PESTLE Analysis, Leadership Styles, and CSR of Zara

Context to Business

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
PESTLE Analysis of Zara......................................................................................................1
Different types of leaderships style........................................................................................3
Corporate Social Responsibility followed by Zara................................................................5
Effects of Brexit and Covid-19 on business with their solution............................................7
CONCLUSION................................................................................................................................9
REFERENCES .............................................................................................................................10

INTRODUCTION
Business refers to an enterprising or organizational entity that has an engagement in
commercial, professional, or industrial activity, it can be either for-profit entities or non-profit
entities.(Gitman, McDaniel and Shah, 2018) Business is an economic activity that includes the
purchase, services, sale, exchange, and production of goods with a motive to earn profit and
satisfy customers needs. Zara is a Spanish apparel retailer company, located in Arteixo, Spain
which was founded by Amancio Ortega and Rosalia Mera in 1975 . The organization has a
specialization in fast fashion with its products that includes, accessories, swimwear, perfumes,
clothing, beauty, and shoes. In this report, there will be a discussion about the external
environmental factor that may impact a company, with the help of PESTLE analysis. A brief
about different leadership styles that can help a firm in order to achieve business objectives.
There will be an analysis of Corporate Social Responsibilities that the company is following in
its business operation. Lastly, the effects that the organisation has faced due to Brexit and Covid-
19 and how the business has addressed that situation.
MAIN BODY
PESTLE Analysis of Zara.
PESTEL analysis is a framework that helps to understand the dynamic impact of external
environment on the business. To maintain the growth, profitability,competitive advantage, the
respective industry make analysis of macro environment through this framework.
Political factor :
Political factor includes political policy and stability, taxation and labour laws,
international regulation etc. Zara being a Spanish retail brand, has successfully established the
extensive trade framework through which it can import the raw materials and export finished
goods. (de Sousa and Castañeda-Ayarza, 2022) In context of political factor, operating in
European Union agreement, it sends it merchandise across the world with little cost and effort. It
has benefited massively to brand as it also gives access for the international trade without giving
extra border tariffs which helps to increase the sales.
Economical factor:
It deals with unemployment rate, interest rate, economic growth, fiscal policy etc.
Respective company is one of the popular brand in clothing which is relatively less expensive.
1

As Spain faces low economic growth which seriously deteriorate the status of financial position
of the company. With continuance to this, the exit of Brexit lead to decrease in pound which
affected the inflation rate through which employment got influenced and the spending power of
consumer became less. Moreover, it has made decline in the overall sales of the Zara.
Social factor:
It includes population growth, cultural trends, immigration rates, demographic structures
etc. With reference to the chosen company, it delivers a good quality product with reasonable
rate to the consumers. It gives more focus on corporate social responsibility which influences the
decision of customers to retain with the firm. It has to work according to the ongoing social
trends to make investment more worthy. Zara mainly does its research and produce product
based on the local and specific cultural group to gain attention of customers.
Technological factor:
It includes innovation in digital technologies, cyber crimes trends and security, trends in
automation etc. Change in technology is making business to be more customer oriented. Zara has
responded and coordinated well with utilizing the power of technology to gain profit. It is
working and managing its inventory and customer effectively and efficiently. The firm
coordinate and communicate with its customers through web presence also, where entire world's
consumer get response from the company. The proper use of data and information helps the firm
to make proper analysis of customer preference because its important to know the taste and
preference of consumer to gain more profit.
Environmental factor :
It includes climate change, waste disposal, weather ,natural disaster, sustainability etc. In
21st century consumer are being more oriented towards ozone-friendly products. So, Zara's parent
company Inditex is making 100% eco efficient store which consume less energy and water. The
firm is also committed towards recycling of the waste material generated while producing the
product. (Alanzi, 2018) The brand is giving more attention on climate change, biodiversity and
other environmental issues in depth.
Legal factor:
It deals with the privacy laws, trade and commerce policies, labour laws etc. Zara has to
work with certain legal structure to make its operation smooth so that it compliance with the
2