Key Changes in UK Fashion Market

This document discusses the key changes in the UK fashion market, including political, economic, technological, social, legal, and environmental factors. It also analyzes the micro-environmental factors such as competitive rivalry, threat of new entry, threat of substitution, bargaining power of suppliers, and bargaining power of buyers. The document provides strategies and recommendations for effective management of these changes.

Running head: MANAGEMENT
Management
Name of the Student
Name of the University
Author Note

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Table of Contents
Introduction to Retail:................................................................................................................3
Introduction to the company:.....................................................................................................3
Key Relevant Changes in UK Fashion Market:.........................................................................4
PESTEL Analysis:.................................................................................................................4
Political:.............................................................................................................................4
Economic:..........................................................................................................................4
Technological:....................................................................................................................5
Social:.................................................................................................................................6
Legal:..................................................................................................................................6
Environmental:...................................................................................................................6
Change within the Micro-environmental Factors:.....................................................................7
Competitive Rivalry: High.....................................................................................................7
Threat of New Entry: Moderate.............................................................................................7
Threat of Substitution: High...................................................................................................8
Bargaining Power of Suppliers: Low.....................................................................................8
Bargaining Power of the Buyers: High..................................................................................8
Strategies:...................................................................................................................................9
Recommendations:...................................................................................................................10
Conclusion:..............................................................................................................................11
References:...............................................................................................................................12

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Introduction to Retail:
The conceptual definition of the retail describes it to be a business form that involves
the sellers and the end users. It is a single point business operations where the sellers are
observed to sell the products directly to the end users (Dunne, Lusch and Carver 2013). In
other words, it is a transaction of the goods between the seller and the customers at a single
point in small quantities to satisfy the requirements of the individual customers (Grewal,
Roggeveen and Nordfält 2017). The retail industry is seen to be significantly growing with
the entry of new organizations into the industry. Adding to this, the fashion retailing is a
concept of retail business that sells the cloths, apparel and accessories.
The fashion retailing industry is observed to be significantly fast changing and along
with that, the organizations operating in the mentioned industry are observed to be notably
dependent on the varying preferences of the customers (McCormick et al. 2014). The paper is
focused in the elaboration of the business conduction of a chosen organization in the form of
the Zara. The paper identifies the fundamental changes that are taking place in the UK
fashion retailing industry and along with that, the paper conducts a micro-environmental
analysis of the chosen organization. Apart from this, the paper also suggests the strategies
that can be used for the effective management of the changes that are happening in UK retail
industry along with that the paper recommends some of the important strategies for the
chosen organization in the management of the challenges.
Introduction to the company:
The chosen organization is a prominent name in the fashion retail industry. The
company was established in the year 1975 by Amancio Ortega and Rosalia Mera (Zara.com.
2019). The headquarter of the mentioned organization is currently situated in Arteixo of
Spain. The organization opened 10000 stores across the globe which helps them to serve a

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large number of customers (Zara.com. 2019). The organization generally serves the
customers with the cloths of optimum quality and is recognised for the fine designs as well.
The mentioned retailer is able to generate a net sales of 1.3 billion US dollars in the year
2017 which is 48% more compared to the statistics of the net sales of the previous year for
the mentioned organization (Zara.com. 2019). The growth of the revenue of the organization
in the year 2017 was seen to be 31% and that influenced the organization to have the
projected net sales for the year 2018 as 1.7 billion US dollars (Zara.com. 2019). The
organization is observed to be significantly dependent on market of United States and that is
pretty evident with the fact that 29% of the net sales of the mentioned organization is from
the market of United States (Breinlich et al. 2016)
Key Relevant Changes in UK Fashion Market:
PESTEL Analysis:
Political:
The UK fashion retail industry is notably affected with the impact of the Brexit. The
business conduction of the organizations operating in the mentioned industry has changed as
the organizations were forced to face notably strict rules and regulations as a result of the
Brexit (Norton 2016). Adding to this, the business conduction of the organizations belonging
to the other countries of the European Union was observed to receive an impactful set back.
The supply of the raw materials from, the part of the International suppliers was affected and
the country experienced a genuine crisis of the skilled labours for the effective conduction of
the business operations (Norton 2016).
Economic:
The revenue of UK fashion retail industry is 24914 million US dollars and the
evaluation of the statistics of the revenue of the mentioned business industry confirms that

