Context of Business: PESTLE Analysis of ZARA, Leadership Style, CSR, Brexit and COVID-19 Impact

This report discusses the PESTLE analysis of ZARA, including political, economic, social, technological, environmental, and legal factors. It also covers leadership styles and their impact on organizational objectives, corporate social responsibility, and the impact of Brexit and COVID-19 on ZARA. The report is relevant to the subject of business and includes a course code, course name, and college/university.

Context of Business

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
The PESTLE analysis of ZARA.............................................................................................1
Leadership style help to accomplish the organisational objectives .......................................2
The explanation of Corporates Social Responsibility ...........................................................4
The impact of Brexit and Covid 19 on ZARA ......................................................................6
CONCLUSION................................................................................................................................8
REFERENCES ...............................................................................................................................9

INTRODUCTION
Business refers to entity or organisation that sell a service and goods in order to gain the
profits. The main aim of business term is the explanation of fundamental business knowledge
which is implemented in daily basis business analysis and operations(Longo and et.al., 2018) .
The context of business asses to understand the knowledge or information which help to
accomplish the motive of business. In this report ZARA taken into consideration. ZARA was
established by Marta Ortega in 1975 and headquarter of ZARA located in Spain. The ZARA
mainly dealing in perfumes, beauty, swimwear, shoes, accessories and clothing etc. The report
will cover the discussion about PESTEL analysis of clothing industry that impacts on ZARA as
well as leadership style is helpful for organisational objectives. In addition to this, the corporates
social responsibilities and impacts of COVID and Brexit on organisations.
MAIN BODY
The PESTLE analysis of ZARA
The PESTEL analysis refers to strategic framework that generally used to examine the
external environment of business. In context to ZARA, This tool help to render contextual
knowledge about the company's business, its risk, growth targets and brands positioning. The
PESTLE help to ZARA 's managers to make effective decision in order to attain the pre-
determined objectives.
Political factors: The political factors refer to action taken by government such as anti
competition problems, free trade, fiscal policy initiative and corporates taxation. The ZARA is a
Spanish popular brand as it enjoy all the political stability in such country(Majumdar, Shaw and
Sinha , 2020). The political condition of Spain is most suitable for ZARA as such country
support the export and import act ivies. ZARA have main focused on following the political
factors of other nation that help to supply the commodities across the different nations.
Economic Factors: The economic factors involves inflation and interest rates,
unemployment rate and labours cost that impact the organisation( Nudurupati, Garengo and
Bititci ,2021). The economic conditions of Spain is very slow growth rate as country has high
rate of unemployment when compare to other countries. The ZARA takes benefits of low cost of
labours that help to supply the goods at low prices.
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Social factors: The social factor are consumer's preference, buying style, culture and
trends Social factors are important for organisational growth as it more volatile in nature. The
ZARA has huge market value and wide numbers of products list that meet the social trends.
ZARA follow online trends which allow to interact with the wide range of consumers at real
time. The respective company also promotes their products and brand awareness through digital
media (Pang , Kim, and Ko, 2021). The ZARA categorised its dress according to demographics
such as size, race, gender and age in order to meet the social trends .
Technological Factors: The technological factors are more dynamic in nature as it
always invent day by day. ZARA is used big data that help to serve their consumer in innovative
ways and this technology help to managers to make more effective decision. The respective
organisation has used more advanced machinery that help to manufacture the clothes in effective
manners. The ZARA used artificial intelligence that help in operational as well as in retail stores
to work as human brain.
Environment Factors:The environment factors has become the most important concerns
for expand the businesses globally. The whole fashion industry is negatively connect with
wastefulness as consumer modify the preferences and trends. Now a days, consumers have more
conscious for environment as ZARA need to adopt the 100% effective renewal energy(Razak,
Sarpan, and Ramlan, 2018). The most of the organisations have failed to maintain the product
environmental due to they want to gain more and more profits without compromising.
Legal factors; The rules and regulation affect the organisational internal and external
factors the company. The ZARA have more focused on following the rules and regulations of
Spain that help to make the organisational work effectively . However, the respective company
has been accused of copying the clothing designs from Balenciaga and Adidas(Rezaei and
Golzariyan, 2020). The outdated legal systems of Spain are one the main reason for brands to
stealing the design of each other without any essential repercussions.
Leadership style help to accomplish the organisational objectives
There are different type of goleman leadership style that can lead the organisation to
different and experience and culture. The leadership style in organisational management can be
based on personality, local consumer and industry .
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Authoritative leadership: The authoritative leadership refers to create a clear vision of
goal and how to attain it as leaders set the particular instruction (Saleem ,2019). The leader
mainly focus on accomplish the effective outcomes through design the action plan which they
believe as business in directions.
Pacesetting leadership: Pacesetting Leadership style refers to leaders force the entire
teams to perform hard and quick manners to accomplish the task. This type of leadership style is
more energetic so that tasks complete before the deadline(Sigcha and et.al., 2020). This
leadership is helpful for those organisation which fast decision making as they more aim at time
allocation.
