Applied Corporate Strategy

APPLIED
CORPORATE
STRATEGY

Table of Contents
EXTERNAL ANALYSIS ...............................................................................................................3
PESTLE Analysis........................................................................................................................3
Porter's Five Force.......................................................................................................................5
INTERNAL ANALYSIS.................................................................................................................7
SWOT Analysis..........................................................................................................................7
VRIO Analysis............................................................................................................................8
STRATEGY EVALUATION..........................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Corporate strategy is the strategic plan which defines the goals and objectives of an
organisation which helps in the achievement of success and growth. This strategy is made with
the purpose of long term success with defined vision and direction of the company. It is a
continuous process which is able to respond in the changing working conditions and market
situations (Rugman and Verbeke, 2017). This strategy develops on the top of business strategy
which is related with the strategic decision making of business. Corporate strategy involves
various elements on which a leader should focus such as allocation of available resources,
organisational design, portfolio management and many more. It is a wide plan which helps in
choosing and developing the particular market in order to improve the units and departments of
business. This report is in the context of Zara which is a Spanish multinational clothing company
headquarter in Arteixo, Spain and founded in 1975. Their aim is to create a link between
demand, distribution and manufacturing by which they can easily react to the changes which
occurs in the market. This report is going to focus on the external analysis which helps in
identifying the opportunities and threats and also analyse the key resources and competences of
an organisation which helps in identifying the internal factors. Moreover, relevant strategy is
evaluated which is suitable for company by using the SAFe criteria.
EXTERNAL ANALYSIS
PESTLE Analysis
It is an assessment of changing world in which business operates in order to identify the
threats and opportunities. A business strategy need to consider the external forces in order to
identify the success factors which leads to navigate the company towards its success by
determining its strengths and opportunities (Geckil and Anderson, 2016). In order to identify the
external factors PESTLE analysis is used which defines the group of companies like its
competitors and its market segments which is separated by geography, demography and
behaviour.
Political: It is an important factor which influences the business in order to change and
modify its regulations. Every country and its government does not have the same view point
regarding the business as not every government allow easy trading to foreign direct investment
(Cooper, 2017). Political disruption impacts the market and its conditions which influences the

economy. As Brexit drastically influences the political conditions of UK as it results in reducing
the British income. For this, Zara started expanding its business into other countries and for this,
company took major step and conduct research in order to expand its business. Reason behind
this step is that government changes its policies frequently which impact its operational
activities. In the terms of expansion, Zara expand its business in EU because of its safe economic
conditions which helps them in order to predict the growth of market because the economic
conditions of Europe rarely change. This expansion becomes the opportunity for Zara as by this
they gain the new market segment, develop its customer base and reputation in the market.
Economical: Fast growing environment of Spain has increases the sale of clothing in the
retail industry. This is because of the high level of unemployment and population as the labour
and production cost is low and qualitative products which reduces the prices as it helps in
attracting more customers (Keyes, 2016). Moreover, impact of Brexit resulted in decreasing the
inflation rates and increases the living cost. Zara witnessing the fluctuation in past few years
which impact its revenues successfully and it becomes an opportunity for it as company deals in
the dollars which helps in evaluating the economic conditions before entering into new market
segment. Moreover, due to various custom duties in countries, the prices of Zara products may
vary in different countries.
Social: Businesses need to run according to the social trends and manages their social
responsibility in order to achieve the sustainability and advantage in business environment.
Moreover, a large number of companies emphasis in social responsibility just to attract more and
more customers. The rapidly increasing urge of consumers increases the online market and
shopping and through this customers are able to compare their prices from their competitors
which influences the sale of their products and this becomes threat for the company. As it
influences the sales and revenues of Zara and also its customer base. Moreover, company try to
improve itself by considering the societal factors such as geographical position, population,
origin of country and many more. Additionally, company also develop its production by
providing its products in various size which is suitable for skinny or heavy weight people.
Furthermore, company does not believe in offering discounts and offers to their customers as
through this their sales got affected as it also become threat because its competitors provide
discounts. In order to overcome this factor, Zara occasionally provide promotional codes and
other deals to its customers which are redeemable on their online site.