Zara Plc: Impact of Global Financial Expansion on Performance

This report delves into the global financial expansion of Zara Plc, a prominent fast-fashion retailer and a flagship brand of the Inditex group. The research aims to identify the impact of global financial expansion on Zara's business performance. The report includes a research proposal outlining the project's description, aims, objectives, and rationale, followed by a literature review that explores the concept of global financial expansion and its effects on business performance. The methodology section discusses the research approach, including the use of inductive and qualitative methods, and details the sampling techniques employed. The data analysis section presents and discusses findings related to the impact of expansion on Zara's performance, considering both positive and negative aspects such as labor costs, legal regulations, and capital investment. The report also explores ways Zara can improve its performance through financial expansion, such as selling assets, utilizing government grants, employing new marketing techniques, and tapping into untapped markets. A reflective statement is included, evaluating the research methods used and suggesting areas for further study. The report concludes with recommendations based on the findings.

The Case Of Global
Financial Expansion Of Zara
Plc.

Table of Contents
TITLE .............................................................................................................................................1
CHAPTER 1: Introduction .............................................................................................................1
1.1 Research Proposal ................................................................................................................1
(I) Research project description .............................................................................................1
(ii) Research aim and Objectives ...........................................................................................1
(iii) Reasons for choosing research project ...........................................................................2
(iv) Activities and Timescales................................................................................................2
CHAPTER 2: Literature Review ....................................................................................................3
2.1 Introduction...........................................................................................................................3
2.2 Literature Review .................................................................................................................3
CHAPTER 3: Research Methodology ............................................................................................5
3.1 Research Approach...............................................................................................................5
3.2 Methodologies.......................................................................................................................6
(I) Sampling............................................................................................................................6
(ii) Data Analysis....................................................................................................................6
(iii) Cost, Access and Ethical Consideration .........................................................................6
CHAPTER 4....................................................................................................................................7
4.1 Data Collection......................................................................................................................7
4.2 Data analysis, Presentation and Discussion .........................................................................9
CHAPTER 5: Conclusion and Recommendation .........................................................................19
5.1 Conclusion...........................................................................................................................19
5.2 Recommendation.................................................................................................................19
CHAPTER 6: Personal Reflective Statement ...............................................................................19
6.1 Reflect on the research methods used in your project.........................................................19
6.2 Consider research methods that could have been used.......................................................20
6.3 Areas for further research (or consideration)......................................................................20
REFERENCES .............................................................................................................................21
.......................................................................................................................................................23

TITLE
“To identify the impact of global financial expansion on business performance of an
organisation”. A case of global financial expansion at Zara plc.
CHAPTER 1: Introduction
1.1 Research Proposal
(I) Research project description
Globalisation is the spread of technology, product, information and jobs across national
cultures and borders. In economic way, it explains an interdependence of countries around the
world fostered via free trade (Ahmad and et. al., 2018). Along with this, globalisation is
primarily emphasised on the economic side of the globe, such as foreign direct investment,
international capital flow and global trade. For this report, given organisation is Zara which is a
Spanish fast fashion retailer based in Arteixo, Spain. It was founded by Amancio Ortega, Rosalia
Mera in 1975. It is one of the biggest international fashion organisation. The clothing retailer has
approximately 2200 shops in 96 nations and is the flagship product or brand of the Inditex group.
Company is renowned for its capability to develop an innovative product and acquire it to stores
in 2 weeks, while other retail company take six months. Online sales soared of Zara is 41% in
2017 to 10% of the brand's total. Company launched online sales in different nations such as,
Singapore, Thailand, Malaysia, Vietnam and India last year. Along with this, globalisation is
highly impact on financial expansion of Zara in negative and positive manner.
(ii) Research aim and Objectives
Research Aim: Main aim of this research is “To identify the impact of global financial
expansion on business performance of an organisation”. A case of global financial expansion at
Zara plc.
Research questions
 What are the concept of global financial expansion of an enterprise?
 What are the impact of global financial expansion on business performance of Zara Plc? What are the different ways through which Zara Plc can easily improve their performance
through financial expansion?
1

