Full Strategic Appraisal: ZARA

Running Head: FULL STRATEGIC APPRAISAL: ZARA
Full Strategic Appraisal: ZARA
Name of the Student:
Name of the University:
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FULL STRATEGIC APPRAISAL: ZARA1
Table of Contents
Introduction..........................................................................................................................................2
Company Profile..................................................................................................................................2
External Analysis.................................................................................................................................2
PESTEL Model................................................................................................................................3
Porter’s Five Forces Model..............................................................................................................7
Internal Analysis................................................................................................................................12
Porter’s Value Chain Model..........................................................................................................12
Competency Framework................................................................................................................14
VRIO Framework..........................................................................................................................15
Company’s Corporate & Business Strategy......................................................................................16
Issues and Challenges Facing the Company......................................................................................18
Ansoff Matrix................................................................................................................................19
Evaluation of SOG and Implementation............................................................................................19
SFA Framework.............................................................................................................................19
Conclusion and Recommendation.....................................................................................................20
References..........................................................................................................................................21
Appendix............................................................................................................................................25

FULL STRATEGIC APPRAISAL: ZARA2
Introduction
The study focuses on the full strategic appraisal of the brand ZARA. The company mainly
deals with the fast clothing fashion based on A Coruna in Galicia. The study will give a clear idea
about the external analysis, internal analysis, company corporate and business strategy, issues &
challenges and strategic options for growth. Lastly, it will focus on the evaluation of strategic
option for growth & implementation. It will also provide a concrete conclusion along with the
recommendation so that the company can expand and earn more and more profit in the near future.
Company Profile
In the year 1975, Zara store was first opened by Amancio Ortega. It was established in A
Coruna in Galicia, Spain. It is a part of Inditex Group, one of the largest fashion clothes
distributors. At present, there are 1900 stores of the company around the world (Vu and Medina
2014). In the year 2010, the company introduced online shopping features so that the sales can be
increased accordingly and the brands clothing can be reached to every possible customer around the
globe. In 1983 the company expanded across Spain’s biggest cities. In the year 1988, Zara first
entered the Porto, Portugal. In the next year 1989, Zara’s first store was opened in New York. In
the following years the company expanded to France, Mexico, Greek, Belgium, Sweden, Norway
and Israel. In the year 2000, new headquarters were built in Arteixo. In 2018, the company is
selling around 202 markets around the globe (Zara 2019).
External Analysis
According to Gupta (2013), external environment of any company consists of PESTEL
Model which provide us with macro environmental analysis. On the other hand, Porter’s Five
Forces model give a complete picture of industrial level analysis of the company.
PESTEL Model
Factor Main Impacts Comments

FULL STRATEGIC APPRAISAL: ZARA3
Political 1. In Europe, free trade
boost the Zara sales in
UK which helped the
movement of the goods
easily between
European countries
without any
boundaries.
2. There is no restriction
in quality as well as in
quantity of the goods.
3. The European Union is
said to be United
Kingdom’s biggest
export market and due
to free trade the brand
Zara can reach to a
large number of
consumers which
ultimately boosts the
sales figure of the
company (Geoghegan
2017).
 It can be said that there
are political
differences around the
world and to satisfy
every government the
company needs to
make a bond with
them.
 As there is no
restriction in the
quality and quantity of
the products, the
company may
compromise a bit in
the quality and also in
terms of price so that it
can attract more and
more consumers.
Economic 1. The fast improving
economic environment
 As the economical
environment is

FULL STRATEGIC APPRAISAL: ZARA4
in Spain helped the
company a lot in terms
of sales in clothing
retail industry.
2. This happens because
Spain consists of high
level of unemployment
along with high
population, which
lower the cost of
labour which helps in
low cost of production
and so the company
can earn large scale of
profit (Goodman
2017).
improving so the
company can make a
sale of large quantity.
 The low labour cost is
another factor which
helps the company a
lot to expand and to
earn more profit.
Social – Cultural 1. The increasing demand
of the brands clothing
within the consumer,
the company took the
advantage and started
online shopping along
with the store.
2. Online sites helped the
consumers to purchase
the product even
 The company is new in
the online system so
there are lots of scope
to improve in that
section.
 The introduction of
app can benefit the
company in terms of
money in the long –
run.

FULL STRATEGIC APPRAISAL: ZARA5
during the night time
when the stores are
closed (Skrovan 2017).
3. On the other hand,
Zara operates in
different country so
there is a variety in
their products as well
due to diverse culture.
So, they started
producing cultural
specific products to
satisfy and grab
consumers all around
the world (Hipwell
2017).
Technological 1. Technology has given
the customer options to
view the combination
of the clothes along
with the colour.
2. The technology also
helps them to order
clothes online and help
them to select cloths
within the wide range
 The application of new
technology will
automatically help the
company to expand
and reach to the
consumers where there
is no stores.
 People are more into
online shopping now-
a-days along with