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Assignment - Analysis of Zara

   

Added on  2020-12-18

13 Pages3971 Words256 Views
Case 3: Zara

Table of ContentsINTRODUCTION...........................................................................................................................31. Evaluation of external analysis to identify a set of Opportunities and Threats and assessindustry attractiveness. ..........................................................................................................32. Analyse the resources and key competences of the organisation and identify corecompetences...........................................................................................................................63. One strategy that the company implemented recently and evaluate it using SAFe criteria.10CONCLUSION..............................................................................................................................11REFERENCES..............................................................................................................................13

INTRODUCTIONThe present report is on Zara, which is a Spanish fast fashion retailer company inArteixo, Galicia. The company was incorporated on 24 May, 1974 by the founder AmancioOrtega and Rosalia Mera. Zara is the main brand of their parent organisation Inditex group,which is the world's largest apparel retailer company. The company offers the latest fashionbrands of high quality with affordable prices (Goworek and et. al., 2012) . Zara started theirbusiness from a very small store, and in the present time it is reached as the world's largestretailer company. The success of ZARA has increased the goodwill of their founder AmancioOrtega, as the 4th richest man in the world. This report will mainly emphasizes on the internaland external factors of Zara, by doing its SWOT analysis. The present report also include theFive forces of ZARA and the business strategy which ZARA had implemented currently , and anevaluation is to be done using SAFe criteria.1. Evaluation of external analysis to identify a set of Opportunities and Threats and assessindustry attractiveness. External analysis is being explained by the PESTLE analysis of ZARAPESTEL analysis is used to identify the external drivers of changes in businessenvironment. The chosen organisation is having approx 1700 physical and online stores whichoffers products for men, girls, women and children in all over the world. Therefore, it shouldmake an effective plan of action to retain its existing position, and to make these planssuccessful, the company should consider the key changes and their effect in the businessenvironment. This effect can be measure by doing PESTEL analysis of the orgnisation, which isoutlined below: ForcesDescription Political EnvironmentThe sale of the firm products has been increased by globalization andfree trade agreements across Europe and other parts of the world. Bythis it is evaluated that no barriers will appear in European states.Along with this, boundaries on quantity and quality of imported or

exported have been isolated and a consistent custom tariff rate hasbeen made valid, and by this the member countries in EU are thebiggest export market for textiles and clothing which has boosted itssales. Also, policies can be made to increases its inter-state offeringswithout paying extra tariff. In addition with this the competition inthe market is very high, and the chosen organisation is having verystrong market position but to sustain its business for long term, it hasto decrease its cost per unit due to increased in production. Later on,it should focus on gaining its sales in big marketplace (Laitala, 2014).Economic EnvironmentBeing an international company, the organisation has to run theirbusiness according to economical conditions of each country. Theeconomic environment of Spain has grown fast and shown thepositive results in the sale of firm in all over the world. This has beenpossible by high degree of employment with high quality at lowercosts. On the other hand, BREXIT has affected the exchange rate ofpound which increased the inflation rate and appreciated costs ofliving with less disposable income for consumers (ZARA UK's profitsand sales, 2018) . By this the citizens of UK are made to cut theirexpenditure on new clothes. This has affected its clothing sales andprofits. The another reason arises is the downturn in the economywhich rose the unemployment level and due to this more customershave become aware about the price. Social EnvironmentThe social impact on present organisation is the rise in its onlineshopping by its features such the outlets are open 24 hours for theircustomers to shop all the time, and the reduced logistics costs forcedthe firm to spend in different online shops. This has enhanced theirsale by approx 10% . Also, this is having its stores in all over theworld which can fulfil the demand and needs of its customers. Thiscompany can make strategies to maintain strong brand identity inglobal market.

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