Zara's Business Environment: Leadership, Factors & CSR

This report provides an analysis of Zara's leadership and business environment, focusing on internal and external factors that influence the company's operations. It includes a SWOT analysis, identifying Zara's strengths, weaknesses, opportunities, and threats, as well as a PESTLE analysis, examining the political, economic, social, technological, legal, and environmental factors affecting the business. The report also evaluates Zara's corporate social responsibility (CSR) initiatives and recommends the coaching leadership style from Daniel Goleman's framework to meet business objectives, emphasizing employee development and customer experience. The analysis considers how strengths can negate threats and how weaknesses may affect opportunities, offering a comprehensive overview of Zara's strategic positioning and operational challenges. Desklib provides access to similar solved assignments and reports for students.

Leadership and Business
Environment

Table of Contents
Introduction......................................................................................................................................3
Main Body.......................................................................................................................................3
Internal and external factors affecting Zara...........................................................................3
Analysis of internal and external factors affecting Zara........................................................6
Corporate social responsibility of Zara ................................................................................8
Reflection ...........................................................................................10
Conclusion.....................................................................................................................................10
References .....................................................................................................................................11

Introduction
An effective leadership is all about generating organisational environment in which it
engage with the workforce with strategy and vision to enhance the efficiency and growth for the
organisation. A leader plays a vital role in company operations. It succours into achieving the
organisational goals through its abilities and strategies. Moreover they empower the management
as well as accountable that gives outstanding results. By such above effective mentioned skills
gives an competitive advantage to an organisation through their strategic and productive
approaches. In this given report task operational working of Zara is being taken into
consideration (Allam, Scagnelli and Corazza, 2020).
Zara is the most influenced brand in apparel industry. It was founded by Amancio Ortega
in 1975. the mentioned company known for its fast adaption of new fashion trends that shows
their strategic efficiency. In this given report internal and external strategic analysis of mentioned
firm will be performed. Further, evaluation of factors that can influence the company operations
will highlighted. In addition to this a suitable leadership style that can succours the given
company operation along with their CSR process will be evaluated in this given report (Kim and
et. al., 2021).
Main Body
Internal and external factors affecting Zara
The above mentioned tool perform by the mangers of firm to analysis the internal and
external factors that can influence the operational working. Through such analysis company
enhance or modified their strategy to get the competitive advantages as well as efficient working
environment for its operations. The managers of Zara influence their operations through such
conductive tool (Fung and et. al., 2021).
Swot analysis
Strength Design Team- Zara mainly know for its
fast and fashionable products. The
given company has large number of
renowned designers that transforms
products according to customer desire.
Weakness
 Fast fashion- The fast adoption of
products that gives Zara an competitive
advantage were also arise the problem
of sustainable approach in its
operations. Zara major weakness is to

Company launches numbers of new
designed products every year that
reflects their core strength of customer
acquisitions through their designing
products.
 Physical evidence- The service of Zara
stores has a strong physical evidence
over their customers. Their systematic
product allocation as well as store
space provides the ease to customers to
walk freely into the store while
selecting the design (Collinson and et.
al., 2020).
balancing the sustainability with its fast
fashion approach that arises threat for
its operation.
 Reliance on stores- The mentioned
company sales mainly opted through
physical stores. Due to pandemic they
limit their number of stores that leads to
climb out the massive drop in sales.
Moreover even with their online sales
were not able to matched their targeted
goal (Lee and et. al., 2018).
Opportunity Market expansion- According to their
previous operations it is clearly stated
that Zara business got the potential
increment in its profits whenever they
emerge to new location. In instance the
mentioned company have the
opportunity to expand its appearance to
emerging locations where people can
spend over mid range price product.
 Rapid delivery cycle- Customers of
Zara mainly visit to its stores on an
average of 17 times in a year. It is
because of mentioned company fast
respond to the fashion trends. They
deliver the trend in 2 to 3 weeks in its
stores. However in future company
have the opportunity to reduce such
Threat
 Competition- Zara has the number of
competitors in the market like H&M,
mango and many more that offers
quality design products to its customer.
These competitors uses several strategy
such as pricing strategy to break and
hold the customers. So it can lead to be
a threat for Zara
 Reach- Zara operates its function
through its stores and website only. The
lack of shop in shop stores shows
company limited reach whereas other
competitors are getting the advantage
of such resources in their sales volume.

