Zara's Macro Environmental Influence: A Comprehensive Company Report

This report provides a comprehensive analysis of Zara, a Spanish apparel retailing company operating in the fashion industry. It begins by categorizing different types of organizations, including public, private, and voluntary sectors, using examples like NHS, Zara, and Oxfam. The report then explores the relationships between various functional areas within Zara, such as marketing, HR, and finance, highlighting their advantages and disadvantages. The core of the report focuses on a PESTEL analysis of Zara, examining the impact of political, economic, social, technological, environmental, and legal factors on the company's operations. Additionally, a SWOT analysis is conducted to identify Zara's internal strengths and weaknesses. The report also discusses the interrelation between these strengths and weaknesses with the external environmental factors, providing a holistic view of Zara's business environment.

Macro Environmental
Influence

Contents
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
Various kinds of company...........................................................................................................1
Relationships among various functional areas in addition with its benefits and drawbacks.......3
PART 2............................................................................................................................................4
Internal a well as external analysis to strengths and weaknesses of in context of organisations 4
Interrelation of strengths and weaknesses with external environmental factors.........................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business environment is considered as an aid of overall intrinsic as well as extrinsic factor
that influence organisation in better way. This kind of component imposes direct impact on
potentiality of organisation to handle appropriate relation with its user. For this purpose, the
Chosen organisation is named as Zara that is considered as the Spanish apparel retailing
company and deal in fashion industry. They offer different types of goods such as clothes,
footwear, beauty goods as well as accessories and many more. The document will provide data
information regarding various types of organisation, relationship with various functional area and
also its strength and drawbacks. Moreover, they also provide explanation regarding PESTEL and
SWOT and also discuss interrelation of strength as well as weakness with different external or
internal environmental factors.
PART 1
Various kinds of company
There are three types of organisation that is going to be mentioned below:
Public sector it is considered as organisations which focuses on management process and assess
needs that help government in achieving their goals. The example can be taken named as NHS it
was founded in the year of 1948 in Wales, England. They provide healthcare facility to its patient
as per implementation of Government Law (Kokodey, Gnezdova and Lomachenko, 2018).
 Purpose the main motive of this kind of organisation is to facilitate higher standard and
provide excellent facility to their patient in an appropriate manner. In addition to this, the
main aim is to provide superior quality care which is advantageous for its patient.
 Size In context of NHS, there are around 1, 06,430 doctors and around 2, 85,893 are
employed for the management of company. It is considered as a large size organisation.
 Scope they offer facilities or services to above 64.6 million individual people at UK. In
present time, their focus is to explore ample of facilities which are already operating in
Wales, Northern Ireland as well as England and many more.
Types of public sector organisation:
 Departmental undertakings it is considered as a tradition kind of public sector that is
operated, implemented and funded by any other government venture.
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 Public corporation it is a kind of organisation that involve Parliament special act. The
primary purpose is to make sure well being of individual person living in society.
 Legal structure It is considered as a public organisation which is given by special
parliament for financial support. The national authority provide overall support for
providing services to it’s individual person like medical test, treatment and many more.
Private sector it is considered as an economical part or parcel of country. This type of
organisation is operated by organisation, individual person, and sole proprietors in context of
partnership. For instance, this is considered as a private organisation and Spanish retailing
company and they deal in fashion industry (Khajeheian, Friedrichsen and Mödinger, 2018).
 Purpose the primary purpose of this company to increase profit and growth in term of
potential market. The main aim of Zara is to produce advanced designs for satisfying
need of customer.
 Size in this organisation, there are around 1, 76,611 subordinate that provide their
contribution or efforts in smooth running of organisation.
 Scope the organisation is considered as an international firm that operates in around 88
countries in world.
Types of private sector organisation
 Sole proprietorships when company is run by an individual person is considered as a
sole proprietor where only one person is considered as a owner of company. It is
determined as a simplest form of implementing business.
 Partnership when more than two people are come together for profit and improvement
of acknowledged from agreement of partnership that determine profit sharing, capital
progression and many more.
 Legal structure Zara follow legal framework and they listed their business in London
stock exchange. Furthermore, it is considered as a company in which their main focus is
to trading with its user in relation to share.
Voluntary sector it is considered as a sector which provides support to improve community
without any aim of earn profit. For instance, Oxfam is considered as a voluntary sector which
was founded in the year of 1942 and they want to improve international poverty, disasters as well
as so on.
