Retail Theory and Zara: UK Market Strategies and Environmental Impact

This report examines Zara's retail strategies and market presence in the UK fashion industry, employing frameworks such as PESTLE, SWOT, and Porter's Five Forces to analyze the company's strengths, weaknesses, opportunities, and threats. It discusses the relevant changes within the UK fashion retail environment, including political, economic, social, technological, legal, and environmental factors, as well as micro-environmental factors affecting Zara's operations. The report also identifies the strategies and tactics used by Zara in the retail industry, such as competitive rivalry, threat of new entry, bargaining power of suppliers and customers, and offers recommendations for improvement. Zara's unique design approach, brand value, and responsive supply chain are highlighted as key strengths, while weaknesses such as limited advertising and low safety stock are also addressed. The report concludes by emphasizing the importance of innovation, online market presence, and competitive adaptation for Zara's continued success in the UK market.

RETAIL THEORY

Table of Contents
INTRODUCTION...........................................................................................................................1
Retail industry.............................................................................................................................1
Company.....................................................................................................................................1
MAIN BODY...................................................................................................................................2
Relevant changes within UK fashion retail.................................................................................2
Relevant changes with micro environmental..............................................................................3
Strategies and tactics which used in the retail industry...............................................................5
Recommendations.......................................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Retail industry
In the UK, there are several retail industry consider their operations and functions to
focus on the increasing economy of the country. They consider their operations and functions as
supermarket to attract maximum number of people (Arnold, Landry and Reynolds, 2015). For
example, Tesco, Sainsbury, Zara, Asda, etc. Apart from this, they are also focusing on the
fashion and market trend which continuously developed to attract several numbers of the
customers in the business. In this regard, mainly customers are attracted towards the latest trend
and creativity which exist in the market to produce systematic work. Furthermore, innovations
and uniqueness also implemented to develop creativity and attain desired results as well.
Therefore, significant advantages in the industry could be gain. This industry contribute major
part in the country economy to develop effective results in it. It helps to focus on the different
opportunities that assists to influence the latest trends of the market.
Company
Zara is a Spanish fast fashion retailer based enterprise in Arteixo, Spain, etc. Their stores
considered for men and women clothing. They are majorly supplied products and services as per
the consumer trends. Therefore, it assists to look towards the responsive supply chain. The
company regularly considered innovations with new products in their stores. As results, it will
assist to look towards the distribution centre in Spain. In addition to this, in the UK market, there
are different new items are stored, tagged and loaded into lorry. Hence, clothing delivered with
responsive supply chain ships. In every week, the chosen company considered their new
operations and functions with products. Hence, they design new product with finished goods in
the stores for existing items and development. It helps to increase competitive advantages to deal
with the functions and operations. Online shopping market also developed which assists to focus
on the consequent outcomes and results.
From 1963, the chosen business started their functions and operations to deal with some
effective results. It was started with small store which is known as Zorba and budget consider
merge around 30 Euros. After this, name has been changed with Zara so that effectiveness
developed with more stores. The company considered many new functions and operations so that
they are able to expand their operations and functions in US. Recently, the company also
1

developed their operations with more than 6500 stores in all over the 88 nations. Zara considered
bringing attractive and responsible to improves quality of customer services with priorities.
MAIN BODY
Relevant changes within UK fashion retail
In respect to deal with the international market, it is important to look towards the
relevant changes which need to maintain to cope up with market trends (Frank-Miller, Lambert
and Henly, 2015). In this aspect, Zara need to concentrate on the following elements that
considered in PESTLE analysis: Political factors: In the UK market, Zara considered several operations that assists to
look towards the textiles which readily develop subject of quotas. It is the best way to
make competitive and encouraged the all other businesses to looking towards the
reducing cost and attract broader customers as well. Furthermore, there are certain legal
removal import quotas which enable to generate effectiveness in create greater access in
the international market. Economic factors: Furthermore, economically considered consideration in economic
growth of the nation. Therefore, it helps to implement creative and innovative advantages
to deal with UK market in clothing and other products. Zara have adequate knowledge
regarding market and customers demand so that they can produce effective results in the
products and services as well. Further, they are familiar with the growth, interest rates,
tariffs, etc. As results, it assists to look towards the brand and important consideration as
well. Social factors: Social factors seems on fashion industry which spend on the habits of
potential customers who take part in economic stability. In the global recession, every
individual face issue of unemployment that enhance demand of products which is
necessary for affordable. In Zara case, it is important to look towards the spending pattern
of customers and changes in trends in fashion market. Therefore, it assists to should focus
on the production of clothes (Feng, Zhou and Hu, 2017). Population rates is higher than
the death so that the company need to produce structure accordingly. Technological factors: Technology elements in the chosen business environment
considered better work and efficiency to develop effectiveness. In this consideration,
2

