Zara: Environmental Influence on Organizational Structure and Analysis

This report provides a comprehensive analysis of Zara, a Spanish apparel retail company operating in the fast-fashion sector. It begins by exploring different types of organizations, including public, private, and voluntary sectors, with examples like the NHS and Oxfam. The report then examines the relationships between various functional areas within Zara, such as marketing and HR, and finance and marketing, highlighting their advantages and disadvantages. It also delves into Zara's hierarchical organizational structure and its implications. Furthermore, the report conducts a PESTEL analysis, evaluating the political, economic, social, technological, environmental, and legal factors influencing Zara's operations, with specific examples related to the UK market. Finally, the report concludes by analyzing the strengths, weaknesses, opportunities, and threats (SWOT) facing Zara, considering the interplay between internal factors and external macro components.

Environmental Influence

INTRODUCTION
Business atmosphere is primarily analysed like a sum of entire external and internal
constituent that has instant and indirect impacts on decision making of company. These aspects
influence enterprise to develop and manage effective customer relations. This document
considered Zara as a private enterprise which is a Spanish apparel retail sector company and
operates its business as fast fashion (Belas and et. al., 2018). It specialise in garments, footwear,
beauty products, accessories and many more. This written document will consider different
topics like different types of organisation, relationship among different functional areas by
considering their pros and cons, PESTEL analysis and SWOT analysis. Further, it will also
explain about the interrelation of strengths and weaknesses with exterior macro components.
PART A
Different types of organisation
Basically, there are several forms of organisation that are described underneath:
Public sector: This is described as firms that are formed to manage method as well as policy
as well as performs that allow a government for accomplishing its goals. One appropriate
example of it is NHS; this was established within year 1948 in England, Wales and many more.
This basically facilitates services of heath care to its patients based upon legislation and policy of
government.
 Purpose: The key intent of it is to render effective standard of proficiency as well as
excellence services to its patients as well as services provider. Moreover, their intent
involves standard quality of care which is safe, focused as well as efficiency in context
of patient.
 Size: It have about 106, 430 doctors, 285,893 nurses and health care people are working
in around 30,000 administration and others. This is a kind of big size firm.
 Scope: This basically facilitates its services to more than 64.6 million people in UK
(Hamilton and Webster, 2018). Currently they are looking forward to discover their huge
operations in areas where they are already performing like Scotland, Wales, England and
others.
 Types of public sector organisation:
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o Departmental undertaking: This is regarded as one of the oldest public division
venture that is regulated, worked as well as funding by other government firm.
o Public or statutory corporation: The key aim of it is to assure welfare of public.
This is regarded as the company that undertakes into existent special act of
Parliament.
o Legal Structure: The NHS is a community business that is established along with
few types of particular support of assembly financed (Čepel and et. al., 2018). The
government facilitates them overall sustain services for developing various
opportunities of public services such as treatment, blood test, medical test and
others.
Private sector: This is considered as crucial economical part of country. These kinds of
entity are performed by entities, sole proprietary and group of individuals. The main aim of is
to obtain profit as well as sustain for longer period. Such as ZARA, it is a private entity and
also a well-known Spanish retailer of Apparel as well as mainly expertises in fashion.
 Purpose: The key purpose of private organisation is to gain profit and become a
developing firm into potential marketplace. Moreover, the key intent of ZARA is to
manufacture unique and newest designer clothes that fulfil the expectation of clients.
Also, they desire to become a huge trader entity in all over the world.
 Size: The respective entity is large in size in which around 176,611 workers are
performing to accomplish its goals.
 Scope: Respective entity is a global enterprise that performs in about 88 countries like,
Brazil, Canada, Russia and many more.
 Types of private sector organisation:
 Joint venture: It is regarded as corporation whose financial resources are limited but
always leads towards undertaking high risk (Brennan, Canning and McDowell, 2020).
Herein, the capital of business can be maximising through sale of many worthy shares.
o Sole proprietorship: While a company is managed by person then it is recognized
like sole proprietorship where their proprietor shares whole recipients and funds
by them self. It is also deemed to be custom and simple form of performing
commerce and run an enterprise. There is less restraint in order to easy produce to
disband.
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o Partnership: When two or more person executes collectively with intent to earn
expected profits and enlargement is acknowledged as corporation. These types of
entities are framed by singing the affiliation conformity that considers sharing of
incomes, capital succession and others.
o Legal Structure: Zara fulfil public limited organisation legal structure and this is
scheduled on London stock exchange (Hans, 2018). Furthermore, this is a limited
accountability company who shares can be sold and deal to audiences.
Voluntary sector: It is majorly shaped with intent to maintain and progresses expand
society without any aim to increase revenue. Herein, national authority interference is limited.
For instance, Oxfam, it was developed in year 1942 and desires to expand international poverty,
adversity and many more.
