Applied Corporate Strategy

APPLIED CORPORATE STRATEGY

CONTENTS
INTRODUCTION..........................................................................................................................................................1
MAIN BODY..................................................................................................................................................................1
1.External analysis..................................................................................................................................................1
2. Internal analysis.......................................................................................................................................................5
3. Evaluation.................................................................................................................................................................7
CONCLUSION..............................................................................................................................................................8
REFERENCES.............................................................................................................................................................8

INTRODUCTION
Corporate strategy can be defined as that series of action which is been adopted by
various organizations so that they can manage their resources well, and these
strategies also assist them in achieving their goals and objectives (Rugman. and
Verbeke, 2017). This also helps them in gaining a competitive advantage. It mainly
encompasses those activities that can support organization in their development. It is
necessary to adopt different strategies with the change in market situation so that
business can sustain for a long time. The report will emphasize Zara and evaluate their
online strategy. Zara SA is a Spanish apparel retailer based in Arteixo in Galicia. Zara is
part of Inditex, one of the largest fashion retailers in terms of sales in the world.
(Hanbury,2018). The main purpose of the report is to analyze the business environment
of Zara to gain effectiveness of their corporate strategy. It will also identify and discuss
organizations resources and unique capabilities. It will also evaluate market
development strategy that has recently been adopted by the company.
1.EXTERNAL ANALYSIS
There are various external factors that can affect the working of the organization, these
factors can act as an opportunity or threat for them.
Political factor: Political disruption has affected Zara and also the economy of the
nation. It has been analysed that political turmoil has severely affected the supply chain
of the company and has given rise to several problems for the brand. To overcome this
threat Zara has limited their supply chain operations to UK and neighbouring nations.
The brexit impact may be a threat to zara as it will impact on their growth in UK
market. As there will be change in government policies and procedures can also affect
the operations of business internationally. (Zerfass. and Viertmann, 2017).
Economic factor: Economic condition of any country can affect the business of the
organization. The factors are related to GDP, inflation rate, economic growth, etc. It has
always been a critical factor in terms of business, Zara has taken it as an opportunity
and adopted a great strategy which is known as affordable pricing. So due to Brexit
GDP of UK will decline which can be a threat to company (Slack. and Brandon-Jones,
2018).
Social factor: Zara is focused on its affordability as Zara is considered one of the
fashionable brands for most of the shoppers. According to Zara good quality product
doesn't need lots of money as it has the positive strong presence that enables Zara to
collect the profit margin regarding its stakeholders as buyers feel that are getting the

best deal. Another threat is frequent change in customer taste and preferences in
fashion, which may impact on Zara growth. (Zerfass. and Viertmann, 2017).
Technological- Zara is a well-known brand as it is the most popular brand in terms of
affordability and high quality. Zara has both a large amount of audience and money
required to get the most data. The company is looking out for big data as it implements
the RFID technology which automatically counts the products without stand in a queue
and customers feel more relaxed. Technological advancement of Zara is a better
opportunity to reach and appeal the costumers. There lies a vast number of
opportunities for Zara in the e-commerce sector. It can focus on online selling of goods
as well as to attract more customers and earn revenue. They can expand in those target
market where people buying power is rising. For example, a market like India. it will
enable in increasing customers base and capitalizing market potential.
Legal
Zara is one of the recognizable brands as it has to operate in-bounds regarding the law
as Zara is the one that loves to capture the trends of hot clothes every week and also
make them more affordable to the Costumers so Zara is bound to run some issues
regarding the copyright. As various retailer accused Zara of stealing the design as well
as clothing concepts from the firm like Balenciaga and Adidas, Zara had faced
uncomfortable situations, which can be a threat to company (Danziger, 2018)
Environmental
Feasible development has ended up a necessity for any trade to outlive in a worldwide
environment. Zara contributes to a great extent in sustainability. Inditex is pulling
towards making the stores a hundred per cent productive. They will offer assistance in
sparing energy and reusing. It too works towards removing dangerous waste delivered
from its production. They have also created a line of design- wear which centres on
sustainable clothing.
Porter five force
Competition within Industry - High
Benton, GAP, H&M are the biggest competitors of Zara. The brands are recognized by
being affordable and fashionable. Zara's sales are higher than Benton's and GAP's but
similar to H&M's. Zara's supply chain is more responsive as various other retailers take
months to change their old fashion clothes but Zara changes its collection within
2weeks. Thus Zara is well known for the latest trends, the current change in customer
tastes and preferences can affectZara’s revenue. (Eccles and Youmans, 2016). With