Research Objectives
 To identify the concept of global financial expansion of an enterprise.
 To analysis the impact of global financial expansion on business performance of Zara
Plc.
 To identify different ways through which Zara Plc can easily improve their
performance through financial expansion.
(iii) Reasons for choosing research project
Main reason behind selecting this topic is to analysis the impact of global financial
expansion on business activity and performance of Zara Plc. Globalisation is a biggest concept
that help a multinational organisation to expand their business activity and improve performance
within given time duration (COUNCIL, 2014). With the help of this topic, researcher can easily
improve their personal and professional skills in easy manner. In case of personal development,
an investigator can improve their literature review, data analysis and interpretation skill. Under
professional development, global financial expansion help an investigator to aware about the
concept of globalisation and expand business activities over there. Thus, it essential concept for
researcher to develop their personal as well as professional skill for overcoming issue of research
topic. Along with this, main reason behind selecting Zara Plc is, it is a multinational organisation
and provide job opportunities to people in various number.
(iv) Activities and Timescales
This is consider one of the main and effective part of research used by investigator to
identify starting and ending time period for completion of research activities. Along with this, in
order to identify time duration for closing of research tasks or activities, Gantt chart is consider
one of the best horizontal bar chart which will help an investigator to complete research within
given time period and effective manner (Currie, Gozman and Seddon, 2018). In addition, it is a
form of bar chart that is applied to visually display or show the schedule of a project. In this
chart, different number of activities are included such as development of research proposal,
creation of aims and objectives, literature review, research methodology, data collection, data
analysis, conclusion and recommendation, and at last submission of project. These activities are
2

start on 29-01-19 and ending time period on these activity is 17-05-19. Thus, approx 12 weeks
are needed for completion of research project in systematic manner.
CHAPTER 2: Literature Review
2.1 Introduction
A literature review introduces as a scholarly paper which includes actual knowledge
regarding substantive findings, as well as methodological and theoretical contribution to a
specific area of field (Ezenwakwelu, 2018). Literature review are consider as a secondary
sources, and do not study original or new experimental work. There are different purpose of
literature review which are determine as under:
 Identify innovative ways to interpret prior study.
 Describe the relationship of each activity to others under consideration.
 Resolve conflict or gaps amongst seemingly contradictory previous research.
 Main purpose of literature review is to address all research objectives and questions in
well-planned manner.
 It identifies gaps, inconsistencies and contradictions in the literature.
 It gives a constrictive analysis of the approaches and methodologies of other researchers.
2.2 Literature Review
The concept of global financial expansion of an enterprise
According to Velocity global 2016 Global expansion is an increasingly promising option
for companies that want to hit the next level. International markets tents to open up their gate for
new talent and customer acquisition, which will contribute in creating opportunities to drive
more revenue and innovation. By expansion in a different territory organisation will be able to
enhance their revenue earning capabilities along with providing more employment opportunities
to people.
Global financial expansion comprises of expanding a organisations operation in different
regions of the globe. It comprises of making investment in nations that does not belong to a
company's home. It Is much more then just investing, Along with investment it comprises of
having an actual presences in the countries were they have expanded their businesses. It also
involves an deep analysis of the market where the organisation is expecting to operate. After
3

analysing the market the organisation needs to plan out the entire expansion process. Which will
ensure smooth expansion.
According to Barbara Bean-Mellinger 2018 Global company expansion involves
introduction of product and the organisation to the people of that country. In order to invest into
different region company needs to research about the market and then should decide whether to
expand or not to.
The impact of global financial expansion on business performance of Zara Plc
According to …. there are positive and negative impact of global financial expansion on
performance and success of Zara Plc. Both are determine as under:
In positive manner-
Reducing labour cost- If the organisation is planning to operate it's plant in a country
where the labour cost is low then they can produce product at a much lower cost while increasing
the production. It will also help the organisation to earn more through producing more.
Increased production- As the organisation is expanding it's operations into the different
and untapped region. It will help them to increase the level of production and will also increase
the revenue automatically.
In negative manner-
Legal regulations- In order to financially expand the current business in other region
organisation needs to study the rules and regulations that are existing the region. As the legal
rules and regulation among different countries differ from each other.
Capital investment- In order to expand the current operations of the enterprise in the
different region organisation needs to invest large amount of capital investment that an
organisation needs to make in order to expand for instance if the company is planning to
collaborate with some other brand then the deal will comprise of certain expenditure that neds to
addresses by the company.
The different ways through which Zara Plc can easily improve their performance through
financial expansion
Selling unwanted assets- the business can sell the assets which are no loner used by the
organisation and can use the money to invest in the global market. Through this the money
which have been blocked will also gets releases and it will be effectively used as well in the
operations of the bushiness.
4

