Zara's Business Environment: A Case Study of Leadership and Strategy

This case study provides a comprehensive analysis of Zara's business environment, leadership strategies, and corporate social responsibility initiatives. It includes a PESTEL and SWOT analysis to evaluate the external and internal factors influencing Zara's operations. The report discusses how PESTLE factors impact business threats and opportunities, and recommends a democratic leadership style based on Daniel Goleman's framework to align with Zara's consumer-focused approach. Furthermore, the case study examines Zara's commitment to sustainable development and eco-efficient practices, highlighting the company's efforts in waste reduction and energy conservation. This document, available on Desklib, offers students valuable insights into Zara's strategic management and its approach to maintaining a competitive edge in the global fashion industry, with Desklib providing additional resources like past papers and solved assignments.

Leadership and Business
Environment Case Study

Table of Contents
Introduction .....................................................................................................................................3
MAIN BODY...................................................................................................................................3
TASK 1............................................................................................................................................3
Perform PESTEL and SWOT analysis for particular business PESTEL analysis of ZARA 3
SWOT Analysis...............................................................................................................................4
TASK 2............................................................................................................................................5
PESTLE factors has influenced the threats and opportunities business.................................5
TASK 3 ...........................................................................................................................................6
Recommendation about suitable leadership style from Daniel Goleman's leadership styles6
TASK 4............................................................................................................................................8
Part 2 ...............................................................................................................................................9
CONCLUSION .............................................................................................................................11
REFERENCES..............................................................................................................................12

Introduction
Business environment associated to the aggregation of different external and internal
factors such as customers needs and expectations, employer, management, suppliers, clients,
human action by government and economic changes (Bajpai, A., 2018). In the present report,
ZARA is taken into consideration. ZARA is a Spanish apparel which is based in Aeteixo,
Galicia, Spain. Company is basically specialised in fashion and products which includes
accessories, clothing, swimwear, beauty and perfumes. The present report will cover discussion
about SWOT and PESTLE analysis of ZARA and also about the alteration in PESTEL cause
that has influenced the danger and chance of business. In addition to this, the report will cover
analysis about leadership style which will help in terms of meeting the business objectives.
Moreover the report will cover discussion about corporate social responsibilities in the processes
and also about reflection on the knowledge that an individual has gained from the research.
MAIN BODY
TASK 1
Perform PESTEL and SWOT analysis for particular business PESTEL analysis of ZARA
Political Factors: Zara is a brand name which operates from Spain country and it falls
nether the ambit of Inhabitant Union. It savour the public presentation of free trade accept and
tax-concessions which have get along the hallmark of EU business concern prospect. If the brand
has to expand themselves then they have to keep into account about the political scenario of the
region.
Economic Factors: As ZARA is a Spanish trade name then they can utilise low-cost
working class which is easy available in Spain. It allows them to keep profitableness and also
provide its hard-core with fashion brand(Dzwigol and et.al., 2020). As it is a top fashion
description which is voguish and low-cost as well then they remain to be relevant in the times of
global economic turmoil and worldwide economic slowdowns.

Social Factors: ZARA has the quality to effectively research about the societal and
cultural nuances of its target marketplace. It allows the company to provide fashion which is
readily acceptable by its target demographic and also about the prices that they can afford.
Innovative marketing tropes of ZARA gives their customers a feeling of exclusiveness that they
can't afford to miss.
Technological Factors: Zara has both online stores and brick and mortar that makes it
easy for them to collect and also collect large amount of customer data and information(Kumar
and et.al.,2019). The use of artificial intelligence is also helpful in terms of streamlining the
manufacturing, delivery and logistics processes that improves operations across entire supply
chain.
Legal Factors: ZARA has to support in mind about the legal complexity of its operations
and inevitably to ensure that conformity rules are efficaciously travel. To ensure its prosperity,
labour laws, indefinite quantity chain running and hallmark are some of the definite issues that
the brand must with success journey.
Environmental Factors: ZARA has made their stores more physical phenomenon
efficient and industry process also efficient to reduce waste. This is the commercial enterprise
which is reasoned as one of the biggest advance of wasteful article of clothing acquisition. If
they want to remain applicable then they have to keep an eco- friendly concern practice.
SWOT Analysis
STRENGTHS: ZARA has many than 2000 stores in all over the planetary and one of the
galactic Spanish retailer in the planetary (Lei and et.al .,2021). It has well established brand
name on the universe wide basis and provision chain governance is exceedingly at low cost as
most of their processes are united in vertical manner.
WEAKNESSES: The brand has limited advertising and marketing as compared to other
brands and it has lots of competitors that means it has limited market share and high brand
switching. It also perceived as an expensive brand and it is not very active in online space
although it is available through online channels with partners.
OPPORTUNITIES: ZARA has lots of global markets where they can explore
themselves and can also enter in those segments where they haven't expand themselves. It has
been observed that e commerce and online marketing is gaining importance that can be tapped
by the ZARA brand name.

