Corporate Strategy: Opportunities and Threats for Zara

Applied
Corporate
Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1. External analysis to identify set of opportunities and threats.............................................1
2. Internal analysis..................................................................................................................4
3. Strategy Evaluation ...........................................................................................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Corporate strategy is the action which an organisation take with the motive of
accomplishing objectives as well as for gaining competitive advantages (Foucault and Frésard,
2019). In addition to this, corporate strategy estate a clear long term vision that has been set by
business firm and seek for creating corporate values and also for motivation of staff for applying
suitable action to gain customer satisfaction. In other words, corporate strategy is continuous
process which require constant efforts by company for engaging their investors in trusting
business with their money. It will assist company in increasing business equity.
This report is based on Zara which is part of retail industry and specialised in fast fashion
by including products like accessories, clothing, shoes, perfumes, beauty and many more. Zara
was founded in 1975 by Amancio Ortega nad Rosalia Mera. Its headquarter is located at Arteixo
Spain but they are serving at worldwide level. Respective assessment will conduct external
analysis for identifying opportunities as well as threats which are available in market for
company. In addition to this, internal analysis will also conduct through VRIO model for
analysing strength and weakness. Furthermore, strategic evaluation will also going to conduct by
implementing SAFe framework.
MAIN BODY
1. External analysis to identify set of opportunities and threats
External analysis simply means examining industry environment of an organisation
which include factors like competitive position, dynamic, competitive structure, history and
many more (Köhler and Zerfass, 2019). At macro scale external analysis involves global,
political, social, dynamic as well as technological factors. Primary purpose for conducting
external analysis is to identify the threats and opportunities which are available in segment and
derive profitability, growth as well as volatility of business.
PESTLE analysis.
 Political Factor: This is said to be one of the crucial factor of the external environment
which determines operations of an organisation. The political environment in United
Kingdom is stable enough which causes minimum disruption in the operations of
business and acts as an opportunity to expand their operations however Brexit have
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causes some uncertainties in the political environment which can act as a challenge for
businesses.
 Economic Factor: The economic factor takes into consideration turnover, productivity
and disposable income of target market (Palazon, El Ajjouri and Bolink, 2019). In
context of United Kingdom. GDP per capita income of citizens is believed to be one of
the highest in the Europe. The availability of fund is considered to convenient as well and
businesses does not face any challenge when it comes to raising funds for daily
operations. UK has been a popular destination when it comes to availing Foreign direct
investments from other nations.
 Social Factor: This factor focuses on changing trends and preferences of the people
residing in the UK. This country is known to be an ideal consumer market as there are
higher number of birth than death and also due to purchasing power of people. The
multicultural people poses an as opportunities for a business to launch their distinct
products and services.
 Technological Factor: Technology have become one of the crucial factor in external
environment which is to be considered by an organisation. UK have been one of the most
technically advanced nation and carries a strong technology based infrastructure.
Therefore it is an opportunity for a business to launch their products through online
platform of buying and selling. Zara can take advantage of online purchasing trends as
well as making availability of clothes not only on their stores (Dahl and Fløttum, 2019).
They also want their products on other E-Commerce stores which result in enhancement
in their sales. But on the contrary, frequent update in the technology will cost huge funds
to business. s
 Legal Factor: There are certain legislation which are to be conformed by a business such
as Employment Act 1996, laws relating to maternity, compensation and minimum wage.
The opportunity in this context is that conforming with all the laws raises goodwill of the
organisation but costs a business a lot more than actual market circumstances.
 Ecological Factor: It has become very important for businesses to look after the
environment in which they are operating (de Lima and et. al., 2020). A business is
obligated to support government and local authorities in their venture focusing on
environmental protection and preservation. This will directly contribute in enhancing the
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