Government grants- Different region have different government policies which provide
grant for certain situations such as business expansion, research and in development of
innovation and exporting (Improve your business' financial position, 2018). Organisation will be
able to use this grant in the new market segment which will help the business in monetary terms.
New marketing technique- While the organisation is expanding it's businesses it can
use different marketing tolls such as social media in order to analyse the new region. It is a
cheaper marketing tool and it will help the organisation to save the cost which they were going to
invest in the analysing procures. Through this organisation can use the saved money in other
process.
Reach to a large number of customer- Through expanding the business in the new
region the enterprise will be able to attract a larger number of customer by selling their product
and services to them. It will help the business to increase their sales which will help to build an
strong financial position in the market as compared to others.
Tapping the untapped market segments- For instance the organisation is setting up it's
store into the markets which have not been taped by the company yet. It will help the market to
capture customer into these region and they will also enjoy the first mover advantage which will
help them to create a strong brand image in the minds of customers which will help the
organisation to increase it's sales.
CHAPTER 3: Research Methodology
Research methodology refers as am essential process used by investigator to accumulate
proper information about the study. Main purpose of research methodology is to provide proper
and valid data about the field of study to researcher (Jayasekara, Perera and Ajward, 2018). For
this, different number of methods are used by researcher such as research approach, research
design, research strategy, data collection and data analysis, research instrument etc. All these are
important and valuable for investigator to accumulate accurate information about the impact of
global financial expansion on business performance of Zara Plc.
3.1 Research Approach
Research approach introduces as an effective procedures and plan that consists different
steps such as data collection, data analysis and interpretation. Research approach mainly divided
into two parts such as approach of data collection and approach of data analysis. Data collection
5

approach mainly divided into two parts such as qualitative and quantitative. On the other hand,
data analysis approach basically classified into 2 section which is inductive and deductive
(Kasturi, 2018). Both are essential part for researcher to accumulate accurate data or information
about the impact of global financial expansion on business performance and activity of Zara Plc.
According to the topic, inductive and qualitative research will be used by researcher which will
help in accumulating proper information about the study.
3.2 Methodologies
(I) Sampling
There are two types of sampling which is probability and non-probability. Both sampling
are valuable but according to the topic, non-probability method will be used by researcher.
Convenience sampling as a type of non-probability will be applied because it not need maximum
cost, time and resource of organisation or researcher (Kim and Lee, 2017). Therefore, with the
help of convenience sampling, 40 respondents will be taken into consideration.
(ii) Data Analysis
Data analysis will be completed with the help of thematic analysis. It is a type of
analytical tool and in this case, different themes are made on each questions. It will help an
investigator to easily and minutely analysis response from respondents side.
(iii) Cost, Access and Ethical Consideration
Cost is important and main source which is needed by each organisation or researcher to
do research activities in systematic manner (Litan, 2016). Without this source, researcher is not
able to complete each activities of research in systematic and effective manner.
Along with this, in order to access information to respondents, researcher will used
questionnaire because it provide accurate and reliable data about the study.
Ethical consideration: It is another important and essential part which should be follow
by researcher to complete research activities in ethical manner. There are mainly three principles
which should be follow by researcher such as informed consent, anonymity and confidentiality.
6

CHAPTER 4
4.1 Data Collection
Questionnaire
Q1) Please indicate your gender?
A) Male
B) Female
Q2) Please indicate your age group?
A) 20-29
B) 30-39
C) 40-49
D) 50-59
Q3) How satisfied are you with Zara services?
A) Very satisfied
B) Satisfied
C) Neutral
D) Unsatisfied
E) Very unsatisfied
Q4) Are you have knowledge about the concept of global financial expansion?
A) Yes
B) No
Q5) What are the impact of global financial expansion on business performance of Zara Plc?
A) Positive Impact
B) Negative Impact
Q6) What are the different ways through which Zara Plc can easily improve their performance
through financial expansion?
A) Recover outstanding debt
B) Reduce/rearrange expenses
C) Sell assets
D) Use new marketing techniques
Q7) What are the ways used by Zara to Expand their financial activities internationally?
7