time.
PESTLE Analysis Political- The political factors play a major role for every company in perform their
function. Since UK has enforced the BREXIT law that impact several businesses deeply
. Such as several companies were closing their operations in UK. Zara which is Spanish
brand also faces some issues in relation to their operations. In relation to raw material as
well as other item that imported through other territories of EU. Because of such law
company faced the difficulty in trade of. Which leads to enforce them to redesign the
trade route (Sternad, 2019). Economic- Some of the economic factors impacting Zara operations in UK
1. Relative affordability- Zara offers luxurious designing clothes in a affordable price in
comparison to other high class brands in UK market. They offer the large variety of
products from medium to high range price. By their pricing strategy company has the
ability to thrive in such mentioned economy (Hameide, 2020).
2. high capita income- UK is a developed country in which per capita income is high in
comparison to other developing countries where Zara offers its services. The customers
has the ability to spend on designing products. One of the reason in success of Zara
operation in UK. Social- Zara is the most fashionable brand in the price range they cater the audiences.
The mentioned company deliver the high quality of products in market at affordable
price that shows their clever marketing strategies in attracting the audiences. Through
their impactful leadership quality company gained so much hype in its operations that
ultimately enhanced their profit ratio as well as established the strong brand image.
Hence, their positive brand image in market allows them to collect healthy margins from
its audiences (Brenot and et. al., 2019). Technical- Technology is one of the most important factor that influence business
operations. Zara is one of the brand that rely on technology to expand its customer base.
Company analysed the big data for better known of customer taste and preference.
Through such data they develop the product according to market demand. In light to the
fact big data have huge data sets that is need proper analysation. Hence the mentioned

company has money and audience to potentially adopt such technology. It can propel
their business to next extent (Anand, 2019). Legal- Zara mainly focuses into capturing the hot market trends of fashion and convert
them into affordable. Sue to such practice arises the issue of copyright. Because of
already availability of that design in market from other retailers. In the past Zara has
faced such issues of copying the product design without the consent which criticized
their operations. Hence, it is the major factor that could be affect their future operations.
 Environment- Zara majorly known for its fast fashionable products. The mentioned
company launches large variety of products in year that highlight the issue of
sustainability. In the past cases it is shown that Zara has faced the problem in balancing
the sustainability with their operations. Hence the issue sustainability issue is one the
major factor for Zara (Gomez-Conde and et. al., 2021).
Analysis of internal and external factors affecting Zara
From the analysis of above report it can be said that the factors discussed in PESTEL can
influenced the opportunity and threats of the mentioned company. Since it is stated that UK has
the high capita income in its economy that leads to arise the opportunity for Zara to expand its
operations even more effectively. Through such process company can get the competitive
advantage as well as enhance their productivity. In contrary the issue of copyright can arise the
problems of lawsuits which can influence the rapid delivery cycle form mentioned company in
future (Abraha and Hyder, 2021).
Strength to negate threats
Zara has strength of its designing products that evaluated in the above affairs. The
mentioned company has a strong and loyal customer base towards its product that other
competitors lack. Hence company can easily concur their competitors through its fast and
fashionable products approaches.
In above analysis it is shown that mentioned company only offers its product through its
store which can be an threat for them in term of customer reach. Since the company believe in
spacious and eye catchy stores which is also their strength. By their such strategy customers
attracts towards using their physical stores in comparison to use multi-stores channel at one
place. Hence though their strong physical store appearance can easily concur the reach threat.
Weakness affecting Zara opportunities

In the mentioned report it is stated that Zara faced issues in balancing the sustainability
approaches due to its fast fashion approach. Since new era of youth are more concerns for
environmental factors. Hence if company didn't adopt such sustainable approach for their future
projects can leads to convert their opportunity to expand the operations into threat.
Recommend a suitable leadership style from Daniel Goleman's (2000) leadership style that
according to you will help them meet their business objectives. Justify your choice using
appropriate literature and example.
Daniel Goleman has given six leadership style which is used in different situations arise
in an organisation. There are six leadership styles given under are as follows (Chamorro-
Premuzic, 2019):
 Coercive leadership style- This type of leadership is apply in an organisation when
management need quick and fast solution of a problem. There are certain problem is
which management need fast and precise solution such as firing of an employee who us
not working well. This kind of leadership always promote commanding approach.
 Authoritative leadership style- Under this kind of leadership manager of an
organisation set goals for team members and let them achieve in their own way
whichever they feel appropriate without any two way communication. This leadership
promotes creativity among employees in an organisation.
 Affiliative leadership style- In this type of leadership, management of an organisation
always promote employees as their first priority. They always try to create positive
working environment in an organisation. This leadership style need lot of empathy and
ability to build string communication through various style (Diddi and et. al., 2019)
 Democratic leadership style- By applying given leadership style in an organisation,
manager always promote two way communication with their employees in an
organisation. Generally manager under this leadership give their ideas to implement in an
organisation and expect their employees or team members to give opinion on it.
 Pacesetting leadership style- Manager of an organisation who use this leadership style
always lead their team from front. They always try to main good communication with
their team members by personally asking them regarding their progress towards work.