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fashion retail industry of UK is subjected to a sharp rise in the coming years (Statista.com.
2019). The growth of the industry is expected to be 6.1% throughout a span of 5 years
starting from 2019 to 2023 (Statista.com. 2019). The statistics of the growth indicates that the
market volume of the mentioned organization is expected to reach 31537 million US dollars
in the year 2023 (Statista.com. 2019). With the improved statistics of the revenue and the
growth of the mentioned industry, it is pretty visible that the organizations are able to change
their business policy, which in the recent times, is seen to be more focused on the
achievement of the preferences of the customers and addressing the varying demands or
requirements of the customers. In order to meet the requirements of the customers in an
efficient manner, the organizations are observed to reduce the duration of the cycles for the
design of the products (Caro and Martínez-de-Albéniz 2015). This effectively helped the
organizations to introduce attractive designs in a shorter duration which was of great
significance in satisfying the customers and influence them towards the repetitive purchases.
Technological:
The impact of the modern technology and the innovative gadgets in the mentioned
business industry is seen to be noteworthy. The application of the technology in the creation
of the mobile applications for the effective communication with the customers is seen to be a
major change that the mentioned industry is experiencing. The organizations of the UK
fashion retail industry are able to achieve the importance of establishing a platform for the
effective exchange of the views and opinions regarding the products of the mentioned
industry (Mohr 2013). The achievement of the preferences of the customers regarding the
quality of the products and design of the products is seen to be significant with the
application of the technology and many of the organizations are observed to incorporate the
technology in the formation of the websites or virtual community groups for the achievement
of the preferences of the customers.

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Social:
The social impact on the mentioned business industry is petty evident with the need
that the organizations faced in improving their customer relationship management. The
organizations are seen to face the need of introducing effective techniques for the design of
the products in accordance o the preferences of the customers. The modern generation
customers of the nation were seen to be seen to prefer such cloths which will be able to
reflect their style statement in an efficient manner. The organizations are seen to face the
need of considering the body shapes, hair dos, nose piercing, multiple tattoos and ear piercing
of the customers in designing their products (Brogi et al. 2013). This played a crucial role for
the organizations in the achievement of the purchasing preferences of the customers.
Legal:
The effect of the legislation is seen to be moderate. As mentioned earlier, the
government is keen to employ some of the legislation that will impose notable constraint in
the operations of the organizations. At the same time, the legislation regarding the ethical
sourcing of the raw materials, equal and unbiased pay structure for all the employees are
observed to be crucial for the business operations of the organizations. Apart from this,
government is notably proactive in the monitoring of the implementation of the legislations
regarding the workplace discrimination and the sexual harassment of the employees in the
organizations.
Environmental:
The effect of the environmental factor is comparatively less as the operations such as
the sourcing of the raw materials for manufacturing of the products with a precise focus on
the desired quality and the attractive design of the products, is seen to be the only concern in
the environmental aspect.

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Change within the Micro-environmental Factors:
Competitive Rivalry: High
The level of competition in the UK fashion retail is seen to increase in a significant
manner over the years. The industry is populated with the organizations like the ASOS,
Burberry and Mark & Spencer. Apart from this, Next Plc. (Asos.com. 2019). is also seen to
conduct significant business in recent times. With the market capitalization value of 6.18
billion dollars, 10 billion dollars, 6.18 billion dollars and 7.16 billion dollars for ASOS,
Burberry, Mark & Spencer and Next Plc. respectively, the high level of competition is pretty
evident in the market (Burberryplc.com 2019). Adding to this, the main basis of competition
in the modern market is observed to be the fine design of the products, the achievement of the
desired quality in the products, the minimization of the lead times, the conduction of the
training and the developmental activities of the employees for the improvement of their
performances along with the urge of the effective supply chain management for the increased
production. One of the changes that became significant for the above mentioned organization
in the generation of such improved profit is the effective management of the customer
requirements and the achievement of the preferences of the customers in the design of the
products of those organizations (Çifci et al. 2016).
Threat of New Entry: Moderate
The intention of the new organizations in entering the UK fashion retail industry is
seen to be moderate. The new organizations are observed to be significantly influenced with
the revenue of UK fashion retail industry which currently is 24914 million US dollars
(Statista.com. 2019). However, the new organizations are seen to face the issues such as the
significant costing of the infrastructure that is required for effective business conduction
along with the absence of the capability and concern regarding the mechanism for achieving
the preferences of the customers in their design for triggering the customer loyalty. Apart

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from that, the increasing labour and employment charges and the cost of the raw materials are
seen to influence the new organizations in a significant manner. Hence the new organizations
are observed to be dilemma regarding their entry into the mentioned industry which makes
their impact moderate.
Threat of Substitution: High
With the above mentioned organizations such as ASOS, Burberry, Mark & Spencer
and Next Plc. applying the competitive pricing policy and considering the scope of
improvement of the quality with a significant focus, the customers of the industry are seen to
have considerable number of organizations to choose for their products. The relevant changes
that are observed to put the above mentioned organizations to top of such high market
capitalization, are observed to be the focus of the organizations in designing their products in
accordance to the style statement of the customers and the improvement in the social
shopping (Ahmad, Salman and Ashiq 2015).
Bargaining Power of Suppliers: Low
The bargaining power of the suppliers is observed to be low. The impact of the
suppliers on the mentioned business industry is limited as the main objective of the suppliers
is to sell the products in bulk and they are even ready to provide large discounts on the bulk
purchases. The organizations operating in UK fashion retail industry are able to experience
the presence of considerable number of suppliers with the desired characteristics of providing
the supply of the materials on time, in accurate quantity and of the optimum quality. Hence
the influence of the suppliers are evaluated to be limited.
Bargaining Power of the Buyers: High
As the industry is seen to experience the participation of considerable number of
organizations who are capable of providing the products that are designed in accordance to

