(solved) PESTLE Analysis of Zara
Added on 2020-10-22
11 Pages3281 Words129 Views
RETAIL THEORY AND PRACTICE
Table of ContentsINTRODUCTION...........................................................................................................................................3TASK.............................................................................................................................................................31. Introduction to the company...............................................................................................................32. PESTLE analysis of Zara........................................................................................................................43.Change in micro and micro environment .............................................................................................54.Impact and Suggestion for micro and macro changes..........................................................................76.Recommendations-...............................................................................................................................9CONCLUSIONS.............................................................................................................................................9REFERENCES..............................................................................................................................................10
INTRODUCTIONRetailing is the process of sale product and service in small quantity to end customer. Retailer acquire bulk of product and service on discounted rate from wholesaler and sale it to customer with some profit margin. Retailer uses different marketing and promotion strategy to attract the customer. Location of selling point (shop) play important role in retailing as it must beeasily accessible to customer. Fashion retailer performs all the activities right from the beginningas designing and manufacture cloths and sale it to customer. ZARA is the biggest fashion Retail Company in UK. It has global presences. It makes its own cloth and sale it on ZARA stores and website only. ZARA is famous for maintain freshness in fashion by change its stock two times ina year. ZARA not only offer cloths, it also provides belt, handbags, and shoes. This report describes micro and macro factors which affect fashion industry and strategies to manage these changes.TASK1. Introduction to the companyZARA was founded in 1975 by Amancio Ortega and Rosalía Mera. Its 1st store was opened in the beautiful European nation Spain. Inditex, the world's largest apparel retailer is the parent company of brand ZARA. Inditex also owns brands such as M Dutti, Pull&Bear, Bershka,Stradivarius, Oysho , Zara Home, and Uterqüe. Target customer of ZARA is middle class people from 18 to 40 year age . This age group is very trend conscious and fashion forward generally resides in urban areas. It has 7000+ stores across the world. Zara targets its customers who want latest and updated fashion trends and accordingly it provides exclusive designs based on customer's need around the globe. Its focus is always on style and latest fashion trends. As fashion does not last here forever, So A fashion trend that can be found this week will not be there two or three weeks later. It leads to a sense of urgency among customers. Consequently, it provides higher sales. Without compromising on quality, ZARA targets the young customers who are price conscious. So it provides trendy and affordable fashion styles at low prices. As far as its positioning strategies are concerned, it is usage-based. ZARA shows customer’s centrict approach by satisfying the customer's requirements. Undoubtedly, with the physical exclusive
stores around the globe, ZARA keeps on building up the interest among the target customers. Zara has positioned itself as a trendy and quality fashion brand for young customers. Its fashion seasons keep on changing faster than the rest of the fashion world (Ptak. and Schragenheim, 2016.)2. PESTLE analysis of ZaraPolitical factor -Political factor that affect a business are change in tax, ease of doing business facility, foreign trade policy, change in tax rate, rules and regulations. ZARA faced political issue in corruption level, political turmoil, global political practice of “nationalism” by many countries. Which enhance the uncertainty and risk in Zara’s operation and decision. Foreign Government promotes to buy fabric from local market for employment protection of local manufactures that can hamper the quality of cloths if supply standard are not matched with brand standard. Governments also have some control on fashion trends to protect the culture of that country(Delbufalo, 2015).Economical factor- Economic factors which have high impact on business are inflation, interest rate, demand and supply, labor cost, employment ratio, tariffs etc. ZARA also affected when there is high tax rate in economy which reduces the disposal income of customers which result in decline in demand by customers. Currently“BREXIT” create tension in UK economy like reduce per capitaincome, immigration issues which increases labor cost, over control of UK government on UK t trade policy practices. All this have one good side that this policy has short effect on business. (Giannakis. and Papadopoulos, 2016)Socio -cultural factor-Social and cultural practices are common ideology, belief, customs and values accept by a group. UK cultural now changing drastically as Active consumerism, The ‘new’ old, self care culture, aesthetic pleasure etc. .ZARA faced criticism for cultural appropriation for using batti style dress. Batti style dress are clothing of Muslim women. Zara uses this style as its tie-dye maxi dress. ZARA is accused for not to use ethical and cultural norms for this action.
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