 Purpose: The main motive is to assist by contribution main freedom and rights to
required individuals and products. One key objective of respective firm is to develop a
lasting solution for insufficiency and disparity. Further, contributing in worldwide
dynamic faction for developing upcoming time that is secure and free for scarcity
 Size: Respective Company is medium sized firm that provides health services in UK to
remove deficiency reason, pro-migration and many more. Further, it has more than
10,000 individuals who execute hard to fight towards poverty across 90 countries, Also,
they execute into 20 sovereign altruistic corporations into nation.
 Scope: It execute to difficult to fight regarding scarcity in crossways 90 countries and to
work regarding remove worldwide poverty, tragedy and others (Gaganis, Pasiouras and
Voulgari, 2019). Furthermore, it is an international venture which runs in different
nations of the world. Types of voluntary organisation:
o Unincorporated association: It is a part of two individual which is collective by
common perceptive for lawful intent to performed an efficient aim or not. Further,
it does not have any lawful power and right like an individual firm.
o Charitable trust: This is primarily developed to achieve considerable societal
benefit s for person. This also recognized as fixed faith which is generated for
helpful intent.
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 Legal Structure: This charitable firm is unincorporated organisation which was
developed with an concord among numerous individual and assembly for target to
perform regarding unfairness actions and shortage.
Relationships between different functional areas along with its advantage and disadvantage.
In establishment, numerous divisions are performing to gather in indication to achieve their
aims in well defined form. Within these entire functioning departments, practices are supported
in its organisational framework (Halbert and Ingulli, 2020). Zara utilise Hierarchical
organisational constitution where announcement runs differentiate in one practical part to others.
The crucial reason behind it is that this structure is great and numerous coats where diverse
divisions are performing in several fields. The interrelations between diverse divisions are as
under:
Marketing and HR: In this company, both section play an important role where more duties of
HR administrator is recruiting, assorting, firing, retaining and many more. When marketing plays
efficient function for endorsing organisation’s goods and services into target market and also
analyse consumers demand s regarding their products and facilities, Both execute together in
respective firm like HR perform to measure marketing workers needs after that is conduct
activity of hiring and assortment where knowledgeable employees are needed to attain goals.
 Advantage: It assists Zara to advertise their commodities and facilities in effective
manner with the help of skilled employees. So, these outcomes in accomplishing
organisational goals in appropriate form.
 Disadvantage: The key limitation of it is that sometime both functions allow each other
needs that affect Zara business activities and operations inauspiciously.
Finance and marketing: In respective enterprise, both section perform together to accomplish
enterprise’s development decisions after competent marketing assessment. In explicit manner,
finance department tender those necessary economic supports by fund administration based on
marketing section demands. While marketing division perform for finance to examine capital
raising growth options. These all actions aid Zara to assess market growth areas where they may
runs its new outlets in effective way.
 Advantage: Both finance and marketing division so that they can capable to analyse
differ organisational growth options for expansion and many more (Hamad, Elbeltagi
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and El‐Gohary, 2018). This is beneficial for respective company’s business development
and accomplishes organisational objectives efficiently and appropriately.
 Disadvantage: Cause of shortage of funds, marketing division cannot able to perform its
processes like endorsement and other which has unfavourable influence upon Zara’s
efficiency and execution.
Organisation structure: Zara organisation has adopted Hierarchy organisational structure which
involves intersection with one of kind functional areas of the business (Oxfam, 2017). A
hierarchical corporation is an organizational structure wherein each entity in the organization,
besides one, is subordinate to a single different entity. In respective organisation, the hierarchy
typically includes a singular/organization of power at the top with subsequent levels of energy
beneath them. Different departments like finance marketing operational and HR are interrelated
and collectively allow performing the higher monitoring and controlling manner.
Matrix organisational shape- It is a business enterprise shape in which the reporting
relationship are establish as a grid or matrix in preference to in the conventional hierarchy. In
different phrase, inside this form of shape, personnel have dual reporting relationships, basically
to both practical administration and product supervisor. Phillips and Caterpillar are some
effective instance of this structure.
Divisional organisational structure- It is type of shape that teams each organisational
characteristic into division. Each division carries all of the required belongings and features
within it to support that product line or geography. In this shape type, the enterprise company is
classified in to factors which might be supplied accountabilities supported on operational wishes,
Each segment handles a particular place of set of strategic goals. McDonald’s is an effective
instance of this type of shape.
Functional organisational structure- It is a shape that utilised to organise and control
employees. They are grouped based totally on their specific skills and information. It vertically
systems every division with roles from president to finance and income departments, to
purchaser service, to employees allotted to at least one commodity and provider. Starbucks is a
good example of this sort of organisational structure.
