Zara Company Environment Assessment: PESTLE Analysis and Environmental Issues

Zara Company
Environment assessment
Environmental issues
Name of the Author
University Name-

Executive Summary
There are several factors which may positively and negatively influence company in
short term and long run. Management needs to take proper strategic management plans to
achieve the certain goals and objectives. The PESTLE analysis is one of the strategic tool
which assists in evaluating all the external factors such as political, social, environment,
technological, legal and economic factors of Company. In this report, Zara Company has
been evaluated and determined that company has good potential in the market and the
positioning strategy of company in market is also very effective. The main strategy of Zara is
to lead the market with its cost leadership and product differentiation strategy. Zara Company
has achieved remarkable growth in the international market and selling modern designs that
public needs at affordable price.

Table of Contents
Executive Summary...................................................................................................................1
Introduction................................................................................................................................1
PESTLE analysis........................................................................................................................2
Task-2.........................................................................................................................................7
Environmental issue...................................................................................................................7
Recommendation......................................................................................................................12
Conclusion................................................................................................................................13
References................................................................................................................................15

Introduction
With the increasing ramified economic changes, each and every organization needs to
take proper strategic decisions to run the business effectively. Each and every organization is
affected by several internal and external factors which need to be undertaking by
management before implementing the effective strategic decisions making. There are several
strategic tools which could be used to assess the internal and external business factors before
implementing the effective strategic decision making. There are several internal and external
factors have been analyzed which assists in grabbing more potential market. In this report,
PESTLE analysis have been undertaken to identify the political, social, environment,
technological, legal and economic factors of Zara Company. after that environmental issues
of the company has been analyzed to determine whether Zara Company has good potential in
the market or not.
Description of Company
It is Spain based clothing and accessories Retailer Company founded by Duo
Amancio Ortego and Rosalia Mera under the umbrella of Inditex Group. Zara Company has
opened up more than 1700 stores. Zara Company has been indulged in selling clothes and
modern designs that public needs at affordable price to attract wide range of clients on
international level. Fashion director Louis Vuittond has been described it as one of the most
devasting retailer in the world (Zara Company. (2017).

(Zara Company. (2017).

Task-1
PESTLE analysis
It is the one of the most popular tool that helps to analyse external factors affecting
the organization. PESLTE is ideally used when manager attempt to identify factors pose as
threat to Zara Company or opportunity which company could use to climb the ladder of
success path. However, in order to analyse these all external factors, the below give table
have been used (Zara Company. (2017).
PESTLE points Factors Opportunity or threat Reason and comment
Political factors These factors are
associated with the
government policies,
legislative
frameworks, tax
regulation, trade
restriction and
taxation policies.
Political factor
mainly demonstrate
the legal and
economic aspects as
per the designed
political Zara plans
to expand factors. It
is analyzed that
whenever its root to
another country, it
has to designed
strategic planning as
per the political
The less restricted
policies and
international trade
program have
allowed Zara to
expand its business
on international
level. Currently Zara
has set up strong
business in Spain due
to the positive
political factors
(Lopez, and Fan,
2009).
The main reason of
liberal political
factors of Spain is
based on the
government strategic
planning to increase
its overall foreign
direct investment in
country. The
increased FDI is
required for the
increased GDP rate
of Spain (Bach, and
Allen, 2010).