A) Partnering
B) Investment
C) Greenfield venturing
D) Acquisition
Q8) Is Global Financial expansion essential for growth and success of Zara?
A) Yes
B) No
Q9) What are the risk faced by Zara Plc during financial expansion at global level?
A) Impact of Competitors
B) Lack of customer's trust
Q10) Recommend different ways through which company can easily enhance their business
activities or performance.
Q1) Please indicate your gender? Frequency
Male 21
Female 19
Q2) Please indicate your age group? Frequency
20-29 10
30-39 15
40-49 10
50-59 5
Q3) How satisfied are you with Zara services? Frequency
Very satisfied 24
Satisfied 10
Neutral 3
Unsatisfied 2
8

Very unsatisfied 1
Q4) Are you have knowledge about the
concept of global financial expansion?
Frequency
Yes 30
No 10
Q5) What are the impact of global financial
expansion on business performance of Zara
Plc?
Frequency
Positive Impact 25
Negative Impact 15
Q6) What are the different ways through which
Zara Plc can easily improve their performance
through financial expansion?
Frequency
Recover outstanding debt 10
Reduce/rearrange expenses 10
Sell assets 10
Use new marketing techniques 10
Q7) What are the ways used by Zara to Expand
their financial activities internationally?
Frequency
Partnering 10
Investment 20
Greenfield venturing 5
Acquisition 2
Q8) Is Global Financial expansion essential for
growth and success of Zara?
Frequency
Yes 32
9

No 8
Q9) What are the risk faced by Zara Plc during
financial expansion at global level?
Frequency
Impact of Competitors 20
Lack of customer's trust 20
4.2 Data analysis, Presentation and Discussion
Theme 1: Gender of respondents
Q1) Please indicate your gender? Frequency
Male 21
Female 19
21
19
Male
Female
Interpretation: From the above given graph, it has been concluded gender of selected
respondents. For identifying impact of global financial expansion, 21 out of 40 are male
respondents whereas 19 are female respondents.
Theme 2: Age group of respondents
10

Q2) Please indicate your age group? Frequency
20-29 10
30-39 15
40-49 10
50-59 5
10
15
10
5
20-29
30-39
40-49
50-59
Interpretation: According to the above given data or graph, it has been determined age
group of respondents. In this 10 out of 40 respondents are under 20-29 age group, 15 are belong
under age group of 30-39, 10 are 40-49 and remaining are belongs under 50-59 age group. Thus,
majority of respondents are belongs under 30-39 age group.
Theme 3: Satisfaction level of customer's
11

Q3) How satisfied are you with Zara services? Frequency
Very satisfied 24
Satisfied 10
Neutral 3
Unsatisfied 2
Very unsatisfied 1
24
10
3
2
1
Very satisfied
Satisfied
Neutral
Unsatisfied
Very unsatisfied
Interpretation: According to the above give data, it has been concluded satisfaction level
of customers about Zara's product and services. In this, 24 out of 40 respondents are very
satisfied, 10 are satisfied, 3 are neutral, 2 are unsatisfied and remaining respondents are very
unsatisfied.
Theme 4: Knowledge regarding the concept of global financial expansion amongst
respondents
Q4) Are you have knowledge about the
concept of global financial expansion?
Frequency
Yes 30
12

Q4) Are you have knowledge about the
concept of global financial expansion?
Frequency
No 10
30
10
Yes
No
Interpretation: From the above given information, it has been concluded knowledge
about the concept of global financial expansion among respondents. In this 30 out of 40
respondents have knowledge about this concept, whereas 10 respondents not have knowledge
about the4 same.
Theme 5: Impact of global financial expansion
Q5) What are the impact of global financial
expansion on business performance of Zara
Plc?
Frequency
Positive Impact 25
Negative Impact 15
13