Coaching leadership : Coaching leadership is defined as encourages the employment to
create long term development objectives that help them conceive a plan for accomplish them,
This type of leadership style has unique weakness and strength that consider their career and
personal aspiration (Tannam ,2018). This leadership style is the most suitable for those
employees who know their weakness and would prefer to enhance their performance skills.
Democratic Leadership; The democratic leadership enhance the responsibility and
flexibility in employees as it letting staffs themselves. The democratic leadership allows to take
participation in the organisational decision marking in order to gain the skill and
knowledge(Tomczak , 2019). It type of leadership style encourages the employees to get
numbers of views and brainstorms that make more innovative and unique. Democratic
leadership influence the employees behavioural toward company's development and growth.
Affiliative Leadership: The affiliative leadership style suggest the organisation to
maintain the harmony and enhance the loyalty by creating effective emotion bonds. This type of
style renders the freedom to their employees so that they are more connected toward
organisation( Zara and et.al., 2021). This leadership style is suitable in particular job role as it
difficulty to implement in entire organisation .
From the above analysis of leadership style coaching leadership style is most suitable
for ZARA as it helps to organisational leaders to provide effective skill and technique to their
team members. This leadership style assess the organisation identify the weakness, strength and
motivation of employees(Zhu and Chiu, 2021). The ZARA should implement coaching
leadership in weak area of operation so that they can train their employees in order to gain the
effective market. For example, the ZARA wants to introduce a new product in fresh market, In
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this situation, company need to implement the coaching leadership style that help employees to
understand whole area of new products. This style helps maintain the balance of criticism and
praise as it provide guidance the manger to support the employees in hard time. The coaching
leadership style help to enhance the trust value in among employees so that employees more
interactive with other employees. The ZARA' s leaders should more focus on this type of
leadership as it allows to follow the task after delegating so that tasks on right path. If
organisation not follow the effective leadership style so that the organisation decrease the
operational quality. The manager should examine the internal environment of the organisation
and implement the different type of leadership as requirement. Organisation faces worst impact,
if the organisation implement wrong leadership style. The ZARA managers should use the
different leadership style that helps in enhancing the work productivity so that they can take
competitive advantages. The positive culture of company depends on effective leadership style
as it guide the manager to maintain the relationship balance between employees and employer.
The effective leadership encourage the employees to improve the communication that play a
vital role in the organisational development. The leadership style aims at behaviour of
employees so that organisation easily understand the mindset of employees. The effective
leadership style enhance the engagement of employees toward growth of company as mangers
need to motivate the employees every stage of performance. In competitive world, the
organisation more forward ahead from its competitors so they should aim at implementing the
leadership style.
The explanation of Corporates Social Responsibility
The corporates social responsibility is a self monitoring business model which asses to
organisation be socially responsible. It is a concept of management whereby organisation
integrate environmental and social concerns in their organisational business operation as well as
conversation with stakeholders. There are wide ways of organisation can be eco-conscious and
environmental friendly, increasing the equality and enhancing the organisational workplace in
order to maintaining the employees with respect and value. The CSR is a voluntary choice of
individual company to follow the rule and regulation at native level, national level and
international level. Moreover , there are various company to select to execute beyond the legal
obligation as well as admire strong ideas to doing the business in effective manner. The CSR is
plays a crucial role in promoting brand image as it reflect that organisation are doing well for
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people. The company need to prove in the view of people as well as government as company
wants to improve their environment. The CSR asses to company to attract the capitalist to spend
in such company those is more focused on social responsibility. The company apply the
sustainable programs so that the company ahead from all rivalry as it displaying on different
social media website. The most of the companies have required long practice of corporates
social and environmental obligation with major objectives so that they more contributing toward
well growth of society. It is hard to follow the CSR as mostly organisation wants to make profit
margins so that they ignore the focusing on social responsibility. The corporates social
responsibility have provide the strong path that help in improving goodwill of the brand.
In relation to ZARA the respective organisation have more aimed at corporates social
responsibility which asses to enhance the brand value in the different countries. Presently, ZARA
has associated with sustainable development of community and take responsibility for
environmental development. The respective company have taken steps for eliminating the
energy usage by approx. 20% in their entire retail entire as they adapt use of automated
recycling hanger system which pickup plastic material from their stores. The ZARA is mainly
famous for innovative and designable clothing but now ZARA also exploited organic cotton their
particular dress that make more effective toward social advancements. The respective company
have decrease the use of non recycle items as they reuse the product wastage and convert into
attractive product. The ZARA has numbers of stores in multiple countries so that company
move ahead to use of biodegradable plastic hand bags which give out to costumers while buying
the ZARA's products. The hang bags are made of biodegradable plastic are easily break down
through natural process so that it maintain the environment clean that affect by traditional kinds
of plastics.
The ZARA has encouraged the ecological agriculture as it reducing the use of chemical,
pesticides and bleaches which may harm the environment and customers. The main root of air
pollution are generated by petroleum as it affect the entire environment so that company have
neglected the usage of petroleum for footwear production. The respective organisation have
installed the solar systems as well as other kinds of renewable energy source on their production
area. ZARA has proclaimed good news as they use genuine leather instead of animal skin for
jackets and shoes. therefore, it enhance the revenue of the company. However, the labours
condition of given company are not good as they not follow he minimum wages policies that pre-
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determined by the government as it shown risk of country's workforces abuse. The company
have not make any efforts for providing appropriate payments structure for their labours .