THREATS: ZARA has major threat in terms of high end fashion merchandisers and also
have economic downturn which can be considered as threat for their target segment. Consumer
switching is also considered as large extent of threat for ZARA brand(Li,., 2019). The sale of
ZARA brand products also face decline due to its fake imitations and business have to face large
amount of loss up to a large extent.
TASK 2
PESTLE factors has influenced the threats and opportunities business
The changes in factors of PESTLE analysis has influenced threats and opportunities
business to a very large extent. Due to its free trade agreements, ZARA can easily trade with
European countries which act as opportunity for the brand to explore themselves into new
markets. When brand has operate themselves from base country then they can easily avail labour
at low cost due to which they have not put extra cost on this parameter(Macke and Genari.,
2019). Due to its strong research about the market needs and requirements they can easily
modify themselves due to which they can attract customers on large scale which will act as
opportunity for the brand. When ZARA has focused towards artificial intelligence then it is easy
for the brand to give tough competition to their competitors that will act as opportunity to grow
themselves into positive manner.
The brand has to follow proper legal procedures and laws into the new market and if
ZARA can't meet out these requirements then it will act as threat for the brand in this new
international market. As this industry produces lots of waste products so it is harmful for the
environment so for remaining into sustainable manner they have to use ethical and recyclable
products so that they can indirectly support the environment as well. Otherwise ZARA act as
threat for the brand from perspective of future growth rate.

As ZARA has its strong point in terms of having large number of stores and also a
biggest retailer with low cost supply chain management. When they have lots of stores on world
wide basis then its easier to give tough competition to other brands as well. As it has famous
brand name then it is easier to convince the customers for their products(Nekhili and et.al.,
2018). Due to its low cost supply chain management they can use this cost as investment purpose
in terms of bringing out new kinds of products into the market. So in this way, it is easier to
retain customers for longer period of time. It has also been observed that as it has famous brand
name but it also offers expensive products as well due to which it can't be affordable by every
kind of customers as well. As it has large number of stores on the world wide basis but still it has
not large availability on their online stores.
Although they are using artificial intelligence technologies but they are not smart enough
in terms of handling and retaining customers for longer period of time. The famous brand has to
work on their pricing strategies so that consumers do not get easily switch for another option into
this international market. Due to these parameters opportunities of ZARA also get affected due
to which they can't focus on exploring the new markets and also can't make proper strategies for
their online business into positive manner. In this way, ZARA has addressed their strengths to
negate weaknesses and strengths that affect the opportunities.
TASK 3
Recommendation about suitable leadership style from Daniel Goleman's leadership styles
Democratic leadership style has been adopted by ZARA brand from Daniel Goleman's
leadership styles that will be helpful in terms of achieving business objectives. Under
democratic leadership, every team member has their own voice which is genuinely valued by the
management(Nicholson and Kurucz., 2019). The organisations who follows this kind of
leadership generally have more collaborative and flexible nature as well. With respect to ZARA,
it has unique leading and management kind where predilection is for face-to-face and close
action and also has down to earth, humble leadership style. The brand is more focused towards
its consumers where brand is always focused towards what their consumers want and then it
translates it to their products offerings.

Company is heavily relied on their store managers in order to identify the demands of
customers so that they are able to translate it to manufacturing. Under this type of leadership
style where they back up their worker to go on the far side what is expectable from them and also
promote entrepreneurial culture (Patrick., 2018). This leaders style is appurtenant in terms of
open human action, self-imposed high standardized that leads towards a clear-cut direction and
guidance for their worker and the organisation as a whole (Leadership and management). This
kind of leadership style also correlates with the strategies that the company uses within the
business model that creates synergy within the organisation. That's why it has been
recommended that Democratic style of leadership is appropriate for the well known brand name
i.e. ZARA.
Democratic style of leadership is appropriate for ZARA organisation because as they are
more focused towards their consumers and always try to identify about customers choices and
preferences. Their objective is to create sustainable development of society so they have to work
accordingly that's why they provide open communication culture in their organisation so that
they can achieve their targets without having conflicts among employees. This kind of leadership
also motivates their employees and provides encouragement as well so that employees deliver
their full potential towards the organisation(Raffo and Clark., 2018). This kind of free culture
within the organisation enables employees to work in a flexible manner so that they can deliver
tasks within a specific time frame. Under this kind of leadership, point of views of every
employee is taken into consideration in an appropriate manner so that new ideas can be created
in order to deliver best and innovative products to their customers.
Under this kind of leadership style, the powers has been distributed into their
subordinates so that it will be helpful in terms of taking their final decision. Democratic style of
leaders also creates indulgent conditions for the secondary to take initiatory, participate in
provision and utilise the plan and also appoint a constructive mental atmosphere in the governing
body process. This kind of environment supports in terms of further growth and development of
an organisation and is also helpful in terms of achieving overall objectives. That's why
democratic style of leadership is appropriate for profitable growth of famous brand named as
ZARA.

