Strategic Management of Zara - Report

STRATEGIC
MANAGEMENT

Table of Contents
EXECUTIVE SUMMARY ............................................................................................................1
INTRODUCTION...........................................................................................................................1
EXTERNAL ANALYSIS................................................................................................................1
Effect of external factors on strategic management of Zara.......................................................1
Porter's five force analysis of Zara..............................................................................................3
INTERNAL ANALYSIS.................................................................................................................4
EFFECTIVENESS OF INTERNAL ELEMENTS AGAINST TO EXTERNAL FACTORS........7
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................9
.......................................................................................................................................................10

EXECUTIVE SUMMARY
Zara is an international company and they want to retain their market share and as well as
to improve their sales and market share by making positive changes in their products and
services. Pestle, Porter's Five Forces and McKinsey 7-S framework are some models which is
used in this report. Changes are essential for a company which is working in the international
market so it is essential for them to be aware rivalry organisation and market demands. External
factors creates compulsion to make changes in organisation and internal factors can determine
how much changes they can do according to external factors.
1

INTRODUCTION
Strategic management refers to as the implementations of decisions, initiatives and goals
that are made on behalf of investors based on the availability of resources and assessment of
various internal and external factors within an environment (Hill, Jones and Schilling, 2014).
Strategic management provides pathway for an firm that helps in specifying and developing
organisational objectives and ultimately achieving them. It is an art of formulating, implementing
and evaluating the cross functional decisions of business. Zara Company was established in the
year 1975 by Amancio Orgega located in north west part of Spain. It is of the leading retail
fashion company with approx 2692 stores in across 62 countries all over the world by the end of
2005. This report aims to showcase influence of internal and external factors on the strategies
and functional management policies of the company. In this report it is highlighted that there is
need for flexibility in strategic management and practical limits of corporate strategies.
EXTERNAL ANALYSIS
Effect of external factors on strategic management of Zara.
External factors are highly influential in roads of achieving organisational objectives.
These factors shapes the organisational strategies and decision making process. Strategic
management is important and needs to be planned according to the environment it is operating
and their potential effect the operations of organisation (Slack, 2015). Strategies are planned so
as to get competitive edge over the other and that cannot be analysed without taking care of
industry and competitors environment. Some of these factors that effect the working of Zara are
as follows:
 Political factors: Zara is an multinational clothing retailer and has its stores all across the
globe where it has to face many political conditions. Government makes political
decisions and are responsible for making political environment in country. Zara has to
make decisions according to multiple political environments and it changes from country
to country. Since political condition is changing throughout the globe and hence has to
change its plans effectively. Zara has its main distribution centre in Spain where it is
provided with stable political environment for its growth. Due to Brexit one of the major
political decisions of the current times, there will be change of policies throughout the