Purpose behind using this leadership is to create open communication with each member
of an organisation.
 Coaching leadership style- The main objective of this leadership style is not only
encourage employees to achieve sales target but also to improve them personally.
Therefore manager those who apply this leadership style always make open
communication to their employees which help team members to improve them both
professionally or personally.
On the basis of above leadership style of Daniel Goleman, management of ZARA
company should adopt coaching leadership style for the better and smooth functioning of an
organisation. By adopting of this leadership style manager of an organisation should not only
encourage employees to achieve their sales target but can also help to improve them personally.
Different aspects in which management can improve their employees personally such as
communication skill, presentation skills and many more. The main objective of mentioned
company is to attain attractive fashion for customer in market as well as also to improve their
consumer experience. Therefore by adopting coaching leadership style management can train
their team members for attaining their sales targets by selling best fashionable clothes to
customer and for increasing customer experience they can train their employees on soft skills
like how to greet customer, how to listen to their queries in peaceful manner. By this
management of an organisation would be able to increase their sales.
Corporate social responsibility of Zara
According to the article published in BBC (2019), Zara promises to adopt the sustainable
approaches in manufacturing their product. The mentioned company says that by the 2025
company will only sells the recycled, organic and sustainable products from its stores. The
mangers of mentioned company has the fast fashion approach in which they faced the issue of
sustainability. Hence through implementing of such sustainable approach in operations can solve
the problem of company The mentioned company reduced production waste by recycling of
hangers and tags in making of other plastic items. By these such initiative company stepping
towards the sustainable practice (Hu and et. al., 2021).

(Source: Fast fashion: Zara promises all its clothes will be sustainable by 2025)
Since the mentioned company has 64 stores in UK and offered worldwide service which
conclude the massive adoption of market. Company has started the recollecting of old clothes at
their stores so they can use it in making their new clothes. Through such approach company can
initiate in solving the issue of landfill that faced by UK every year. People in UK sends around
235 million of clothes to be landfill. Hence, by making such initiative in operations can succours
into eliminate the issue of land degrading.
Eliminate the use of plastic bags To protect the environment Zara initiated with complete
elimination of single use plastics in its store by 2023. The plastics is one of the major factor that
harming the environment and nature. Due to its non degrading nature it cant be degrade. As such
it disturbing the sea life and polluting the environment by its toxic emulsion . Therefore company
like Zara trying to minimize such affect by banning of single use plastic. The stores of given
company only using the paper bags instead of plastic that puts their positive approach in market.
Hence, through such Environment strategic approach can succours the company into attract
environment conscious audiences towards their products. The mentioned company sells the
product made with environment friendly materials. It is labelled with join life running in stores.
The labelled product made from organic cotton and recycled polyester which ensures their
sustainability. Hence, through such approaches towards saving the environment reshaping the
mentioned company towards sustainable practice (Anguelov, 2021).
Impact of fast fashion