25
15
Positive Impact
Negative Impact
Interpretation: From the above given information or graph, it has been concluded impact
of global financial expansion on business performance of Zara Plc. In this 25 out of 40
respondents have view as global financial expansion positively impact on business performance
by increasing their market share. On the other hand, 15 respondents have opinion as it negatively
impact on Zara's performance by increasing competition.
Theme 6: Ways to improve performance
Q6) What are the different ways through which
Zara Plc can easily improve their performance
through financial expansion?
Frequency
Recover outstanding debt 10
Reduce/rearrange expenses 10
Sell assets 10
Use new marketing techniques 10
14

10
10 10
10
Recover outstanding debt
Reduce/rearrange expenses
Sell assets
Use new marketing techniques
Interpretation: From the above given information, it has been concluded different ways through
which Zara Plc can easily enhance their performance through financial expansion. For this,
respondents are have equal views about the various ways such as; it recover outstanding debt,
reduce expenses, sell assets and use new marketing techniques.
Theme 7: Entry modes
Q7) What are the ways used by Zara to Expand
their financial activities internationally?
Frequency
Partnering 10
Investment 20
Greenfield venturing 5
Acquisition 2
15

10
20
5
2
Partnering
Investment
Greenfield venturing
Acquisition
Interpretation: From the above given data or chart, it has been concluded different types
of entry modes used by Zara Plc to expand their financial activities over international level. 10
out of 40 respondents have view as partnering is best options, 20 are have opinion as investment
is best option for company, 5 are suggest, company should use greenfield venturing and
remaining respondents recommend Zara should follow acquisition.
Theme 8: Significance of global financial expansion
Q8) Is Global Financial expansion essential for
growth and success of Zara?
Frequency
Yes 32
No 8
16

32
8
Yes
No
Interpretation: From the above given data, it has been concluded importance of global
financial expansion for success and growth of Zara Plc. This statement is agreed by 32 out of 40
respondents whereas 8 respondents are not agree according to the same.
Theme 9: Risk associated during financial expansion for Zara Plc
Q9) What are the risk faced by Zara Plc during
financial expansion at global level?
Frequency
Impact of Competitors 20
Lack of customer's trust 20
17

20 20
Impact of Competitors
Lack of customer's trust
Interpretation: From the above mentioned information,it has been determined risks faced
by Zara Plc during global financial expansion. For this, respondents have same opinion as impact
of competitors and lack of customer's trust is main issue.
Discussion
From the above discussion it can concluded that financial expansion of an enterprise
comprises of expanding it's business activities in the other market regions. It both negative and
positive impact on the functioning of the business (Ma and et. al., 2016). In positive ways it help
the organisation to increase it's production thorough decreasing the labour cost in negative way it
comprises of study of the new region in which the firm wants to operates and certain factors such
as political and economic environment of the region can have a immense impact on the
performance of the business in that region. Later part comprises of the ways by which the
organisation can improve their financial performance by expanding their businesses in the global
world.
18

CHAPTER 5: Conclusion and Recommendation
5.1 Conclusion
From the above mentioned information, it has been concluded, global financial expansion
is essential for an organisation because with the help of this, they can easily increase their market
share (Ramzan, 2018). Along with this, more than half of the population are aware about the
concept of global financial expansion and its positive and negative impact on business activities
and performance. Thus, globalisation is essential for an organisation by increasing its sales,
market share and performance also.
5.2 Recommendation
From the above given information, it has been recommended, global financial expansion
assist a Zara Plc to develop their business activity and growth easily. During business expansion
at global level, different number of risks are faced by company such as increasing competition,
lack of customer's support, rules and regulation, lack of communication channels etc. All these
are major issues that negatively impact on growth and success and company. In order to
overcome such type of issues, some recommendation are provided to the Zara which are
determined as under:
 Company should follow all rules and regulation in proper manner which will help in
reducing issue related to the government's legislation.
 Zara should provide quality products or services at reasonable price which will help them
in overcoming competition issues.
 Company should use different types of communication channels which will also support
them in increasing customer base.
CHAPTER 6: Personal Reflective Statement
6.1 Reflect on the research methods used in your project.
There are different types of research methods used by researcher such as qualitative and
quantitative research, primary and secondary research, research approach, questionnaire etc. All
these are essential which will help an investigator to collect accurate and reliable data about the
topic (Satpathy and et. al., 2014).
19