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 Purpose the main purpose is to provide liberty to required people and also to society. The
primary purpose of this company is to develop lasting solution that is related to
inequality. Furthermore, due to participating in international change movement for bright
future that is completely free from disaster and poverty.
 Size is considered as a medium size organisation which provides health services in UK
and also solves the problem related to poverty, disaster and many more. In addition to
this, they have around 10,000 individual people who provide contribution against poverty
in around 90 Nations. Also they perform their work in around 20 independent
organisations into country.
 Scope it implements their business towards poverty around 90 Nation and also improves
international disaster, poverty and many more. It is considered as global ventures that run
their business in different location around the globe.
Types of voluntary organisation
 Unincorporated Association it is considered as a unit of individual person who
connected by mutual understanding that help in achieving goal in timely manner. They
have a separate legal entity for running their business in an improved manner.
 Charitable trust it is implemented to achieve social benefits for individual person. Their
main purpose is to provide charity to that person who needed it.
Legal structure this venture is considered as an organisation in which there are various
agreements between individual person as well as group to implement towards poverty and also
for injustice activities (Katz and Green, 2018).
Relationships among various functional areas in addition with its benefits and drawbacks.
In organisation there are various sections this is considered for achieving aim of organisation.
Activities related to operating function completely depend upon structure of organisation. Zara
adopts hierarchal structure of organisation in which flow of communication is differing from one
unit to another. The basic purpose of this Framework is to have a various layers and there are
various departments implemented their functions in an appropriate way.
Marketing and HR in context of Zara, both is very important for success of business
organisation. The HR division focus on fill available job vacancy by recruiting talented
subordinate. In addition to this, firing, sustaining and provide rewards to its subordinate for
executing their work or task in an appropriate manner. On other hand, marketing is very
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important for providing services to its target market and assess need or want of customer in
respect of services. Both functions plays an important role to assess need or requirement of
marketing staff after implement procedure of hiring talented individual person for achieving goal
of organisation (Bedianashvili, 2016).
Advantage and disadvantage it helps Zara to publish their products in an appropriate manner
by skilled or talented worker that help in achieving objective. Both the division impose direct
impact on operations or functions of Zara.
Finance and marketing Zara implement their operations for growth of organisation after
appropriate evaluation of marketing. In this context, Finance function provides financial support
according to the need of different division of market. On the other hand, Marketing department
implement different function for raising opportunity related to fund. The whole activities of Zara
help in assessing improvement in market and operate their business in simple form (Hillary,
2017).
Advantage and disadvantage due to have appropriate relation between finance and marketing
department the organisation objective can be accomplished in an appropriate manner. But due to
lack of Finance the functions of market cannot be implementing in an appropriate manner like
promotion which imposes direct impact on efficiency of organisation.
PART 2
Internal a well as external analysis to strengths and weaknesses of in context of organisations
PESTEL analysis of Zara
Political Government taxation, policy, licensing as well as other that help in controlling or
monitoring venture in specific country.
 Positive impact in context of UK, due to political stability which imposes direct impact
on Zara in context of smooth running of the business in global level and it improves
customer base.
 Negative impact government has implemented employment law that is considered as a
flexible, lower as well as recompense that imposes negative impact on company.
Economical this factor determine different component like economic improvement, rate of
interest, inflation, exchange rate and so on.
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 Positive Impact in context of UK, the country has improved GDP that is advantages for
company to make necessary development in its organisation.
 Negative impact fiscal companies such as banks make alteration in rate of interest for
handling fund that impose adverse effect on expansion of organisation.
Social it determines market trends, change in taste and preferences of customer and so on.
 Positive impact in context of UK, consumer chooses that product that is fashionable and
Zara provide them product according to their needs which imposes favourable affect on
company.
 Negative impact in present time changes or alteration arises in market trends and fashion
so that taste of target audience is altered which negatively affect Zara in context of its
manufacturing of wastage (Russo and Confente, 2017).
Technological it determine latest technology, technical innovation as well as Artificial
Intelligence and many more.
 Positive impact in context of UK, consumer focuses on online shopping that help in save
their time it imposes positive effect on company in context of enhancing ample of user.
 Negative impact in context of adoption of internet, it is considered as a delivering of
important fact that can be adopted by hackers that shows negative impact on its revenue.
Environmental is determined different factors such as weather, climatic condition,
environmental policy and so on.
