Zara's Business Environment Analysis: PESTLE, SWOT, and Decisions

This presentation provides an in-depth analysis of Zara's business environment. It begins with an introduction outlining the use of PESTLE analysis to assess the impact of macro-environmental factors on Zara's operations, including political, economic, social, technological, legal, and environmental influences. The presentation then employs SWOT analysis to evaluate Zara's internal strengths and weaknesses, as well as external opportunities and threats. It explores the interrelationship between these micro and macro factors, demonstrating how economic factors like inflation and purchasing power, as well as political factors such as free trade agreements, impact Zara's decision-making processes. The analysis highlights Zara's strategic use of online channels, augmented reality, and sustainable practices. The conclusion summarizes the key findings, emphasizing the interplay between macro and micro factors in shaping Zara's business strategies and performance, and references are provided to support the analysis.

BUSINESS AND BUSINESS
ENVIRONMENT

TABLE OF CONTENTS
 Introduction
 Main Body
 Conclusion
 References

INTRODUCTION
 The presentation will outline the impact of macro environment factors on the
business of company with the help of PESTLE analysis.
 The presentation will also explain strengths and weaknesses of the firm with the help
of SWOT analysis and its interrelationship with macro environment factors.

Positive and negative Impact of macro environment.
PESTLE Analysis -
 It is a tool that helps the firms to analyse and evaluate the impact of macro
environment factors that can affect the ability of decision-making and
performance of the company.
 It helps the firm to use its strengths to manage the changes that are happening in
external environment. Manager of Zara will use this model to evaluate the impact
of macro factors on the business.
Political-
Free Trade Agreement in UK helps a lot in free movement of goods of Zara due to
which it has resulted in improvement in sales of the firm. European Union accounts
for 74% of the total exports of the company for clothing items.
Other factors that can Impact the operations of Zara are rate of tax on goods, stability
in political environment etc.
Economical-

CONTINUE
Social-
 The awareness of customers regarding online shopping has been
increasing. Due to which Zara has launch various online shops that
results in increase in sales of the firm.
 Zara offers products according to the culture of the buyers that helps
to satisfy the needs of customers.
Technological-
 Due to technological changes, Zara has implemented Augmented
Reality in the business that helps the customers to buy the products.
 To target young people, Zara has implemented sensors in the
packaging that helps buyers to choose Apparels from a wide range of
options.

CONTINUE
Legal-
 There are various legal laws that companies should follow such as Zara
should follow law related with copyrights, patents etc. So that, local
companies will not be able to sell similar products at low prices.
Environmental-
 Zara is investing funds for achieving the targets it has set for sustainable
development of products.
 Firm is using renewable sources of energy for developing products to
control pollution etc.

Detail analysis of macro environment.
Macro Environment –
 Macro environment is one of the major component of business
environment. It consists of all those factors tat can impact the operations
of the business indirectly and company cannot fully control these
factors.
 Macro environment factors exists in the environment which is outside
the firm. Macro factors involves factors such as social, political,
economical etc. these factors can directly or indirectly impact the
operations of the firm.

Analysis of strengths and weaknesses .
SWOT analysis-
 It is a tool that helps the organization to evaluate strengths and
weaknesses that are existing in internal environment of the organization
and opportunistic and threats that are existing in external environment.
 It helps the firm to grab the external opportunities by using the strengths.
Management of Zara will conduct SWOT analysis to determine various
factors that are -
 Strengths-
 Company invests huge funds in offering its products through online
channels that helps Zara to offer different clothing items in very short
period. Due to this, sales of parent company of Zara has increased by
41% in year 2018.

How strengths and weaknesses are interrelated with macro
factors.
 Micro environment that involves strengths and weaknesses of firm is
directly related with the macro environment factors. Management of
Zara will conduct SWOT analysis to identify micro factors and PESTLE
analysis to identify macro factors.
 Economic factors includes factors such as rate of tax, purchasing power
of buyers. If, rate of inflation in country is low the purchasing power of
buyers will increase and it will act as a strength because, company can
easily improve its profitability.

Influence of internal and external environment on
decision-making.
 Zara should use SWOT model for determining the impact of strengths,
weaknesses, opportunities and threats on decision-making of the
company.
 Political factors that involves factor like Free Trade Agreement will
influence decision-making of Zara and it will help to increase the sale of
the company in other countries.
 Social factor like change in demand of buyer will impact decisions of
Zara regarding development of products for the customers.

Impact of micro and macro factors.
 Macro as well as Micro factors both plays an important role in decision-
making of the company and it also affects the ability of firm to achieve its
objectives. Strengths of company will help to remove the weaknesses that
may act as a barrier to te success of the firm. Analysis of Macro
environment factors will help Zara to develop new products.

CONCLUSION
 The presentation has described the strengths and weakness of Zara with
the help of SWOT analysis, macro factors affecting the decision-making
of the firm with the help of PESTLE analysis.
 The presentation has also described interrelationship between strengths
and weaknesses of Tesco with economical, political, technological factors
etc.