Therefore, it created a bad image of organisation. The ZARA help to different counties
government as it helps in eliminating the poverty by offering the wide numbers of job. It also
play a essential role in enhancing the financial conditions of poor level of nations through
import and export. The respective company is also funding educational campaign and supporting
health initiative that help to secure the community. The respective organisation have to focus on
human rights responsibility as company offers fairs trade practices in order to effective
payments structure .
The impact of Brexit and Covid 19 on ZARA
The affect of Brexit on different sectors of organisation as UK took decision to leave the
European union in 2016. The Brexit impact on different type of industry such as energy,
agriculture, pharmaceutical, digital, service,finance service and others as UK government had
designed their own rules and regulation so that organisations faced difficulty to mitigate such
changes. All sectors are impacted by Brexit as it decreased the investment, increased the high
level of migration, shortage of high rate of skilled workforces(Khanifar and et.al., 2018). There
are various issues faced by the ZARA that will mention below.
Border tariffs: The tariffs or taxation play a crucial role in import and export after the
separation of UK. The UK government increased the tax rate that made difficulty for ZARA to
manage the different tax rate in UK.
Economic problems: The business components are operated by the UK have worst
impacted from Brexit as the financial conditions of major counties were not good that period so,
that ZARA had faced challenges in exports and import and its sales have reduced in the last
years.
Intellectual Property: The intellectual property includes trade secrets, copywriting,
trademarks, designs and trademarks. The UK left from European Unions which meant
modification of Intellectual Property laws in UK so that respective organisation affected from
these changes.
ZARA have taken vital initiative to address the Brexit
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ZARA have faced difficulty during the Brexit as UK modified the employment rules and
regulations that created unclear picture(Germani ,2021Gokarna and Krishnamoorthy, 2021).
The respective company have taken crucial decision which asses to reactive the company's
business and boost the supply of products.
Effective Communications: The effective communication play a vital role in
organisational goals as it asses to decision making so that business run on right path. ZARA have
improved effective communication their workplace that help to modify the organisational polices
as per the external changes.
Monitor the Potential Impact: The most of the businesses impact by the Brexit
changes in laws of the nations. The ZARA have monitored the potential impact of Brexit as the
respective organisation assign the time to HR team and their rules to examine the expected
outcomes. The main sphere have taken into consideration such as employees retention, pension,
recruiting strategies and workforces laws.
Tracking and Processing information: The ZARA have dedicated the resource to
collect the knowledge and information so that they can build the contingency plans. The ZARA
have main focused on effective data that help to take the competitive advantage and expand the
brand the across the multi nations.
Employment Laws: The entire employment laws of the United kingdom governed the
members of The European United. After the exit of the UK, the UK government designed their
own laws so that respective company have followed such rules which asses to manage the
smooth business in the UK .
Impact of Global pandemic on business.
The first global pandemic in 2020 had made bad impact on many kinds of companies as
approx. 73% of businesses in that periods. Around one- third of company sealed their business in
that times because of high restriction in multi nations(Berraies, and El Abidine ,2019). In
relation to ZARA, The respective organisation have faced challenges to mitigate the impact of
global pandemic but their sales decreased by each day. The high rate of spread of infection lead
to certain difficulty that will discuss below.
Difficulty in operation: The respective organisation have faced difficulty to handle the
operation as different government have imposed certain restriction of social gathering in
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working areas, factory and other areas. In this condition, there are higher chance of ineffective
communication in their organisational work as apparel sectors requirement of high level of
allocation of task to their employees.
Challenges of decision making: The clothing sector strongly need of decision making
in changing nature as the fast modification in consumer's interest. The ZARA have failed to
make effective decision because it require of top level of researches and examination of past
experience.
Effective initiative taken by the ZARA
Work from home: The respective organisation offers work from home for reducing the
gathering in office so that staffs preform their task effectively aiming to attain the organisational
goals.
Technology: The success of company depend on technological advancement that asses to
make the work creative and innovative(Barykin and et.al., 2021). The respective company have
used ZOOM, Google Meet and other software to attain the company's goals. This type of
software assess to schedule the virtual interview along with asses to enhance strong
communication.
CONCLUSION
The above stated report concluded that examination of external elements are very
crucial for company's growth and success(Alblooshi, Shamsuzzaman and Haridy, 2020). The
PESTLE analysis of effective tools that help to modify the internal changes according to the
external environment. It has been concluded that there are many type of leadership style which
asses to organisation to create a affirmative company in aiming to attain the organisational goals.
The managers of company have to apply the leadership style according to the internal policies
so that they can easily meet the objectives. The effective leadership help to inspire the entire
team members so that they can put their best efforts. The organisations have been faced worst
affected by the global pandemic and Brexit that made difficulty. The organisation have taken
several initiative to mitigate the difficulty and challenges in order to enhance the operational
works.
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