ZARA: History, Product and Services, Pestle Analysis, Porter's Five Forces, Value Chain Analysis

This document provides an overview of ZARA, including its history, product and services. It also includes a Pestle analysis, Porter's Five Forces analysis, and Value Chain analysis. The document explores how ZARA can deploy information technology to improve its enterprise processes.

Managing Information and Technology
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Contents
Describe about the ZARA and include brief history of business, also identifying product as
well as services............................................................................................................................3
Pestle analysis of Zara.................................................................................................................4
Porter’s five force model of Zara.................................................................................................5
Analyse three activities in Porter’s value chain and explain the importance of these activities
for Zara........................................................................................................................................8
Describe that how business could deploy information technology to improve its enterprise
processes and address any kind of issues..................................................................................10
REFERENCES..............................................................................................................................13
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Describe about the ZARA and include brief history of business, also identifying product as well
as services.
ZARA is based on the major Spanish apparel retailer with headquarters in Galicia, Spain.
Specialise in the selling various kind of clothes and accessories items. ZARA was founded in
1975 by Amancio Ortega and Rosalia Mera. This organization has been currently operate 900
physical stores across UK, including 615 that only sell food items. ZARA has been focused on
the promoting their product and service by using advertisement, website and mobile applications.
It also offers an online fashionable clothing delivery service for potential consumers (Adelaja
and et.al., 2020). ZARA has made its reputation in past decade, adopting the policy of only
selling Spanish made goods. Afterwards, it has been entered into long term relationship with
other Spanish manufacturers. Generally, ZARA employees are raised £5,000 to pay for its
business expansion.
According to the brief history of ZARA, it started life among more than years ago when
Ortega and Mera came to the Spanish. He began as peddler and owned a market stall. Initially, it
is very difficult to establish as successful business. So as implementing strategic approach in
order to target potential consumers towards brand. In global markets, they have already various
competitors, who have established the position in marketplace. ZARA is primarily focused on
the living condition and rising come which means that identified those people who are able the
purchase item. ZARA was facing the tough competition from affordable variety of stores.
Adapting to keep ahead of change pricing system, now selling the different goods up to 5
million. Afterwards, company is helping to improve current offers, discounts and placing
emphasis on the different departments such as accessories, jewelers. ZARA had always sold item
at some extent like clothing which was consider as new things.
ZARA core shops typically feature as selection of company’s clothing, wide range of
beauty, home-ware. These are attracting the various consumer towards brands. ZARA has been
sold various clothing and create an interactive space areas, which depends on the customer
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demographic, store location. All full line shop features are consider as different format of store
design pattern.
Product and service
Zara is concerned about the different product as well as service in global marketplace.
Generally, company is in retail sale enterprise, especially clothing items and non-toxic clothes.
Moreover, it also offering the clothes items such as women, men, school, kid’s wear and other
kind of accessories.
ZARA also provides the home and furniture item which comprising bath accessories, linen,
domestic appliance and storage items. Additionally, it provide the better items which will be
increasing the demand of electronic items. Through this way, ZARA has been established a
strong brand position while increase productivity as well as profitability in global marketplace.
Pestle analysis of Zara
Pestle analysis is based on the framework or tool that help for identifying the external
environment of ZARA. this factor analyses of ZARA brand and its business tactics. There are
different external factors such as Political, economic, social, and technological. These are
directly impact on the ZARA business (Bensoussan, Mookerjee and Yue, 2020). On the other
hand, Pestle analysis is define as framework which become consider as imperative for enterprise
such as ZARA. also helping in business growth and development.
Political Factor-
In this factor, ZARA has been consider as leading retailer in UK, which representing the
strong brand presence( Frue,2019). ZARA has operates 1000 physical stores all around the world
and headquarters of company in UK. Zara has provided the better advantage, benefits in trade
agreement (Nandonde, 2019). Further, it may support for reducing the sourcing price or cost.
Afterwards, company will utilise the better advantage, benefits of large Spanish market where
examine its current products. Sometimes, it is helping to travel item across multiple countries
without including taxes, tariffs.