6.2 Consider research methods that could have been used.
In order to collect accurate information about the research topic, questionnaire will be
applied by researcher. It is more effective and useful instrument which will support an
investigator to gather proper and useful information about the impact of global financial
expansion on business performance and growth of Zara. Interview is a alternative method which
could be follow by investigator. It will also help an investigator to gather accurate data about the
study (Smith and Rupp, 2017).
6.3 Areas for further research (or consideration)
In order to fulfil conflict and gaps in this research, further research will be conduct by an
investigator. It is essential and significant for investigator to do research in more effective and
systematic manner (Widjaja, 2015). Thus, global financial expansion is a biggest concept that
help an organisation to improve their growth and success as well as accomplish long term goals
and objectives within given time duration.
20

REFERENCES
Books and Journals
Ahmad and et. al., 2018. Low Private Investment and Government Failure as the Binding
Constraints to Pakistan’s Economy Growth Diagnostics Analysis. European Online
Journal of Natural and Social Sciences: Proceedings.7(1 (s)). pp.pp-76.
COUNCIL, P., 2014. CANEGROWERS Policy Committee Structure Australian Canegrower,
p.4.
Currie, W. L., Gozman, D. P. and Seddon, J. J., 2018. Dialectic tensions in the financial markets:
a longitudinal study of pre-and post-crisis regulatory technology. Journal of Information
Technology.33(4), pp.304-325.
Ezenwakwelu, G. C., 2018. EFFECTS OF FINANCIAL INCLUSION ON SELECTED
MACROECONOMIC VARIABLES IN NIGERIA. GLOBAL JOURNAL OF
APPLIED, MANAGEMENT AND SOCIAL SCIENCES.15.
Jamaleh, M., 2016. On the Causal Relationship between Stock Markets Valuation and Foreign
Direct Investment: A Conceptual Case of India.
Jayasekara, S. S. D., Perera, K. W. and Ajward, A. R., 2018. Fair Value Accounting Practices
and Financial Performance of Commercial Banking Industry. World.8(3). pp.122-137.
Kasturi, R., 2018. PERFORMANCE ANALYSIS OF OMAN'S BANKING SECTOR USING
SELECT FINANCIAL INDICATORS. Journal of Commerce & Accounting
Research.7(4.
Kim, K. and Lee, J. Y., 2017. Estimating the effects of FX-related macroprudential policies in
Korea. International Review of Economics & Finance.50. pp.23-48.
Litan, R., 2016. America's Brewing Debt Crisis: What Dodd-Frank Didn't Fix. Foreign
Aff..95.p.111.
Ma, E. and et. al., 2016. Anticipating Chinese tourists arrivals in Australia: A time series
analysis. Tourism management perspectives.17. pp.50-58.
Ramzan, I., 2018. Role of Financial Derivatives in Risk Management. Available at SSRN
3264962.
Satpathy and et. al., 2014. Transformation from Class Banking to Mass Banking through
Inclusive Finance: A Paradigm Shift. Asian Social Science.10(19). p.11.
Smith, A. D. and Rupp, W. T., 2017. Wealth Management, Building Value through Investing,
and Contingency Plans after the Global Recession: Multiple Case Studies. ADVANCES
IN BUSINESS AND MANAGEMENT, p.33.
Widjaja, H., 2015. The Effect of Theta Variable Before and After of Screening Process to Every
Changes of Price and Volume of Jakarta Composite Index, Application of TSR Method.
Application of TSR Method (July 30, 2015).
Xinhua, H. and Xumei, Z., 2015. Cluster Relocation, Driving Factors and Industrial Effects:
Taking Laptop Industry for Example. Reform. (2). p.6.
Online
Velocityglobal. 2016. Global Expansion Definition and Best Practices. [Online]. Available
through:<https://velocityglobal.com/blog/global-expansion-definition-best-practices/>.
Barbara Bean-Mellinger. 2018. What Is a Global Company? [Online]. Available
through:<https://bizfluent.com/info-8373292-global-company.html>.
21

Improve your business' financial position. 2018. [Online]. Available
through:<https://www.business.gov.au/finance/accounting/cash-flow-and-budgeting/
improve-your-business-financial-position>.
22