Strategic Management - Assignment Solved
Added on 2021-04-21
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STRATEGICMANAGEMENTContents
1Introduction...........................................................................................................................................2Background of the company..............................................................................................................3External environment of Inditex........................................................................................................3Internal environment of Inditex.........................................................................................................4Summary Swot...................................................................................................................................5Strategy evaluation............................................................................................................................6Three main strategic issues that Inditex is facing...............................................................................7Recommendations.................................................................................................................................8Conclusion.............................................................................................................................................9REFERENCES....................................................................................................................................10IntroductionIn the modern business environment it has become crucial for the firms to give propercare towards their strategic affairs. A comprehensive strategic management helps a companyto achieve all the objectives in the given time frame (Lasserre, 2017). It is also essential for
2the firm to understand the internal and external environment around their business.Evaluation of environment helps in making strategic decisions. Apart from this there aremany strategic issues that are faced by an organisation. Company must take use of itsstrengths so as to tackle the problems that are faced by them. Industria de Diseno Textile isSpanish multinational clothing firm that is headquartered in Arteixo, Galacia. It is the biggestfashion group around the globe and operates in around 93 nations with approx. 7,200 stores.Its flagship store is Zara. This report highlights the internal and external environment ofInditex. It also illustrates about the strategic issues that are faced by the company as well asthe strategies they are using for their business.Background of the companyInditex is a Spanish retailer that is operational worldwide. It is operational in 93nations. It is having a famous flagship store named Zara. Apart from this it owns other chainslike Zara homes, Massimo Dutti, Bershka, Stradivarius, Oysho, Uterque and Pull and Bear.The majority of its stores are owned by any corporates and its franchise is present in thenations where corporate property cannot be foreign owned. This company is known for itsdistinct business approach where the company brings very small amount of new stocks forthe new seasons, takes a consumer feedback and then change the products on weekly basis.This company is known for its production capacity where new styles are prototyped in just 5days. It takes only 15 days to go from design to store shelves (Inditex, 2018). This companywas established in 1960’s and opened its first store Zara in 1975. It grew at a very fast rateand sooner it spread in the whole Spain. In the earlier days company was known for itsdesign. Later in 1990’s company started opening new stores and factories and companieswith different names. Presently it owns online Zara retail store. According to its financialreport of 2016, company had generated revenue of 23.11 billion euros with net income ofaround 3.161 billion euros. Its employee strength is around 162,450.External environment of InditexPolitical: There are many political ties that are coming up and breaking down in manyparts of the world (Arrigo, 2013). This had created complication for the business ofInditex. This is due to the fact that trade policies and taxes totally depend on thepolitical relation between the two nations. Political decisions such as Brexit had agreater impact on the operations of the firm (Epstein & Buhovac, 2014).
3Economic: In many parts of the world especially Europe from where this companybelongs to is facing economic instability. Inditex has a large amount of cash reservewhich will help them in these kinds of financial challenges.Social: Society has changed and so is its demand (García-Álvarez, 2015). People lookfor the clothes that are in trends and in the age of digitalisation the spread of thedemand is very fast. With the fast operational management of Inditex this companycan easily fulfil the demands of the consumers all around the world.Technological: In the clothing industry there have been a lot changes noticed in thepast few decades in terms of technology in use (Kim, 2013). The transformation in theindustry is very fast and companies like Inditex have to be ready for it.Legal: The legalities related to retail business is changing at a very fast speed. Theselegal changes have to be dealt with proper care so that they do not face any legalitiesissues in the future. Companies need to make sure that they follow all the rules andregulations made by several governments all around the world.Competition: Competition in the market is rising at much faster speed. It has made theocean red. This company is facing competition from both local and internationalcompetitors. Some of the biggest brands like Gucci, Ikea, D & G and many more havethe capability to change the trends in the market which can be dangerous for thecompany (Dawson & Mukoyama, 2014).Internal environment of InditexStrengthsIts operational mechanism helps them to deliver products to the shelves at a veryfaster rate (Inditex 2018).It is having a very strong brand name in the market.String demand and supply chain that helps them in their operations in 93 markets.Strong technological use and employee base is highly capable in speeding up theprocess of their growth.Highly lower cost products as compared to other competitors.Weakness
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