 Positive impact in context of management, this organisation focuses on reduction in
wastage and also focuses on eliminating carbon footprint that impose positive influence
on environment of organisation.
 Negative impacts Zara is considered as a fast fashion company that enhance wastage
level which negatively affect sustainability of organisation.
Legal it signifies laws, legislation which is implemented by government or organisation.
 Positive impact in context of Zara, the management team obey employment law for
appropriate running of organisation.
 Negative impact the organisation has charged in context of stealing design and also for
concept of clothing that imposes negative impact on image of organisation in specific
market.
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PESTEL analysis of NHS
Political the political atmosphere in the country impose direct impact on NHS There are
different factor which impose favourable or adverse impact on political environment of NHS that
is given below:
 Positive the organisation of NHS is favourably influenced by stability and political
condition of UK.
 Negative the management of NHS are not able to focus on long term goal because there
is a continuous change in political atmosphere that influence improvement of
Organisation in negative manner (Prajogo and Oke, 2016).
Economical it determines economic improvement, employment, rate of interest and so on.
 Positive in context of UK, Government implement different measure to manage
economic crash that helps in dealing with financial issues in an improved manner.
 Negative Due to covid-19, the price of commodity are getting enhanced which negatively
affect the organisation while purchasing.
Social atmosphere of country exist that assess changes which is necessary to make. The effect of
several alterations is given below
 Positive NHS is situated in particular locality that helps in reaching large number of
hospital in which they require urgent care.
 Negative due to covid-19, patients get maximized and due to have limited capability of
subordinate the organisation adversely affected.
Technological technology is changed in quick manner and NHS executes it in order to remain
competitive.
 Positive technology positively influences and NHS in context of offering surgical
instrument that is linked to Medical Services.
 Negative the use of technology in context of managing patient and data related to
consumer can adversely affect organisation (Alotaibi, 2016).
Environmental every organisation is legally responsible to provide contribution towards
environment for their survival and maintenance.
 Positive There are different surgical instrument in order to protect the environment.
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 Negative the present crisis of corona virus affect the company in context of increasing
stress on subordinate
Legal legislation that are involved by NHS for appropriate operations which is given below:
 Positive the NHS focuses on manufacturing accounts in order to provide taxes on time
that help in increasing profit margin.
 Negative due to alteration in laws that imposes negative impact on organisation and also
affect expectation of its patient.
SWOT analysis of Zara
Strength Weakness
 Zara has approx 2000 outlets in various
part of globe.
 Zara is considered as a biggest largest
Spanish retailing brand.
 Zara has appropriately supply chain and
administration procedure in its
operation and function that increase
brand image of Zara.
 Zara adopt minimal promotional
techniques such as advertisement in
comparison to its rival firms.
 There is a high level of competition and
have a limited share of market that
increases chances of brand switching.
Opportunities Threats
 There are various international markets
that can be expanded by Zara. There is
an advantage in expansion in relation to
E-Commerce as well as online
marketing (Peleckienm and Polajeva,
2016)
 In addition with clothing, footwear,
perfumes there can be another product
which can be expanded by Zara like
electronics and Super Stores.
 There are various fake imitations which
impose direct impact on goodwill of
Zara. Because of large number of
competition, the consumer switching its
brand to other that affects the
organisation.
 Economic crisis or turned down, due to
gravity decreases sales of the
organisation in upcoming period of
time.
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SWOT analysis of NHS:
Strength Weakness
 National Health Services is considered
as a public financial health care system
that is located in England. It is
considered as second biggest
organisations that provide Healthcare
facilities around world.
 NHS is offering various health care
services to all residents from various
regions at UK. They are providing
various services at free of cost to its
user.
 There is a kind of financial issue, due to
services or facility which is offered
without any cost that involve
emergency treatment as well as
treatment due to infectious disease that
affect the company.
Opportunities Threats
 NHS is considered as a public finance
organisation. There is an opportunity to
expand their organisation in some
private sector to increase or enhance
source of finance.
 There are any other instruments such as
private healthcare which is operated to
NHS. They can establish any other
institution for offering financial support
to its services.
 NHS is financed from general taxation
as well as there are small efforts or
contribution from payment of National
Insurance fees is imposed as per
changes implemented according to the
immigration act 2014 that impose direct
impact on the structure of NHS
Lundbaek and Huth, 2017).