TASK 4
Corporate social responsibilities in the process with support of evidence in critical manner
Corporate social social control is a kind of self-self-activating business model which
helps a company in being societal accountable to itself, its neutral and the public. Zara wants to
help the sustainable development of the society and the environment with which they interact.
Zara also saves energy and lot of care has been given in order to make the stores efficient. The
brand is also developing peculiar eco efficient governing body models for their shop (Our
commitments). This management model plan measures to be practical to all processes from the
design of store itself, the lighting warming or cooling system instrumentality to the possible
recycling of ornament and piece of furniture. The brand also cut down the production of waste
and encourages for usage as well. Company has managed its waste through recycling of hangers
and security tags that are collected in the stores and also processed to be transformed into other
plastic items.
ZARA has also organised human action campaigns and also peculiar multimedia system
training plans to rise employees consciousness of the demand for property practices such as
trimming energy intake, modified activity habits and property transport as well. The brand has
used paper and biodegradable bags for their customers and it has been observed that 90% of the
bags gives out to customers are made up of paper(Solomon., 2020). All the plastic bags that they
use are biodegradable that is they decompose with support of natural biological process that
prevents the environmental pollution caused by traditional plastic. Zara supports for ecological
agriculture and also uses organic cotton in the production of particular items of clothing. In terms
of producing footwear, there are no petroleum derivatives and non-biodegradable materials are
used. Company has made some environmental policies in case of transportation where they have
introduced biodiesel fuel. It measures enable us to reduce emission of CO2 into the atmosphere
by more than 500 tones.
As this industry produces lots of waste products so they have to plan in an accurate
manner so that they can manage their waste in a well planned way. They have tried to go in
terms of sustainable manner but they can't implement it into successful manner. As they are more
concern about the environment but still they have sold some animal merchandise such as pelt and
animal skin sold at Zara that comes entirely from carnal rearward in stock form. In order to
become eco efficient, they have tried to use different strategies due to which it affect the working

procedure of an organisation and also indirectly it kills the precious time for growth of an
organisation.
Part 2
Reflection report
The report is all about business environment and leadership style as well. While writing
this report, I have gained knowledge about analysis of certain factors into positive manner. I
have also learnt that how strengths of an organisation is helpful in terms of growth of an
organisation. I have gained knowledge about an organisation weaknesses and how it can be
overcome with support of opportunity parameter of the particular organisation. Threats of an
organisation gives me understanding about loopholes of an organisation and also gives me
knowledge about how these loopholes can be rectified into positive framework. I have also
observed that changes in certain factors has influenced threats and opportunities of an
organisation. I have gained knowledge in terms of how PESTLE and SWOT analysis is helpful
in terms of changing the decision criteria and planning of an organisation into its positive
framework.
I have learnt that applying democratic style of leadership under Daniel Goleman's
leadership also gives me understanding that how an organisation can grow with this particular
kind of leadership. I have gained knowledge about this kind of leadership that how an
organisation can grow with free communication and supportive nature of an organisation. Under
this kind of leadership, I have also observed that point of views of every team member has got
equal importance due to which employees feel themselves valued at organisational level.
Within this kind of leadership, a leader gives motivation to their employees in order to
achieve objectives into positive manner. I have learnt that when this leadership style has been
implemented on the organisational level then they can achieve their targets within a time frame
without having any conflicts at organisational level. I have also gained knowledge about
corporate social responsibilities of an organisation so that they can create their positive image at
society level. I have observed while writing this report that the organisation is more focused
towards sustainable development of the society and its contribution towards environment. I have
gained knowledge that there are certain campaigns and sustainable activities have been organised
by the organisation so that company can fulfil their social responsibilities towards the society. I
have also gained knowledge about how paper bags and recyclable products can be helpful in

terms of saving the environment into ethical manner. I have also observed that the organisation
has introduced biodiesel fuel in order to reduce carbon emission in the environment within the
transportation sector of the company.
I have also gained knowledge about biodegradable products and recyclable materials
which will be helpful for sustainable growth of an organisation. In the overall manner, I have
learnt that business environment is very important for further growth of an organisation and
leadership style of an organisation also direct the further planning of an organisation into
effective manner. Leadership is important because on the basis of that all the team members
work into collaborative manner and gives the result into desired format. That's why its important
to have proper knowledge about kind of leadership and business environment importance as well
so that appropriate decisions can be taken for futuristic development of an organisation.

CONCLUSION
The above stated report concludes that business environment and leadership plays a very
important role in terms of further decision making of an organisation. It has been concluded that
SWOT and PESTLE analysis is necessary for the growth and proper decision making of an
organisation. It has been determined that changes in the factors of this analysis brings new
changes in terms of different results given by the company. Within an organisation, a particular
leadership style is required to be implemented so that team can work into collaborative manner
with a result-oriented time framework. Within an organisation it is necessary to follow corporate
social responsibilities into ethical manner so that objectives can be achieved within a time
framework

REFERENCES
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