Internal and External Analysis of ZARA and Corporate Social Responsibilities

Business Leadership and
Business Environment
Case Study
Table of Contents
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(1) Internal and External Analysis of ZARA (SWOT & PESTLE)...............................................3
Swot analysis...................................................................................................................................3
Pestle analysis..................................................................................................................................4
(2) Evaluation of the changes in the factors of PESTEL which has influenced the opportunities
and threats of the business. Also, the way in which business is addressing their strengths to deal
with the threats and weakness influencing their opportunities........................................................5
(3) Recommend a suitable leadership style from the leadership styles of Daniel Goleman’s
(2000) to ascertain the business objectives......................................................................................6
(4) Corporate Social Responsibilities in the context to Zara...........................................................8
(5) Reflection report.........................................................................................................................9
References......................................................................................................................................10
Books and journals....................................................................................................................10
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(1) Internal and External Analysis of ZARA (SWOT & PESTLE)
Swot analysis
It is a strategic method used by managers to analyse company’s internal situation so that it can
get benefits from external factors. Zara being leading apparel retail firm perform SWOT analysis
on regular basis so that it can retain its position and grow in industry (Jermsittiparsert, 2020).
Various elements of this analysis are as follows:-
Strength:- it include what firm do well, what is unique to it etc various strength of zara
are:-
 Fashionable and unique designs
 Presence in most of the countries
 Innovation used in designs
 Low cost manufacturing
 Increased brand value
Weakness:- this factor comprises of where company can improve, where it is not
efficient, how others see them weak. followings are weakness:-
 Advertisement
 Some low ethical workings
 Particular segment of population as customers
Opportunities:- it comprises of what factors it can take benefits of, how to convert any
opportunities into benefits. Opportunities are as follows:-
 E-commerce
 Potential of its customers
 Business expansion
 Going with trends
 Capturing un-touched market segment
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Threats:- It include anything which have potential to effect business negatively.
 Innovative advertisement by other brands
 Cut-throat competition
 Fluctuation in exchange rates of currency
 Negative attestation by others
Managers of Zara should consider all these aspects and can try to eradicate its weakness
by addressing them properly thus converting them into strengths and they should catch every
opportunity they get by being aware of any threats.
Pestle analysis
It is an analysis tool used by managers of firm to gain macro view of industry’s environment
and work accordingly. This framework let managers take into consideration all external factors
that effects business operations and form policies through which they can grow (Bailey, Mankin
and Garavan, 2018). In this we are going to review pestle framework of Zara which are as
follows:-
Political: - This element includes factors such as governmental policies, international
relation of government etc which effects Zara in following ways:-
 Positive – Favourable changes in governmental policies may fetch some benefits to
them.
 Negative – Constant changes in government may make firm’s policies instable.
Economical:- this include changes in exchange rate, credit cost, inflation and deflation Zara
gets effected in following ways:-
 Positive – Decrease in cost of labour may reduce cost of production of Zara.
 Negative – Fluctuation in exchange rates, inflation and deflation may shake firms
financial stability (Noor, Adi, and Kamaruddin, 2018).
Social:- This factor includes various elements such as demography, age structure in market,
purchasing capacity etc which effects Zara as under:-
 Positive – Young adult age structure of market plus higher purchasing power of
customers may be profitable of Zara.
 Negative – Constant changes in taste and preferences of customers may disturb
production pattern.
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