A Detailed Analysis of Internal and External Factors Impacting Zara

This report provides an analysis of the internal and external factors affecting Zara, a major global apparel retailer. The external environment is examined using a PESTLE analysis, considering political factors like European trade agreements, economic factors such as labor costs and product affordability, and social factors like online shopping trends. The internal analysis identifies Zara's strengths, including its unique designs, and weaknesses, such as its lack of product specialization. Opportunities for Zara include developing flagship designs, while threats include low advertising and potential stock issues due to rapid design turnover. The report further discusses how Zara manages the impact of these factors, such as leveraging European trade agreements and maintaining affordable pricing. The analysis also highlights the importance of original designs to avoid legal issues.

Introduction
Zara is a Spanish retail store that deals in apparels.
The organization deals in various products like
clothing, footwear, accessories, beauty, perfumes
and swimwear. Zara is considered as the world's
largest retailer. The study revolves around the
internal and external factors of Zara.
INTERNAL AND EXTERNAL FACTORS OF
ZARA
External Environment
The external analysis of Zara is done with the help
of PESTLE analysis wherein the Political,
economic, social, technological, environmental and
legal factors are being considered. The Pestle
analysis of Zara is discussed below-
Political factors- As Zara is a Spanish brand, The
European trade agreement is a political factor that
affects the business of Zara.
Economic factors- The economic factors that
affect the organization are cost of labor and
affordability of its products.
Social factors- The social factors that affect the
organization are the online shopping trends as well
as deals of the brands.
How the company impact its context
External Environment
The ways in which Zara will manage these impacts
are discussed below-
Political- The political factor of European trade
union is a boon for the organization and under this
contract the organization imports the raw material
easily whereas it has easy access to exports too.
Economical- In order to have a positive impact
Zara needs to continue keeping the cost of the
products low so that it can have higher profits
while providing affordable price to the customers.
Legal- In order to avoid legal issues like copyright
issues the organization needs to focus upon
original designs of the organization only.
Internal Factors
Strengths-
Unique designs- Zara offers apparels with
elegant designs and better finishing that
matches the taste of the customers.
Weaknesses-
General products- Zara does not specializes
in a product, it rather has everything for
everyone and this could lead to a customer
shift.
Opportunities-
Flagship designs- Most of the brands have
flag ship designs and thus Zara can opt for
this strategy in order to have a better brand
identity.
Threats-
Low advertising- the organization has not
advertised its products and as the
organization keeps rotating its designs it can
become difficult to serve every customer as
they do not have stocks thus it is a threat to
the organization (Pulka, Ramli and
Mohamad, 2021).
References
Elfahmi, S., Chandrarin, G. and Manan, A., 2021. The
influence of external environment, internal environment,
and motivation on competitiveness through the product
innovation of Lasem Batik Tulis