By developing such approaches also arise several opportunity for Zara in regard to
company growth. Through converting their conventional high street stores into environment
friendly products can provides them competitive advantage in regarding to other companies who
are not following such practice. Company can grab the opportunity by early adoption of such
practices in their fully fledged process. In light to the fact audiences are now more concerning
about saving the nature. Hence, they are giving the priorities to those product that made from
environment friendly approaches. Therefore, Zara can converts these leads by attracting such
audiences towards its operational working.
Reflection
I feel so grateful that I get the opportunity to conducting this task. As the project given to
me i.e., leadership and business environment, I collected information through primary and
secondary resources as well as my academic knowledge were also helped me in performing such
report effectively. In the duration of conducting this report several issues has arises such as time
management, technical knowledge has faced. But because of my decision making skills I
somehow managed to complete this given project. I formed several stages in which I segmented
the project proportionately. Through such effective approach I successfully completed the
project. It enhanced my time management as well as gives the knowledge of various attributes of
leadership skills. I gained several knowledge from this project like importance of leadership and
its role in enhancing company operations. Moreover, this project helps me in enhance my
technical knowledge even better. Therefore, this project gives me the chance to handle the hectic
situation calmly as well as give me the strength to overcome any problems.
Conclusion
From the analysis of above report it can be said that leadership plays a major role in
enhancing the company operations through its strategies. In above report internal and external
factors of Zara were analysed that showed the overall scenario of given company. Further the
evaluation of such factors with others has influenced the given business. Several leadership
theories were also elaborated in above project that succours the given company in enhancing
their employee productivity as well as credibility. An effective leadership skills helps the
company by promoting their operations as well as improvise situation that affects business

environment. At last the mentioned company Corporate social responsibility were illustrated that
highlighted their current and future approaches towards helping the environment.

References
Books and Journals
Allam, I., Scagnelli, S. and Corazza, L., 2020. Sustainability Reporting, a New Type of
Companies’ Hypocrisy: Zara and Volkswagen Cases. In Responsible Business in a
Changing World (pp. 195-211). Springer, Cham.
Kim, E., Fiore, A.M., Payne, A. and Kim, H., 2021. Fashion trends: Analysis and forecasting.
Bloomsbury Publishing.
Fung, Y.N., Chan, H.L., Choi, T.M. and Liu, R., 2021. Sustainable product development
processes in fashion: Supply chains structures and classifications. International Journal
of Production Economics, 231, p.107911.
Collinson, S., Narula, R., Qamar, A. and Rugman, A.M., 2020. International business. Pearson
UK.
Sternad, D., 2019. Effective management: Developing yourself, others and organizations. Red
Globe Press.
Brenot, A., Chuffart, C., Coste-Manière, I., Deroche, M., Godat, E., Lemoine, L., Ramchandani,
M., Sette, E. and Tornaire, C., 2019. Water footprint in fashion and luxury industry.
In Water in Textiles and Fashion (pp. 95-113). Woodhead Publishing.
Gomez-Conde, J., Lopez-Valeiras, E., Rosa, F. and Lunkes, R., 2021. The Effect of Management
Control Systems in Managing the Unknown: Does the Market Appreciate the Breadth
of Vision?. Available at SSRN 3675688.
Chamorro-Premuzic, T., 2019. Why do so many incompetent men become leaders?:(And how to
fix it). Harvard Business Press.

Diddi, S., Yan, R.N., Bloodhart, B., Bajtelsmit, V. and McShane, K., 2019. Exploring young
adult consumers’ sustainable clothing consumption intention-behavior gap: A
Behavioral Reasoning Theory perspective. Sustainable Production and
Consumption, 18, pp.200-209.
(
Hu, T.S., Pan, S.C., Cheng, H.T., Chang, S.L. and Lin, H.P., 2021. Toward economic
sustainability: how to shape fashion industry development in Taipei. International
Journal of Business Environment, 12(1), pp.83-112.
Anguelov, N., 2021. The Sustainable Fashion Quest: Innovations in Business and Policy. CRC
Press.
Hameide, K.K., 2020. Managing Fashion: A Management Perspective. Routledge.
Lee, S.H.N., Zhou, Y., Lo, C.K. and Ha-Brookshire, J., 2018. Luxury fashion brands versus
mass fashion brands: Data mining analysis of social media responses toward corporate
sustainability. In Sustainability in luxury fashion business (pp. 51-73). Springer,
Singapore.
Anand, C., 2019. The Greenhouse Approach: Cultivating Intrapreneurship in Companies and
Organizations. Dundurn.
Abraha, D. and Hyder, A.S., 2021. Strategies in Emerging Markets. In Transformation of
Strategic Alliances in Emerging Markets, Volume I. Emerald Publishing Limited.
Online
Bringing attractive and responsible fashion, as well as improve the customer's experience, are
Zara's priorities, 2021. [Online]. Available at:
<https://www.inditex.com/about-us/our-brands/zara>

Fast fashion: Zara promises all its clothes will be sustainable by 2025. [Online] Available at:
<https://www.bbc.com/news/newsbeat-49022453>