technological changes in the chosen enterprise bring quality control and maintain its
strength for their products and services. Therefore, effectiveness also developed to work
in the different sector (Boyd, 2018). With the help of integrated latest and upgrade
technology, Zara able to consider global presence to increase their effectiveness.
Furthermore, it includes updating and social media forums which introduced in the
organisation to attain creative results at workplace. In order to look towards the advance
tools such as Facebook, Instagram, Twitter, etc. the company able to deliver creative
results in the business environment. As results, they can attain more profits and revenue
in business environment. Legal factors: Legal factors consider integral part in the organisation. Therefore, it assists
to make sure that Zara consider all legal obligations and regulations to maintain their
standard and develop effectiveness as well. In the current era, the company operating
well informed and chooses the products to accomplish desired results (Javadi,
Moghaddam and Marzband, 2016). In the society, it considers actions as the international
brand which develop with laws. Currently, each consumer need to informed very well
towards the products and services in the enterprise. Hence, for the society well being
activities need to implement so that successful results will be develop to look upon the
business development.
 Environmental factors: Consumers are also looking towards the effectiveness of the
environment to focus on the systematic work performance. In this way, Zara need to
focus on the environmental consideration to look on the objectives and goals so that they
can attain systematic work performance at workplace. In addition to this, they need to
adopt strategies and effectiveness through they can easily create effectiveness in the
business environment. Therefore, it will help to attain more significant advantages of the
government assurance in the business which commit to produce environment safety.
Relevant changes with micro environmental
3

Zara consider several operations and functions in different areas of the world. In this
aspect, the company develop their brand with 8 subsidiary in all over the market. Therefore, it is
driving on the more profits and revenue to develop more significant advantages (Javadi,
Moghaddam and Marzband, 2016). The company is known for the fresh design and keep their
consideration to consequently develop their systematic advantages with following SWOT
analysis:
Strength: Zara has main strength is that they deal in the unique design so that
effectiveness develop to implement innovations and development activities in the business
environment. Clothes and other products which provided by the business consist effective results
(Frank-Miller, Lambert and Henly, 2015). Furthermore, brand value of the enterprise also create
positive impact to deal with the innovative functions and operations in different areas of the
world. The company has developed brand values which consider healthy culture.
Weakness: However, Zara has not generalised and specialise in anything with everyone.
Furthermore, the company has not lacked of advertising so that it create negative impact on the
business results. They have low safety stock so that their strategy is not effective to develop
creative results at workplace (Boyd, 2018). Advertising considers important role to make
successful results in the business. In this consideration, organisation need to focus on the
advertisement such as social media, internet marketing, etc. It will helps to attain more
advantages to look upon the design.
Opportunities: Zara can consider their operations and functions with online market. This
is because, online marketing assists to develop availability and alternatives source towards the
customers. Therefore, the company can develop their effectiveness and implement e-commerce
in the market. Hence, there selling is continuous develop to focus on the relevant outcomes and
results in the business. With the help of the innovations and creativity, the company able to make
sure that effectiveness also developing in the business environment (Arnold, Landry and
Reynolds, 2015). With the help of the market potential, the company can develop their
effectiveness and capitalise in the growing market. Market expansion in the new places gives
profitability in the business.
Threats: Zara has main threat due to high competition and low advertisement. Therefore,
they need to implement innovative tools and activities with advertisement so that development
4

