Zara: Impact of Environmental Factors on Modern Business Practices

This essay provides a comprehensive analysis of Zara, a Spanish fast-fashion retailer, examining the impact of micro and macro environmental factors on its business operations within the global context. The essay identifies and discusses key micro-environmental factors such as employees, customers, suppliers, and competitors, highlighting their influence on Zara's business strategies. It also explores macro-environmental factors, including political, social, economic, technological, environmental, and legal aspects, and how these factors shape the nature of modern business. Furthermore, the essay emphasizes the importance of responsible, sustainable, and ethical management practices in relation to cultural, social, economic, and environmental issues. The analysis includes references to academic sources and demonstrates how Zara adapts its business practices to meet the changing needs and demands of consumers while operating ethically and sustainably in the global market. The essay concludes by reiterating the significance of these environmental factors and management practices for international businesses.

Essay

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1.Identify and discuss micro and macro environmental factors that changed nature of modern
business in the global environment.............................................................................................1
2.Discuss the reason why it is important that individuals and organisations to manage
responsibly, sustainably and behave ethically............................................................................3
CONCLUSION................................................................................................................................3
RFERENCES...................................................................................................................................4

INTRODUCTION
A business is an organisation where people work together. It can be an organisation and
economic system where goods and services are exchanged fro one person to another or fro earn
money (García-Álvarez, 2015). This assignment based on Zara, it is a Spanish fast fashion
retailer which is founded in 1975 by Amnancio Ortega and Rosalia Mera. This report will
discussed about micro and macro environment that changed nature of modern business in the
global environment. Further will be defined about the reasons why it is important to manage
individuals and organisations responsibly, sustainably and behave ethically in relation to social,
cultural, economic and environmental issues.
MAIN BODY
1.Identify and discuss micro and macro environmental factors that changed nature of modern
business in the global environment
Micro environment refers to that environment under which an organisation operate its
business. In Zara, it refers to that environment which is in direct contact with the business
organisation and can affect the routine activities of the company. All those factors such as
competitors, customers, employees, shareholders etc. that affect the business strategy of a firm
are known as micro environment factors. Employees or labour is one of the most important and
essential factor of production for a company that help the firm to run its business. Inn Zara, they
are the important factor or resource for the business of the organisation. Skilled employees can
help an organisation to achieve its organisational goals and objectives. Zara operate its business
globally and experienced employees has expertise to support the company to get success. At
present or modern time, it is important for the company to have skilled and experience
employees to fulfil the needs and demands of the consumers when the organisation operate its
business in global environment.
Customers are the central part of any business because they help in increasing sales or
generating revenue. Cause of use of technologies there are various changes occurs in the needs
and demands of customers. In Zara, the firm operate its business worldwide and produces
products according to the needs, culture, values and beliefs of different consumers (Gockeln,
2014). This micro environment factor affect the nature of modern business because the
organisation produces various products according to consumers needs. For example, Pakistan
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people prefer that kind of clothes which cover whole body so Zara manufacture that kind of
clothing products to them. Suppliers are those persons who provide goods and raw materials to
the organisations for production. In Zara, they also affect the business strategy because when
they make change in the price of raw material, the organisation also make change in the pricing
policies of the products which influence the business of the company at global level (Tao, 2014).
Competitors are those who sell same and similar goods and services as another organisation. In
Zara, there are various competitor of this firm such as Lewis, Gucci, Prada and various others
and directly impact on business strategies. It is one of the important micro environment factor
that affect and changed nature of modern business in the global environment. By using various
new technologies they develop new product which attract more customers and create competition
for the firm. Now these days, there are various new technologies are generating and competitive
firms use them to provide satisfaction to the needs and wants of the consumers that affect the
desires of international consumers.
Macro environment is the condition that exists in the economy as a whole rather than a
particular sector or region. The external and uncontrollable factors that influences an
organisation decision making and affect its performance an d strategies are known as macro
environmental factors. In Zara, these factors can be political, social, economical, technological,
environmental and legal. Political and legal factor refers to the political situation of the country
and government t or legislations. There are number of laws and acts are developed by the
government and it is necessary for the the company to follow them when it operate its bushiness
internationally. This changed the nature of modern business. For example, Zara operate its
business in Japan so it follow all the rules and legislations that are formed by the government of
that country to a company who run its business at global level. But change in taxation policy,
interest rate, monetary and fiscal policy etc. affect the nature of modern business because the
management of the company make change in its polices according the change. Technical factor,
it is another important factor that change the nature the nature of modern business. At present
time, Zara use different technologies to fulfil the needs and demands of the customers because
the taste and preferences of them are changing according to the trend (Thompson and McLarney,
2017). To promote its products and services, the company use internet, social media and various
other technologies. To get consumers feedback they can use website or any application.
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2.Discuss the reason why it is important that individuals and organisations to manage
responsibly, sustainably and behave ethically
It is important that individuals and organisations to manage responsibly, sustainably and
behave ethically in relation to social, cultural and environmental because a company established
in a company so it is necessary for it that it focus on its nearly environment where it exist. In
Context of cultural, in Zara, the company produce products and services according to the culture
and values of the countries or the consumers of it. Because each nation has its own values and
beliefs or this firm operate its business internationally so bit is important to provide products
according to it so that it can operate its business ethically (Wilhelm and et. al., 2016). In Social
perspective, the company follow all the environment laws so that it can not be harm the society
by its business because it exist in society. With the help of CSR activities, it provide various kind
of benefits and help to the society such as through educational programs and others. By using
recycling process and reuse of wastage, the company manage the inventory and responsible for
the society and solving environment issues. With this, it help in the economic growth of the
company as well as country. During the production, it follow all environmental laws such as
pollution act, carbon emission etc. or reduce the negative impact of production when the
company produces products.
CONCLUSION
From the above information, it can be concluded that micro and macro environment are
important factors that changed the nature of modern business when a company operate its
business in a global environment. At present time, if a company operate, its business
internationally, it should focus on the culture and values of the nation so that it can provide
products according to the customers needs and demands. By using various technology,
individuals and organisations to manage sustainably, responsibly and behave ethically in relation
to cultural, social, economic and environmental issues.
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RFERENCES
Books & Journals
García-Álvarez, M. T., 2015. Analysis of the effects of ICTs in knowledge management and
innovation: The case of Zara Group. Computers in Human Behavior. 51. pp.994-1002.
Gockeln, L., 2014.Fashion industry analysis from the perspective of business model
dynamics(Bachelor's thesis, University of Twente).
Tao, Y., 2014. How a small fashion brand survives in the Chinese market?: business
development plan for Minna Parikka Shoes Ltd.
Thompson, J. and McLarney, C., 2017. What effects will the strategy changes undertaken by
next Plc have on themselves and their competition in the UK Clothing Retail Market?.
Journal of Commerce and Management Thought. 8(2). p.234.
Wilhelm, M. and et. al., 2016. Implementing sustainability in multi-tier supply chains: Strategies
and contingencies in managing sub-suppliers. International Journal of Production
Economics. 182. pp.196-212.
Williams, W., 2015. Investigation into the critical success factors for the implementation of a
quick response supply chain strategy in the South African fashion apparel sector.
Master’s in Business Administration (MBA), South Africa, University of Stellenbosch,
pp.1-97.
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