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the preferences of the customers, the end users of the products are provided with a series of
company that they can buy from. Hence the bargaining power of the buyers is seen to be
high.
Strategies:
As it is pretty evident that the customer relationship management has become an
integral part of the modern business conduction, the organizations operating in UK fashion
retail industry are in need to make sure that they have an effective system or mechanisms for
the exchange of the views and opinions of the customers. Apart from this, the improvement
in the customer relationship management will be significant from the part of the
organizations in achieving the varying preferences of the customer and the rare cases of
grievances of the customers related to the product design (Dabija, Szentesi and Pop 2014).
This has the potential to help the organizations in designing quality products which will be
able to satisfy the customers of the organizations and trigger their intention of repetitive
purchases.
Apart from this, the lead time restructuring is seen to be significantly important for
the organizations as well. Considering the traditional retailers in the wheel of retailing, the
organizations had the tendency of completing one or two design cycles per year which was
seen to restrict the organizations from the effective achievement of the fast changing
preferences of the customers and the modern trends in previous years. However, in the
modern generation, the sales of the organizations are notably dependent on the organizations’
capability of achieving the preferences of the customers in their design. Hence in the modern
generation, the functional organizations of UK retail fashion industry is seen to be consider
the reduction of the duration of the lead times and consider the increment of the design cycles
(Armstrong and Lang 2013). Adding to this, the increment in the cycle times has the potential

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to help the organizations in the effective management of the market trends and the changing
customer preferences.
With a precise focus on the micro environmental factors, it is pretty evident that the
mentioned organizations that are able to conduct a significant business in terms of the
revenue, are seen to focus in aligning their products in accordance to the preferences of the
customers. The organizations are seen to consider the individual style statement of the
customers while designing their products which is pretty evident with their consideration to
the hair dos, nose piercing, ear piercing and tattoos of the customers. The customer centric
design of the products is seen to be notably important for the organizations in achieving
higher customer satisfaction which triggers the intention of repetitive purchases of the
customers (Dabija, Szentesi and Pop 2014). On the other hand, the success factors of the
market leaders also includes the aspect of the social shopping. The organizations are able to
conduct the marketing and the promotional campaigns through the social media platforms
which in the modern generation is able to attract larger number of customers. The social
shopping enables the organizations to effectively achieve the preferences and the views of the
customers for the design of the products. Apart from this, the increased urgency amongst the
organizations in conducting the exhibitions for sales is seen to be a significant change in the
business operations of the modern generation organizations.
Recommendations:
The recommendations for the chosen organization will be to improve their online
business activities with a precise focus on the marketing and promoting the products. The
increased social media activities from the part of the organization will be of great significance
in providing the sufficient market limelight to the products of the organization. The
conduction of the exhibitions for sales will also have a greater significance for the

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organizations in terms of communicating with the customers so that the company be able to
understand their requirements and design their products in accordance to that to minimize the
impact of conflict amongst both the parties. On the other hand, one of key changes that the
company is in need to conduct is the increment in the number of cycles for the design. This
will enable the organization to shorten up their lead times and be able to increase their
flexibility in meeting the varying preferences of the customers through their design of the
products. Apart from this, the chosen organization is recommended to concentrate on the
style statement of the customers while designing the products to increase the suitability of the
products for the customers.
Conclusion:
On a concluding note, it can be said that the chosen organizations is in need to
conduct some necessary restructuring for the improvement of the business conduction. It is
prey evident from the analysis that the fashion retail business industry of UK has faced
significant amount of changes over the years. The organization is in need to respond in a
positive manner to the changes such as the improvement of the quality, the increment in the
conduction of the social media activities, the effective reduction in the number of cycles of
design along with the efficient restructuring the customer relationship management system of
the organization for a sustainable and profitable business conduction in the UK fashion retail
industry.

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Armstrong, C.M. and Lang, C., 2013. Sustainable product service systems: the new frontier
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costs of Brexit would be distributed across income groups. BREXIT 2016, p.54.
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brand equity in the fashion industry. Dabija Dan-Cristian, Pop Nicolae Al., Szentesi Silviu, A

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Customer-Oriented Perspective on Retail Brand Equity in the Fashion Industry, Industria
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