could be made easily (Bell, Gallino and Moreno, 2015). In addition to this, there are several
competitors also perform functions and operations in this sector such as Vero Moda, H&M, etc.
Strategies and tactics which used in the retail industry
In respect to implement Porter Five forces into Zara, there are several elements
considered in the strategy which create impact on the functions and operations. In this aspect,
according to the competition exist in market, the chosen business need to include their
consideration (Feng, Zhou and Hu, 2017). As results, it will assist to look towards the different
opportunities:
 Competitive rivalry (High) : In the UK market, there are many competitors exist of
Zara. Therefore, competitive rivalry very high. Furthermore, the company need to make
som extra efforts to attract customers in their consideration. In this aspect, they are unable
to develop their effectiveness to attain creativity and profitability as well. Therefore,
company need to focus on the gain high market share with attract several customers in it.
It is the best way to attain desire results with more customer attraction (Diddi and Niehm,
2015). Major competitor of Zara is H&S. The chosen company mostly provide their
products and services at low cost so that they are able to attract maximum customers
easily in the business environment. Therefore, it assists to look upon the some creative
advantages at workplace.
 Threat of new entry (Low) : In the market, there is low threat of new entry. This is
because, company require implement high investment amount to produce effective
functioning at workplace (Fei and Ximing, 2015). In this regard, it is difficult to other
businesses to compete with Zara. In addition to this, individuals need to wait to enter in
the new market with implement sufficient time. Therefore, they are able to prepare
themselves towards the face high competition existence in the market. Moreover, there
are several other businesses exist that are looking towards the economic benefits'
consideration which assists to look upon the creativity and performance development at
workplace. The chosen company has fast growth in the diversification style in the
business with considered horizontal and vertical consideration in the business. In the new
fashion statements, it will help to look upon the more growth and development that exist
in the business (Gümüş, Kaminsky and Mathur, 2016).
5

 Bargaining power of suppliers (Moderate) : Furthermore, today's time is globalisation
so that markets are continuously grown with the suppliers power. In this consideration,
there are several suppliers who provide raw material to Zara to develop their operations
and functions in the market. In addition to this, it can be stated that suppliers power
moderate because sometimes in respect to switch towards the other suppliers also create
more cost implementation. In new market, the chosen company has no knowledge
regarding suppliers so that they need to look upon the stable relationship with the
suppliers. It assists to maintain standards in the goods and quality as well (Javadi,
Moghaddam and Marzband, 2016).
 Bargaining power of customers (Moderate) : Zara spends more amount on budget on
advertisement that relies on words from the mouth to mouth. It assists to look upon the
research and development process of the business in systematic manner. Consumerism
fashion consist quite unpredictable from where buyers can easily purchase products and
services easily. Further, the company has loyal customers so that they can easily attain
systematic work performance in the business unit to attract many people at workplace.
Hence, it can be stated that bargaining power of customers is moderate (Hafezalkotob,
Mahmoudi and Wee, 2018).
 Threat of substitute (Low) : Other business of the UK market in fashion consideration
unable to compete with the Zara because in term of quality and affordability the company
not getting effective results. In order to look upon the creativity, it is essential to focus on
the relevant results that needed to perform several functions and operations. It creates
main advantages to the chosen company to compete with the different businesses in UK.
In order to look upon the responsive supply chain effective and successful results could
be gain in the enterprise (Laseter and Rabinovich, 2016).
Recommendations
In respect to increase creativeness, Zara requires effectiveness in their operations and
functions so that they are able to deliver qualitative products to customers. In addition to this,
following are certain recommendation could be provided to the company to focus on the
creative advantages: Focus on the advertisement: In order to provide recommendation to the Zara, it is
essential to look upon the advertisement that assists to meet with innovative functions
6