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ZARA believed that pricing regulations in which help for improving overall business
process. Sometimes, Government closely related with regulation and interact with them to secure
or protect an organization’s. Usually, they have respond to the government queries which are
publicly available on the website. In this way, it has been analysed that Political factor affecting
on the ZARA because of political stability or taxes. If government will increase price or cost of
taxes so that it automatically increase cost or price of products for ZARA. in this way, it is
negatively affecting on the overall business and decrease their business revenue (Phan, 2021).
Environmental Factor-
In ZARA, it has been identified the issues related to the current climate condition or
situation, which being promoted on the regular basis by Advertisement. Usually, ZARA have
focused on the adopting Green policy now refer as Plan A. this will help for directly affecting on
the social communities and well-being.
It is closely related to “Non-toxic clothing” which has been worked with different
practices. In order to support the sustainable practices in term of processing (Samimi, 2020). It is
systematically acted as bring about change the environment while improving reduce the
atmosphere pollution rate. In ZARA, there are 50,000 staff members and 1000 suppliers acted as
establish link to reduce the disparities within society. It has been worked upon on the various
environment improvement while protecting from emission of greenhouse gases. In this way, it
has been analysed that ZARA supports for reducing the energy and promote equal fair value of
trade.
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SWOT ANALLYSIS
STRENGTH WEAKNESS OPPORTUNITY THREAT
Zara is focuses on
designing clothes
according to latest
trends, quality is
good .
Zara is not paying
attention towards
sustainabilityand not
able to balance fashion
and sustainability.
Zara can focus on eco
friendly and
sustainability more as
it is an opportunity to
expand business.
There are many
competitors in market
like, china fast fashion
giant.
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Porter’s five force model of Zara
Zara is a leading retail in clothing brand which has been originated from Spain in 1975 and
established by Amancio Ortega. Nowadays, Zara is the fastest growing retailer in global world.
The biggest competitors of Zara is H&M, Benton. These are tough competitors which provide
the similar quality of product and service of their consumers. Zara being the most reasonable as
well as fashionable beats of sales. in this way, it will be increasing the overall business
profitability as well as productivity in global marketplace.
The Porter’s Five forces is consider as common model which applied by organizations to
evaluate its business position. Sometimes, it influence the market in term of quality and
feasibility of retail industry. Usually, this kind of model is comprises of buyer power, supplier
and rivalry among existing firms. In some situation, it can be applied to represent as rivalry force
that influence the feasibility extend beyond the higher competition.
Threat of New Entrants-: Higher Pressure
Zara is a leading fashion company and address any kind of problem by giving the
reasonable price or cost with high quality of service. Nowadays, it has been rapidly increasing
the rate of Euro which will consequently increases the selling price or cost for potential
customers (Bryson, Sundbo and Daniels, 2020). At that time, Zara might lose the benefit,
advantage of being economic brand and also against the alternative competitors. However, brand
equity of Zara firm is depending on the organization and identify its current shortest sales
processes. In today’s world, Zara has already earned a major reputation that will always attract
potential consumers towards product as well as service. Sometimes, Zara may appeals to be
larger consumer where it continuously move towards demanding trends.
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Zara is a leading enterprise in which adopt as diversification style in context of both
vertical as well as horizontal directions. Sometimes, it consist of new fashion statement. Initially,
Zara has started the business as reputable brand and supply strategy which makes it rigid for new
players with a proper intention of reaching out to global marketplace. A new enterprise needs to
have all kind of resources that help for enhancing the overall business profitability. In this way,
Threat of New entrant for Zara is become higher.
Buyer Power: - Moderate Pressure
In despite of existing economic crisis, Zara has continued to grow their business strongly
with proper manner. It has been identified the certain lack of price or cost in switching by
buyers, high differentiation with different products. The potential consider of Zara belong to the
middle class to upper class, who have been considerably posses with higher buying power. Zara
is kind of Fashion clothing retailer who always distributed the product with same line of item. As
a result, it might have meet the innovative idea while comparing with other products, which are
presently offered.
