Strategic Analysis of Zara: Porter's Five Model, PESTLE, SWOT, McKinsey 7-S Model

STRATEGIC ANALYSIS

TABLE OF CONTENT
INTRODUCTION.......................................................................................................................................3
1. Porter’s five model..............................................................................................................................3
2. PESTLE...............................................................................................................................................4
3. SWOT..................................................................................................................................................6
4. McKinsey 7-S Model...........................................................................................................................7
CONCLUSION...........................................................................................................................................9
REFERENCES..........................................................................................................................................10

INTRODUCTION
There is a requirement of strategic analysis of the tools in the market so that there is a
better function of the business in the market. There are a lot of tools which have to be considered
by the organization so that they can get a competitive advantage. Headquarters of Zara is in
Spain and the products of this company are clothing. The report is going to consist of analysis
through models which are going to be suitable for the organization so that they can plan for the
future and improve in the market.
1. Porter’s five model
This is a model which can help the organization to understand the competition in the
market for them and understand the strengths and weaknesses of the organization as well which
is going to help with the future decisions. This model is given by Michael E. Porter so that the
organizations in the market could have a better functioning for themselves.
 Degree of existing rivalry (High)
Zara is having a lot of competition in the market which the organization has to overcome so
that they can get a better customer base and higher profit margins. Zara has H&M, Gap, etc
competitors in the market which has taken the market share from the business (Kreutzer, 2019).
The organization will have to get new trends and fashion change every month or week if the
organization needs to get a competitive advantage and not share their customers.
 Threat of potential entrants (Medium)
There are a lot of competitors which have come up in this industry over the years which is
why there is a threat for Zara in this factor. Zara has captured the market for themselves which is
why the organization is not having such a great threat for them. The entry of new competitors in
Spain is low because of the customer base the company has made for themselves but globally it a
threat for the organization.
 Bargaining power of suppliers (Low)