and one intermediary accounted for about 14 and 29 percent of the Company s recalved merchandise, respectively, in 2015. In 2015 about 80 percent of the Company's merchandise was imported, mainfy from Asia, Central America, Mexico, and Central America. The Company will continue to take advantage of worldwide sourcing without sacrificing customer service or quality standards.

Accounting and Control Systems

With the complexity of SDCM's custorer database reaching 21.1 million people, and sales occurring through catalogs, retail outlets, and the internet, the company realized in early 2011 that it was in need of a new, upgraded accounting information system. The company switched to a new, integrated central accounting systern in early 2012. The transition to the new system was overseen and implemented by the former controller, Brad Norton. This new system maintains integrated inventory, accounts recelvable, payroll, and general ledger software modules. Although the implementation of the new system was expensive and laden with problems, by the 3rd and 4th quarters of 2012 the problems were largely resolved and the company began to see the benefits. The new system integrates the company's operations and accounting systems and allows SDCM's sales force to promise next day delivery to telephone and internet customers. As a result, customer satisfaction has increased.

1. What are the entity's major sources of revenue, including the nature of its products and/or services?

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2. Who are the entity's key customers?

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3. Who are the entity's key suppliers?

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4. What is the entity's organizational structure?

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5. Where are its major locations?

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