Additionally, there are various kind of retail outlets which provide similar kind of
products. But they have been developed a low consumer loyalty and show an interest towards
innovation. At that time, it become easier for buyer to find out the better comparison between
different products, also force the enterprise to differentiate its item by putting more efforts. Zara
has been consider as craft strategies that will help to attract more consumer towards efficient
products. Threat of buyer power is moderate pressure.
Supplier Power: - Moderately high
The power of supplier of Zara is moderate high. As there is continued to increase the
demand of liberalization in context of global trade. Therefore, company goes down through
rivalry from other producers which is comparatively show existence of low wage boundaries.
Due to Covid-19, many suppliers are weakened by absence of business dynamic condition which
is always apparel Zara to increasingly their significant operation and function (Yee, Teck and
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Sorooshian, 2020). Supplier power is moderate high in which require for Zara to stick into
particular provision and also reduce the manipulation as well as variations of design patterns.
In Zara, Suppliers are consider as important force which is considerably high level. Hence,
it will consume more time to maintain a strong position in marketplace. Sometimes, it also
established as quality of partnership. The power of supplier is applicable as solid when members
in business gain more experience regarding higher cost or price by switching towards new
suppliers. At certain level, suppliers are tends to have better arbitrage by performing as
monopoly power in context of price or cost. So as Zara firm has been setting the price on the
basis of limited inputs. Afterwards, organization seem to prevent the better quality of product as
well as service. in additional, Zara has been engaged with 1000 suppliers in order to get or
purchase raw materials. Even there is some doubts occurs on the quality of suppliers.
Analyse three activities in Porter’s value chain and explain the importance of these activities for
Zara.
Porter’s Value chain model is consider as highly popular in enterprise so that Zara can use this
model to identifying their different activities. Zara must not take any kind of standalone
framework or tool by assigning the importance of value chain activities (Shankar and et.al.,
2020). The effectiveness of value chain analysis which require for Zara to realise the
functionality of business. Initially, it is important to adopt the Porter value chain framework to
determine the importance of activities.
Here is the list of primary value chain activities and also proposed by Porter:
Primary Activities-
This kind of value chain activities are directly related with Zara in order to produce or sell
various fashionable clothes for targeting audience. Analysis that primary value chain activities
can help to improve entire performance of Zara.
Inbound Logistic-
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It is also important aspect to develop or create as string relationship with different suppliers
as support the essential way to receive, store and also distribute products. Without identification
of inbound logistics, Zara has faced the various kind of challenges or issues in the product
development process. In this way, inbound logistics process is required for Zara to improve its
transformation from raw materials to finished item. For Example- Zara can use inbound logistic
process to retrieve raw materials, sharing the input and distributing for production.
Operations-
The importance of analysing the business operational activities of Zara, which increases
demand of raw materials, arrives. Sometimes, Zara is ready to use raw material such as fabric
ingredient in fashionable clothes. Afterwards, it will be convert into end product and then launch
in marketplace. For Example- Zara can perform different operational activities such as
assembling, packaging, testing, equipment that can repair, maintenance which falls into different
categories.
In context of Zara, analysing of different operational activities which plays important role
for improving the profitability of organization. Afterwards, it help for increasing the efficiency
while ensure the competitive success of Zara in marketplace. Whenever, it continuously
increased the production which can help to achieve its economic growth and set all necessary
competitive advantage.
Outbound logistics
This include the activities that deliver better quality or product to their potential
consumer by passing through intermediaries. Zara can perform some outbound logistics activities
such as material handling, scheduling, transporting, and order processing and so on. In this way,
company will properly analyse or optimise the outbound logistic process to explore their
competitive advantage in marketplace (Shankar and et.al., 2020). Sometimes, it is also supports
for achieving desirable goal or objective.
Secondary Activities
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The Secondary activities plays an important role in facilitating and coordinating the
primary value chain. Zara can gain more benefit, advantage by using Support activities.