and operations. In this aspect, the company able to attract maximum customers with their
effective development program at workplace. With this regard, on social media,
newspapers, television, etc. the company should implement their advertisement.
Therefore, it will assists to implement effective features as well (Roggeveen and
Sethuraman, 2018). Adding more unique features: Furthermore, the chosen business also need to look upon
the adding unique features so that they are also able to attract new candidates in the
business environment. It is the best way to attain maximum candidates in the business
environment with development of the aims and objectives as well (Frontczak Loveland
and Daughtrey, 2015). It will help to concentrate on the some innovative elements in the
enterprise.
 Expand operations in new areas: Furthermore, Zara need to concentrate on the
expansion in new areas. It will assist to look upon the relevant results that assists to
develop more profits and revenue. In this way, the company can implement their
functions and operations with unique elements at workplace easily (Marzband, Javadi and
Moghaddam, 2016).
CONCLUSION
From the above report, it can be summarized that Zara considered their several operations
and functions to make effective results. In this aspect, report concluded about the PESTLE
analysis through it can be stated that company can enter in new areas with consider their
effective results and outcomes. With the help of the SWOT analysis it can be denotes that
advertisement is the major weakness of the company which need to be solve to increase effective
operations and functions in the business environment. Moreover, it articulated about the some
advantages that looking to develop profitability and effectiveness in the business. Porter five
forces strategy also applied that assists to denote that the company could able to consider their
new development activities at workplace. At last, these strategies helps to make sure that
business can enter in UK market with implement innovations and unique characteristics.
7

REFERENCES
Books and Journals
Arnold, T.J., Landry, T.D. and Reynolds, J.K., 2015. A Typology of Online Retail Assurance:
Implications for Managers and Ideas for Future Research. In Assessing the Different
Roles of Marketing Theory and Practice in the Jaws of Economic Uncertainty (pp. 230-
230). Springer, Cham.
Bell, D., Gallino, S. and Moreno, A., 2015. Showrooms and information provision in omni‐
channel retail. Production and Operations Management, 24(3), pp.360-362.
Boyd, R.L., 2018. Retail enterprise across American regions: the role of black population size in
the late nineteenth-century United States. GeoJournal, 83(2), pp.305-317.
Diddi, S. and Niehm, L.S., 2015. Exploring the role of personal values and moral norms towards
consumers' intentions to patronize apparel retail brands engaged in Corporate Social
Responsibility.
Fei, L. and Ximing, H., 2015. Theory of Retail Institutional Change: Review and Prospect.
Technology Economics, 11, p.005.
Feng, K., Zhou, H. and Hu, D., 2017, October. Retail market pricing design in smart distribution
networks considering wholesale market price uncertainty. In Industrial Electronics
Society, IECON 2017-43rd Annual Conference of the IEEE (pp. 5968-5973). IEEE.
Frank-Miller, E.G., Lambert, S.J. and Henly, J.R., 2015. Age, wage, and job placement: older
women’s experiences entering the retail sector. Journal of women & aging, 27(2),
pp.157-173.
Frontczak, N.T., Loveland, K.A. and Daughtrey, C.L., 2015. Designing Retail Shopping
Experiences: An Application of Experiential Learning Theory. In New Meanings for
Marketing in a New Millennium (pp. 41-48). Springer, Cham.
Gümüş, M., Kaminsky, P. and Mathur, S., 2016. The impact of product substitution and retail
capacity on the timing and depth of price promotions: theory and evidence.
International Journal of Production Research, 54(7), pp.2108-2135.
Hafezalkotob, A., Mahmoudi, R. and Wee, H.M., 2018. Wholesale-retail pricing strategies under
market risk and uncertain demand in supply chain using evolutionary game theory.
Kybernetes.
8

Javadi, M., Moghaddam, M. and Marzband, M., 2016. Bidding strategy of distributed energy
resources in the electricity retail market, based on game theory approach, considering
uncertainties.
Laseter, T.M. and Rabinovich, E., 2016. Internet retail operations: integrating theory and
practice for managers. CRC Press.
Marzband, M., Javadi, M. and Moghaddam, M.M., 2016. Non-cooperative game theory based
energy management systems for energy district in the retail market considering DER
uncertainties. IET Generation, Transmission & Distribution, 10(12), pp.2999-3009.
Roggeveen, A.L. and Sethuraman, R., 2018. Understanding the JR Heritage, Publishing in JR,
and the Evolving Retail Field.
9