Applied Corporate Strategy

APPLIED
CORPORATE
STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
External analysis of business environment..................................................................................1
Discuss the prominent resources and capabilities of organisation that links with competitive
advantage.....................................................................................................................................5
Recent strategy that company undertook and evaluate it using SAFe criteria............................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Corporate strategy refers to the strategic plan which depicts the goals and objectives of an
organisation. It is useful in describing suitable values and believes that are based on long term
strategies which influences people to attain strategic goals. It also offer pre determined vision to
organisation in order to develop value of company. It is considered as an ongoing process which
describes Vision and Mission of company (Rugman and Verbeke, 2017). For this report Zara is
considered which is a Spanish apparel retailer based in Artexio, Spain. As company specialises
in in fashion products including accessories, clothes, shoes, swimwear, beauty and perfumes and
considered as the largest company in the Inditex groupwhich is the biggest fashion group in the
world operates over 7200 stores in approx. 93 markets. Its flagship store is Zara but also own its
chain including Massimo Dutti, Bershka, Oysho, Pull and bear and so on. Moreover this report is
based on the prominent information is provided in the case study and in regard of this various
frameworks are used such as PESTLE analysis, porter’s five Force model and safe criteria will
be done to determine the current position, threats and opportunities for company.
MAIN BODY
External analysis of business environment
Business environment is the collection of both macro and micro factors which impacts the
business functioning and activities. For this internal factors include customer’s human resources
suppliers physical Assets and Management meanwhile external factors considered political legal
economical environmental and social factors. Zara relies under the top 10 largest clothing retailer
as it is influenced by the external environmental factors that are discussed as underneath:
 Political factor: This factor include prominent changes in the global Trading regulations
including political stability government strategies trade policies and so on as these are the
factors that are important and keep in mind while executing and launching new product in
the market (Eccles and Youmans, 2016). In the political context the biggest opportunity
for company is the European Union and there are extensive trade agreements which not
only make easy to import raw materials and export finished products but also means that
Zara can trade its Merchandise across the world with Limited efforts for low cost.
Therefore the European Union’s free trade policies are quite beneficial for Zara. Away
with this it is also analysed that whenever company wants to expand its business it
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becomes very long procedure and reason behind is the Government of country and
political instability which impacts the operations of company.
 Economical factor: It includes the inflation rates interest foreign exchange rate and
unemployment which impacts the business functioning of Zara. For this low cost labor
become an opportunity for company as Spain has the highest unemployment rate in
Europe in comparison to other countries like France Germany and UK. For the good
manufacturing fraction of products the low labor cost allows Zara minimize cost that
leads to improve profitability (Samarasinghe, 2016). In addition to this its products are
relative Lee affordable in comparison to other European fashion brands which allows
company to expand its business in poor countries as well. Away with this Zara witnesses
the fluctuations in economy in last many years but because of its revenues Zara does not
affected by the recession which arise in 2011. Moreover because of the various custom
duties and several levels of tariffs in different countries the price of products can fluctuate
according to the custom duties and Taxes of country.
 Social factor: It considered the population growth rate lifestyle believe attitude and
safety of people. In terms of Zara despite of its price factor it is considered as the
fashionable brand in which company is praised by its customers. In relation with this
Zara offer good quality product not only for its profitability but also retaining its
customers for longer period of time by thanking them which is its marketing effort
(Puranam and Vanneste, 2016). This positive brand presents became opportunity for Zara
together prominent profit margin for its shareholders. Moreover Zara also offer online
shopping to its customers as currently many people want their products with the help of
just one click as it becomes convenient for them. Therefore Zara pay close attention
towards the performance of its online outlets in order to offer prominent services.
 Technological factor: It includes level of innovation automation technological awareness
incentives and research and development activities. Zara is the first brand which use
technology for the expansion of its product and reach too many customers. Company
prominently use information technology in order to support its Global logistics system
and online outlets in which exchange and return of commodities are involved for this
Zara give chance to its customers to purchase its product with the help of their
smartphones and in-house apps which can become opportunity for company to hold its
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