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Interrelation of strengths and weaknesses with external environmental factors
International among macro and micro factors of ZARA
Political:
 Strengths: In context of UK, there is stability in political condition that favourably effect
in context of international expansion of organisation.
 Weaknesses in context of UK, national authority focuses on alteration of laws that
imposes negative impact on organisation.
Economic:
Strengths the condition of inflation at UK helps Zara to provide appropriate range to its user
for purchase products.
Weaknesses unemployment rate imposes direct impact on profit of organization in negative
manner. They do not need to buy commodity from various cheap stores.
Social:
 Strengths: online shopping assists in improving profit and enlarge customer base.
 Weaknesses the organisation offer products and services at relatively low cost that
imposes negative impact on quality of goods (Escaleras and Chiang, 2017).
Technological:
 Strength Organisation provided great experience in form of online applications such as
cards as well as any other option.
 Weaknesses E-commerce is due to improvement in internet that affects sales of Zara.
Environmental:
 Strengths the administration of Zara perform work in respect of minimization of waste and
reducing carbon footprint.
 Weakness due to expand business in fashion industry, it increases waste that impose direct
impact on environment.
Legal:
 Strength the venture appropriately obeys employment law that helps appropriately running
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organization.
 Weakness imitation of clothing design imposes negative impact on image of company.
International among macro and micro factors of NHS
Political:
 Strengths: the organisation of NHS is favourably influenced by stability and political
condition of UK.
 Weakness: the management of NHS are not able to focus on long term goal because
there is a continuous change in political atmosphere that influence improvement of
Organisation in negative manner.
Economical:
 Strength in context of UK, Government implement different measure to manage
economic crash that helps in dealing with financial issues in an improved manner.
 Weakness: Due to covid-19, the price of commodity are getting enhanced which
negatively affect the organisation while purchasing
Social:
 Strengths: They have more patients for their services, it increases brand image of
company.
 Weakness: The organization do not handle the demand of requirement of enhancing
population
Technological:
 Strengths: NHS is capable to other technical machinery to offer appropriate healthcare
facility to its patient.
 Weaknesses: In effective management of training affect the use of technology through
staff member in medical facilities (Gaganis, Pasiouras and Voulgari, 2019).
Environmental:
 Strengths: The organization adopt decomposable in its surgical materials.
 Weaknesses: it is considered as a great participation in toxic waste is gathered around the
globe.
Legal:
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 Strengths: the NHS focuses on manufacturing accounts in order to provide taxes on time
that help in increasing profit margin.
 Weaknesses: due to alteration in laws that imposes negative impact on organisation and
also affect expectation of its patient.
CONCLUSION
On the basis of above mentioned report, it has been analysed that there are various goals and
legal organisational structure. Business environment is considered as an aid of overall intrinsic as
well as extrinsic factor that influence organisation in better way. This kind of component
imposes direct impact on potentiality of organisation to handle appropriate relation with its user.
The document will provide data information regarding various types of organisation, relationship
with various functional area and also its strength and drawbacks. Moreover, they also provide
explanation regarding PESTEL and SWOT and also discuss interrelation of strength as well as
weakness with different external or internal environmental factors.
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REFERENCES
Books & Journals
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fast changing business environment. In Competitiveness in emerging markets (pp. 3-
11). Springer, Cham.
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environment based on polycyclic theory. In The International Science and Technology
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Escaleras, M. and Chiang, E.P., 2017. Fiscal decentralization and institutional quality on the
business environment. Economics Letters, 159, pp.161-163.
Katz, J.A. and Green, R.P., 2018. Entrepreneurial small business. McGraw-Hill Education,.
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Cultural Potential of Social-economic Development of Georgia. Globalization &
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business customer loyalty analysis. Routledge.
Prajogo, D.I. and Oke, A., 2016. Human capital, service innovation advantage, and business
performance. International Journal of Operations & Production Management.
Alotaibi, Y., 2016. Business process modelling challenges and solutions: a literature
review. Journal of Intelligent Manufacturing, 27(4), pp.701-723.
PeleckienÄ, V. and Polajeva, T., 2016. Towards sustainable entrepreneurship: role of nonverbal
communication in business negotiations. Entrepreneurship and sustainability
issues, 4(2), pp.228-239.
Lundbaek, L.N. and Huth, M., 2017, April. Oligarchic control of business-to-business
blockchains. In 2017 IEEE European Symposium on Security and Privacy Workshops
(EuroS&PW) (pp. 68-71). IEEE.
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