Strategic Analysis of Zara: Opportunities, Threats, and Key Competences

Strategic Analysis
Report

Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
External Analysis to identify a set of Opportunities and Threats................................................3
Resources and key competences of the organisation...................................................................6
Strategy that the company implemented recently......................................................................10
CONCLUSION..............................................................................................................................10
REFERENCES................................................................................................................................1

INTRODUCTION
Strategic analysis is a process with the help of which an organisation analyses various
factors that has impact on the organisation so that they can deal with them effectively. This
facilitate the organisation in decision making and for this they need to undertake strategic
planning as this facilitate in establishing various goals and objectives (Hamilton and Webster,
2018). It is important for the organisation for consistently analysing the business environment so
that they can determine various opportunities and threats. Such analysis plays crucial role when
they have any mission or gaols that they have to achieve. For this report the organisation that is
taken into consideration is Zara, which is a multinational fashion retailer offering a wide variety
of fashion clothes. In this report the strategic review of the company is done which is based on
the current position of the market. They focusses on continuously adopting changes that are
taking place in the market which make them unique organisation that offers differentiated
products. For this the external and internal environment is analysed with the help of which the
various opportunity and threats can be identified in context of various opportunities and threats
of the company.
MAIN BODY
External Analysis to identify a set of Opportunities and Threats
For keeping an organisation into a dominating position it is important for them to analyse
various factors that has ability to influence them. Organisations need to determine the impact of
various external factors that have direct impact on the operations of the organisation. To
determine the opportunities and threats that are present in the business environment various
analysis tools are used by the organisation. It can be done by way of PESTLE analysis, Porter's
five force analysis as they both gives a significant view of the market factors (Hadaya and
Gagnon, 2017). With this the level of the competition can be analysed along with this various
attractions can be identified. The PESTLE analysis for Zara is done which is given below:
PESTLE Analysis is a framework with the help of which various macro environmental
factors are analysed that has profound impact on the organisation. With the help of this
performance of the organisation can be improved. The analysis is given below:
Political Factors: Zara is a Spanish brand which was born out from European Union and
expanded their business worldwide. They have a strong network with the help of which they

ensure effective trade which facilitate them in importing raw material and exporting finished
goods. The market of Europe is one of the biggest market for clothing and textile. The customer
base of Zara is broad in all the European countries due to which they do not have to pay extra
tariffs. The financial regulations which are imposed by the government has impact on the smooth
functioning of the organisation (Irfan and et. al., 2019). This has positive impact on Zara as
with the help of this they can easily expand their market by expanding in their business in
untapped market.
Economic Factors: The economic environment of UK is growing which has positive
impact on the sales of Zara and thus has impact on the overall sales of industry. Because of high
unemployment and high population, the wages to the employees decreases and it reduces overall
cost of the company due to which they can focus upon enhancing the quality of the products on
reduced prices. This is an opportunity for the business as with this they can increase their market
share easily in the existing market.
Social Factors: With the increasing use of internet the preference of the customers are
changing as now they like to purchase through online medium. This has advantage for the
customers as they can purchase any time from any place along with this the customers can
compare prices with others. Due to this the pressure on Zara increased for going online due to
this they opened multiple stores online. But this is an opportunity for them in near future as with
this they can increase the demand for their products significantly (Engert and Baumgartner,
2016).
Technological Factors: For being competitive it is important for the companies to adopt
various technologies that are prevailing in the market. This facilitates them in improving the
satisfaction level of the customers. Zara has recently adopted RFID technology which will
facilitate them to reduce the timing of determining the location of the product as with this they
can determine the location of the goods which are demanded by the customers. This is an
opportunity for Zara as with this they can improve the satisfaction level of the customers. But
due to fast growing business environment and changing technology the requirement of adopting
such technology increases for managing the competition and this is a threat for Zara.
Legal Factors: To protect the interest of the consumers various implications are imposed
by the government whose implications are to be fulfilled by the organisation. The organisation
such as Zara uses copyright laws for protecting themselves. This provides them opportunity to