(Solution) Pestle Analysis of Zara
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Added on 2021-02-21
(Solution) Pestle Analysis of Zara
Added on 2021-02-21
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Table of ContentsINTRODUCTION...........................................................................................................................1Analysis of Zara..........................................................................................................................2Strategies and tactics that could be used by the retailer to respond the major changes occurZARA..........................................................................................................................................6Recommendations.......................................................................................................................7CONCLUSION................................................................................................................................8References........................................................................................................................................9
INTRODUCTIONRetail enterprises is an operation and process for selling goods and services to the buyersby using different methods, such as advertising and promoting the product itself to be sold. Thisprocess helps the organization to distribute the information through channels and make profit inthis industry. This present study is based on Zara that is a Spanish Fast Fashion retailer. Zara is aleader in terms of retailer which deliver and provides different type of products in connectionwith customers demand and satisfy the people through supply chain. Its headquarter is inArteixo, Spain. This study is going to discuss and analyse some key element that can help theorganization to make changes in fashion industry. It will also discuss and show some microenvironmental factors like customers, competitors &b suppliers that also influence the company'sprofitability & sales. With the help of PESTLE analysis it makes itself able to evaluate allenvironmental factors. All these factors have negative and positive impacts on the performanceand growth level of the company. Further it will also describe the strategies and tactics that Zaracompany use in order to response in terms of changes occur this fashion retailer. It makes enablethis company to take competitive advantages.Relevant changes in Uk fashion clothing industryAccording to Goworek and McGoldrick (2015) retailers relies on and are influenced by societytrends”.As I stated above, Zara is the leader in the Uk terms of sales, outrunning its directcompetitor H&M. As BUSINESS INSIDER stated (2018),” Zara and H&M are two of the topbrands in fast fashion and Zara reported a 7% increase in profits in 2017 and sales continuedgrowth in its recent quarter. H&M on the other side, has struggled, with operating profitdropping 62%”.Zara was founded in 1975 by Rosalia Mera and Amancio Ortega. This company operatestheir own brands such as Uterquie and Zara.They expanded their own business in differentcountries and this act determined their international position in the market place.They alsolaunched online boutique and are present online through their website. Zara online extended indifferent countries such as Ireland, Belgium, Austria and Luxembourg. This company uses RFID(radio frequency identification) technology in the store since 2014, this modern technology helpsand provides high security tags and can be easy removed from the clothing. Zara has more than1
50 stores existing in the Uk and manage many collections every year. The organisation preferredto invest a big ratio of their revenue in the new opening. Zara can design very fast a new productand have it the finished good in the physical store.To continue, we will go through some specific tools to analyse Zara, such as PESTLEanalyse and Micro environment.It is necessary for this fashion retailer to use business tools to analyse the changes in the macroand micro environment.Fashion retailers can also face issues from micro environment because some changesmight occur in consumers and suppliers’ attitude and high level of competition in fashionindustry. To overcome such issues company must adopt some strategies and choose appropriateretail theory to sustain a dynamic progress in this competitive industry.Fashion industry is very popular in market because many people preferring brand image and theybuy the product due to their market value. Therefore, Zara needs to maintain and continue tobuild a strong position in global world. Analysis of ZaraZara is the most admired and popular brand that continued growing in the past few years.It is a great fashion designer for producing clothes at affordable price. Another positive attractionof Zara is when boost its fashion cycle and changed their fashion quality responding to thedemand of customers. The fast rising the fashion brand had a lot of success recently. In this way,they expanded the business internationally. There was some pressure in the global market, but Zara has been successful because Zaraacts and plans in the smarter way to achieve the goals and its objectives. An organisation likeZara is subjected to multiple forces in the global market Bernon, Tjahjono and Ripanti(2018).Pestle analysis helps for easily understand what type of forces and factors affect Zara in theirmoving business. These aspects are important and their effect on the company. Pestle consists inmacro environment factors that can influence Zara to determine the changes in their businessoperation.PESTLE ANALYSISPolitical factors:It is the most common political factor that can have an impact on the business operation andprocess which depends on the financial regulations of nation. Many businesses and the2
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