Human resource management-
Zara is basically analyse the significant role of Human resource management in the
organization by evaluating different HR practices. Sometimes, it including selection, recruitment,
performance management, reward and award. These are consider as effective HR management
that allow for Zara to minimise competitive pressure. Moreover, it is also motivating, inspiring
the employees to achieve their desirable goal and objective. Furthermore, Zara can also achieve
its cost or price minimisation by analysing training price or cost. Usually, Zara is depending on
the employee performance in which increase importance of value chain analysis.
Technology development-
An advancement of modern technology which will change the efficiency and
performance of Zara. It is almost all value chain activities depend on the support of modern
technology. Technology has been establish as strong integration in context of production,
distribution, marketing and HRM activities. this will help for Zara to improve their performance
while processing the better technological development activities. For Example- Zara can use
automation software, and consumer service software which help for identifying the specific need
or requirement (Shankar and et.al., 2020). There are lot of research done by modern technology
within organization. Sometimes, Zara will be categorised into different manner.
Procurement-
It is based on the value chain in which denotes the process or method involves in the
purchasing input or output. Sometime, Zara can use wide range of equipment, raw material,
machinery and other kind of items. These are consider as essential aspect for producing finished
items. Zara should carefully use the better procurement activities in which optimise operational,
inbound and outbound value chain analysis.
As per concluded that Porter value chain model help for improving the all essential
activities. Zara can achieve the major significance in order to determine value chain activities.
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Zara will be highlighted all areas where needs to be added more values, cost efficiency that can
achieve, differentiation on the basis of different processes, which are completely optimised.
Describe that how business could deploy information technology to improve its enterprise
processes and address any kind of issues.
Information technology in business which is becoming consider as important aspects for
enhancing overall organizational capabilities or abilities. IT foster innovation in which improved
their data storage, fast processing and distribution of information (Chen, 2020). In this way,
Information technology (IT) could deploy to make business run with more efficiently. Generally,
an innovative can increase quality, value and also boost productivity in global marketplace.
By using innovation, Information technology has been created and following changes in
the business. Zara has already provide the online service for potential consumers. Online
shopping is consider as more efficient way to attract more consumers towards brand. For
Example- Zara has adopted digital marketing technique to promote the importance of product as
well as service by using Newspapers, magazine, radio advertising.
The evolution of Information technology has improved business processes and to address any
key issues within organization.
Information technology has provided the better business tool or platform in order to solve
complex problem-
Improving the hardware such as fast processor, visual display, memory management etc.
these are combined with smarter application which become easier for market research team to
analyse large amount or data or information. Afterwards, Zara can utilise efficient plan to
manage scalability to resolve business complexity. At certain point, it has been identified the
problem regarding data management. But it can be handled by using efficient hardware system.
Information technology allows business to make better decisions-
A good decision in the enterprise which are based on the research & development.
Therefore, Zara can use the different tools such as video conferring, social media. This provide
the better engagement with customer to find their opinion or view point (Shankar and et.al.,
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2020). For Example- there are commonly used tools such as Microsoft CRM dynamic and
Google analytics. Sometimes, Zara has face the issue regarding selection of particular tool which
help for establishing a better coordination, interaction with potential consumers.
Information technology has improved the business marketing process-
Generally, Zara has been used as Internet marketing through online advertisement
techniques such as SEO, Facebook Ads. There are providing the better opportunities for
organization to engage with targeted audience, also discovering their specific needs and building
an efficient marketing campaigns. Before using IT, it is very difficult for enterprise to see how
many people reads ads of newspaper. Therefore, it has been increased the issue to figure out the
individual people, who click on it. In this way, innovative tools such as SEO, Ads are helping
Zara to improve marketing process.
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Information technology (IT) has improved consumer support for enterprise-
The Potential consumers have received a better support through different channels such
as Email, telephone, social media platform, webinars. These are helping to establish as strong
customer relationship and also understand the specific demand of consumers. Before
implementation of IT, company has face issue regarding lack of consumer preference. Therefore,
company will not fulfil all demand of consumers and affecting on the business revenue.
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Phan, S., 2021. The effect of PESTLE factors on development of e-commerce. International
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Online
Frue,K.,2019PESTLE ANALYSIS[Online].Available Through:<https://pestleanalysis.com/why-
use-pestle-and-swot-analysis/>
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