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Business Strategy Assignment : Zara organisation

   

Added on  2021-02-19

12 Pages3890 Words238 Views
Business Strategy

Table of ContentsINTRODUCTION...........................................................................................................................3TASK 1............................................................................................................................................3P1 Applying appropriate frameworks analyse the impact and influence of the macroenvironment on a given organisation and its strategies..........................................................3TASK 2............................................................................................................................................5P2 Analyse the internal environment and capabilities of a given organisation using appropriateframeworks.............................................................................................................................5TASK 3............................................................................................................................................7P3 Applying Porter’s Five Forces model evaluate the competitive forces of a given marketsector for an organisation.......................................................................................................7TASK 4............................................................................................................................................9P4 Applying a range of theories, concepts and models, interpret and devise strategic planningfor a given organisation..........................................................................................................9CONCLUSION..............................................................................................................................11REFERENCES..............................................................................................................................12.......................................................................................................................................................12

INTRODUCTIONBusiness strategy is defining as action or set of decision which is made by a company inorder to achieve its goals and objectives (Al-Mubaraki and Busler, 2013). There are differenttypes of business strategy such as product differentiation, price skimming and many more. Thisreport is based on Zara organisation which belongs to retail industry. Its headquarter is located inArteixo, Spain and was founded by Amancio Ortega and Rosalia Mera in the year 1975. Thecompany deals in the products and services related to clothing. Along with this, it also serves itsgoods and services at global level. This report is going to explain about external environmentwith the help of PESTEL analysis. Along with this, in order to conduct internal as well asexternal environment effectively, company make effective use of SWOT and PESTEL analysisso that they can formulate their strategies according to it. Along with this, in order to know aboutmarket position of the company, respective organisation must use porters five force model.TASK 1P1 Applying appropriate frameworks analyse the impact and influence of the macro environmenton a given organisation and its strategies.PESTEL AnalysisPESTEL analysis is an acronym for Political, Economic, Social, Technological,Environmental and Legal. A PESTEL analysis refers to the framework used by the marketingdepartments to analyse and supervise the macro environmental factors or external factors thatcan affect the working of an organisation (An Example PEST Analysis of The UK, 2019). Itguides management in decision making process and changing the threats and weaknesses intostrengths and opportunities. To understand factors which are affecting working procedure ofinternational fashion brand Zara, PESTEL analysis is performed which is as follows: Political: Political stability is a strength of UK, Brexit has created uncertainties andpolitical debates which will create confusion but its changes in opportunity for thecountry. If the political policies of UK are safe and harmonious, the firms operating arehealthier. Threats: Political factors can break off the supply chain and raise many difficulties for anenterprise. Threats for UK industries are created by hidden corruption and uncertainty of Brexit.

Opportunities: It is beneficial for Zara to limit its boundaries for supply chain to own countryand neighbouring nations. The UK government announced reductions in corporation tax which istaken to 17% from 19%.Economic: The UK is the 5th largest economy in the world by nominal GDP butrecession had put the economy in trouble. The inflation rates rose in November 2017 by3.1% (PESTEL analysis of UK, 2017). It has a high GDP, diverse economy with fewissues. These factors have huge influences on company and its success activities. Threats: In context to Zara, when British faced high inflation rates and high standard of livingwith less purchasing power. Slow recovery from 2008/2009 economic recession.Opportunities: Zara can adapt low pricing strategy which helps it in high inflation period tomaintain its profitability ratio in that conditions of UK where inflation rates are high. Social: The activities happening in social environment greatly affects the actions ofbusiness. According to data the expected population to reach 74 million by 2039. In 2016,18% of people were 65 above while 2.4% above 84. Threats: Due to majority of older aged people preferences given by Zara to young peoplesreduced in comparison to older ones.Opportunities: Zara is operating its business in various countries with different cultures. Thereare lot of opportunities for Zara to cater needs of older population. Technological: Technology sector is major contributor to UK economy. It focus on upgradation of new ways to produce, distribute or communicating with target markets(Charter, 2017). In marketplace there are various activities adopted by the businessenterprises to be innovative and creative but UK is falling behind in technologicaldevelopment in compare to USA and other countries. Threats: It is difficult for Zara to maintain reputation with existing and old technologies in UK.Zara can also face bad phase In UK due to outdated technologies compare to other places. Opportunities: In context to Zara, it can adopt online existence and production strategies whichhas unlimited opportunities to do business in UK.Environmental: The environmental factors can affect business activities and their abilityto function smoothly. The UK government focus on development of Europeanenvironmental standards with EU policy making. It focus on the promotion of sustainabledevelopment initiatives set up under an EU target .

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