Global Strategic Management: Analysis of Zara's Business Strategy

Global
Strategic Management

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
1. External Analysis.....................................................................................................................3
2. Internal analysis.......................................................................................................................7
3. Ethical Assessment of strategy,.............................................................................................10
4. Evaluation of strategy............................................................................................................12
CONCLUSION..............................................................................................................................13
REFERENCES................................................................................................................................1

INTRODUCTION
The global strategic management have its attention on all the factors and elements related
to the environment of all the nations and their interaction with each other. The global strategic
management inspect all the approach and check the reaction of its rivals in various market
condition. Global strategy include global, international and strategy related to world. Zara SA is
a stylized as Zara it's a Spanish retailer in the Galicia. Zara used to offer a fast fashion in the
products like clothing, shoes, swimwear and many more. Zara is the biggest corporation of
Inditex group. Zara is the largest clothes retailer in the globe founded in 1975 by Amancio &
Rosalia. The company produce man, women and kid wear. Zara used to supply their product
according to the trend and fashion of its customers. This report will evaluate the business
strategy with intrinsic analysis of VIRO and value added chain and external analysis with porter's
five force and Pestle analysis which inspect political, economical, social, technological, legal
and environmental factors it will further evaluate the ethical assessment of the Zara and check
weather the company is performing ethical aspects than evaluation of the approach and strategy
that is used in the business strategy.
MAIN BODY
1. External Analysis
It helps the company like Zara to identify and adapt the changes that happens in the external
environment and could impact its operations and keep winning in an industry.
PESTLE Framework
 Political Factors – Zara is brand which has its operations worldwide in many countries.
Company has born out at the time of European Union is the one of the major market for
clothing and textiles. UK has framework is effectively established and has extensive trade
agreement that is helpful for Zara to import and export raw materials & finished goods.
Political Factors impact the business every company like Zara, as it was following all the
rules and regulations related to EU, but now with the rise of Brexit its all the business
activities will be influenced (Perera, 2017). Having the operations globally it needs to
take care of all the political factors tax policy, trade restrictions, political stability of all
the countries in which it is trading. As the political instability in any country directly
affects the supply chain of the company and the adjoining borders as well.

 Economic Factors – Zara is the one of the largest and popular brand in the UK and it
also enjoys the benefit of minimum cost labour. Some countries like UK are facing the
slow growth in the economy in recent times due to several reasons like global pandemic,
Brexit etc. The ability of Zara to cater the needs of shoppers helps the company to build a
loyal customer base. Zara offers its luxurious products in the affordable range in
comparison to its rivals, that provides it a advantage of greater market share. One of the
greatest impact is the exit of EU from the Brexit, has lead to the decline in the value of
pound which has ultimately which has resulted into increase in inflation rates because of
which citizens are left with the less disposable incomes to spend. Therefore, currently the
sales of Zara and clothing industry has reduced.
 Social Factors – Social factors are volatile and have the huge influence on the supply &
demand of the products and on willingness and accessibility of employees to work. Zara
offers the wide variety of products. These factors comprise cultural norms, population
and growth rates, age distribution, health&safety etc. Company provides the products
related to different segments in order to satisfy the all (Christodoulou and Cullinane,
2019). Social culture impacts the buying decision of the customers particularly in the
clothing industry. Before entering into the new market Zara's research & development
team does the complete analysis and research to understand the needs of the markets and
what they can offer in order to attract more customers. Zara have philosophy to make its
products rhyme with the community's culture.
 Technical Factors – Zara has the strong financial resources which helps the company to
grab the opportunities. Company with the help of its resources invests the large amount in
order to collect the data of the users and identify different innovative methods to attract
the customers. Zara interact its customers through both the platforms online and offline.
Company has the great website or online platform and huge customer base their also, it
provides the several innovative features with the help of technology to make the platform
simpler fort its customers. Technology has helped the company and the customers as