BM461 Global Business Environment: Zara SWOT & Impact Analysis

This portfolio provides a comprehensive SWOT analysis and operational impact assessment of Zara within the global business environment. The SWOT analysis identifies Zara's strengths, such as its renowned brand and strong supply chain, weaknesses like limited advertising, opportunities including e-commerce expansion, and threats from competitors. The operational impact analysis focuses on the marketing and human resource management departments, highlighting their roles in enhancing brand image, attracting customers, and improving employee engagement. The analysis concludes that understanding the business environment and conducting regular SWOT assessments are crucial for Zara's continued success and growth.

External Environment
Research and Analysis
Portfolio

Table of Contents
INTRODUCTION...........................................................................................................................3
Main Body.......................................................................................................................................3
SWOT Analysis......................................................................................................................3
Operational Impact Analysis..................................................................................................3
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................4

INTRODUCTION
Business environment includes the factors and forces which influence the functioning of
business activities and it is uncontrollable, Organisation cannot control the factors as it is beyond
their control. The Business environment forces include suppliers, customers, government,
competitors, legal factor, social factor, political factor, environmental factor and technological
factors (Aerni, 2018). The Business environment includes the forces that can create an impact on
Organisation’s ability to maintain strong customer relationship. Global business environment
means the global forces that could influence the performance and growth of International
business. The Portfolio consist the SWOT analysis and Operational Impact analysis on the
Organisation. The Chosen Company for conducting this portfolio is Zara; it is a Spanish brand
which deals in clothing, beauty products, accessories, swimwear, shoes and perfumes. The
Organisation is located in Galicia, Spain and it was founded in 1975.
Main Body
SWOT Analysis
SWOT analysis is one of the tools of strategic management which helps in finding out the
internal factors that affects the ability of Organisation to perform in Market. The analysis
includes four factors that helps in finding out what the Company is doing well, in which field
they are lacking, how to grab the opportunities and what are threats for which firm have to
prepared.
Strength
Zara is a renowned Brand which is famous for its unique designs; the company has
various designers who understand the Brand. The Clothes of Zara is beautiful, elegant, premium
quality and the product finishing is fantastic. The Organisation has lot of varieties such as office
wear clothes, casual clothes for men, children, women and party wear clothes. Company has
strong presence in Market with varieties of stores across the globe. To enhance the brand value
and image, Zara never come in any controversies and try to handle the situation very calmly
when it came across them (Cherrad, 2020). The Brand has strong control over its Supply chain;
they get the designs form the conception to Outlet in 2 weeks.
Weakness

The Weakness of Company is that they don’t sell something unique or different from its
competitors that attracts customers towards the Outlet. Zara doesn’t advertise their products
which can double the profits and turnover of the Brand. Due to lack of advertising, Organisation
face problem to attract large number of customers with their products and Brand. The Company
face problem of centralised distribution system which means if any technical problem occurs in
system it can collapse the whole distribution network.
Opportunities
Zara can grab the opportunity of expanding its business and presence on online e-
commerce sites which helps in increasing sales and profitability of Company. The Organisation
must flagship some designs on their store which means some design which never get out dated
and have great demand, this helps in increasing the Brand image and identity. Zara must expand
its business in new market so, company must kept their eyes on emerging market where
customers spending are increasing and can spend on semi premium brand so that they can raise
their standard of living (Grose, 2021).
Threats
For Zara the threat can be its competitors, there are several competitors of Company in
Market such as H&M, Mango and Vero Moda. But here Zara get an advantage as its competitors
brand sell their products at premium price as compare to Zara. The Organisation gives much
quality products with new designs at reasonable price from its competitors. Zara must collaborate
with International designers as they didn’t collaborate with any famous international designers
like H&M collaborate. So Company must collaborate with International designers so that they
can get more better designs which helps in increasing its reputation and growth.
Operational Impact Analysis
Marketing Department
The Marketing department of Zara plays a significant role in increasing the brand image
and value in Market. They only develop innovative ideas to promote the brand and reach the
maximum number of audience. With their creative and innovative marketing strategy, the
Company has created its position in Market (Kreutzer, 2019). The responsibility of marketing
manager is to reach the target audience and attract them with their varieties of products with
beautiful designs. The Marketing department conduct the market analysis and identify the latest
trend so that they can grab an opportunity by producing the products according to latest trend.

This strategy helps in attracting more and more customers as they like to wear trendy clothes so
that they can walk with latest fashion. The Market manager is responsible for keeping an eye
over the competitor’s action so that they can know what they are doing, weakness, strength, the
products which they are launching and how to avoid the mistakes which their competitors had
made (Shukla and Pattnaik, 2019).
Human Resource Management
The Human resource management also plays an important role in Zara, as they are the one
who select the suitable candidate for the Company. The Main aim of Human resource
department is to select the employee who can contribute its best in making the business
successful and give their innovative and creative ideas through which company can increase its
brand image and value (Orji, 2019). They develop a strategy for the Organisation by increasing
employee’s perception and providing better experience to them by increasing their efficiency and
performance. The human resource management always look out the strategies through which
they can increase the employee engagement as the success of Zara depends on success of
employees.
CONCLUSION
From the above information it is being concluded that business environment includes
various forces which creates a huge impact on the Company’s abilities and performance due to
which they can face problem in achieving the goals and objectives. The Company must conduct
the SWOT analysis to identify the factors that can influence its growth. Organisation must focus
on attracting their customers, employees and suppliers as they are the main ingredient which can
affect the internal environment of Business.

REFERENCES
Books and Journals
Aerni, P., 2018. Global business in local culture: The impact of embedded multinational
enterprises. Springer.
Cherrad, L., 2020. Comparative financial analysis between Zara and Mango.
Grose, V., 2021. A Practical Guide to the Fashion Industry: Concept to Customer. Bloomsbury
Publishing.
Kreutzer, R. T., 2019. Tools for the Strategic Analysis. In Toolbox for Marketing and
Management (pp. 89-142). Springer, Cham.
Orji, C. I., 2019. Digital business transformation: towards an integrated capability framework for
digitization and business value generation. Journal of Global Business and
Technology. 15(1). pp.47-57.
Shukla, M. K. and Pattnaik, P. N., 2019. Managing customer relations in a modern business
environment: towards an ecosystem-based sustainable CRM model. Journal of
Relationship Marketin. 18(1). pp.17-33.