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PART B
Internal and external analysis to strengths and weaknesses of organisations
PESTEL analysis of Zara
Political- Government strategies of excise, licensing and other for domineering enterprise. Zara
is a worldwide enterprise so there implementation is influence through laws and political
activities of nation (Brotspies and Weinstein, 2019).
 Positive impact: In UK, political stability is the main component that favourably impacts
Zara in form of operating commerce globally and expand customer base.
 Negative impact: Government has created employment law that supermarket should offer
mix of employ that is lower and great remuneration, supple. thus, achieve requirement of
diverse person belonging to segment that are student, middle and lower ground of
inhabitants.
Economical- This factor includes factors such as fiscal growth, interest rate, economic rate,
increase and devaluation rate, trading rate and others. These are the components that influence on
fiscal value and profit of establishment.
 Positive impact: In UK, the nation has increasing GDP that benefits Zara to create
growth in their business.
 Negative impact: Financial company like banks alter their interest rate for
administrating fund flow that influence superiors of this company in form of
expanding business in other country.
Social- It explains that company offer goods and services for providing satisfaction to society
(Calabrese and et. al., 2018). It includes several components such as modification in customer’s
executions, culture, beliefs, values and many more.
 Positive impact: In UK, individual execute to purchase merchandise from supermarket
where all stuff are accessible in one outlet. This favourably impacts Zara in order to
workers.
 Negative impact: In UK, population is dropping that impact on labor force and result into
their shortage. It analyses that an administration of Zara suffers complexities in order to
workers.
Technological- It considers technological invention, advance technology, artificial intelligence,
research and development and many more.
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 Positive impact: In UK, individual mostly prefer online shopping cause of having less
time due to working so online shopping facilities of Zara, favorably impact it and
increase its range of target audiences (Fabus, 2018). Negative impact: With the utilisation of internet, it is being determined that online
delivering of significant facts can be used by ethical hackers regarding Zara. It may
influence their earning as well.
Environmental- This component include environment associated factors such as climate,
weather, ecological laws, waste reduction activity and recycling etc.
 Positive: In Zara, the management of this company use waste decrease action and also
determined to link the pact to minimise their carbon footprint that generate a positive
influence over atmosphere and business of organisation.
 Negative: Zara is a quick fashion brand so they quickly jump on fashion that increases
the degree of waste that unenthusiastically impact brand in form of its business
sustainability.
Legal- It indicates to those laws and legislation that are framed through the government for
efficient operating of business.
 Positive: In Zara, the administration efficiently includes all laws such as employment,
ecological and many more that form favourable influence over its business.
 Negative: The brand has been blamed of stealing designs and clothing conceptions form
that Adidas and Balenciaga that influence the brand image and its sustainability
(Jevšenak, 2019).
PESTEL analysis of NHS
Political- The opinionated atmosphere in the country is impacting at NHS. Some of the impacts
that are positively and unconstructively pressure the political environment of NHS are as under:
 Positive: Political stability in UK is the component that positively impacts the business of
National Health care Service.
 Negative: The managers in NHS are not able to execute on the long time because the
constant dynamic political environment of the country that negatively impacts expansion
of venture.
Economical- It considers interest rate, financial expansion, currency rate, inflation and deflation
and many more (Cepel and et. al., 2019).
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 Positive: In UK, national authorities set up certain severity measures to deal with
financial issues so demeaning the budget measure favourably influence this enterprise to
handle economic complexities.
 Negative: Cause of Brexit, the situation of inflation occurs and cost of goods and
facilities are maximised that unfavourably influence NHS business.
Social- Social atmosphere of the nation in NHS is present will investigate in the modify that they
require to form. Some modifications that have been origin in the respective company that
favourably and unenthusiastically influence the establishment.
 Positive: The NHS is determined to be situated in the region so that people can appear at
the hospital when they need emergency care.
 Negative: Cause of corona disease epidemic, development and maximisation is arisen in
patients figure and cause of having restricted workers and staff as well as capacity of
hospital, the healthcare firm influence in negative form.
Technological- In this tech friendly world, technology is growing rapidly and the NHS should
execute it so that they can continue foreword in the rivalry Technological impact on NHS is as:
 Positive. Technology positively inference NHS in form of given that surgical instruments
and original equipments connected to health check services.
 Negative: More use of machinery regarding administration of patients’ information can
unfavourably affect the venture in term of hack and leak of information.
Environmental- Each enterprise is lawfully and morally accountable to provide to the
surroundings within they sustain (You and et. al., 2019). The influence of environment in NHS is
as:
 Positive: NHS uses reusable and decomposable surgical equipments so that not harm is
reasoned to the atmosphere.
 Negative: The existing corona issues affect the working atmosphere of the company
regarding creating pressure and pressure on workers.
Legal- The lawful activities and legislations that are considered by NHS for its appropriate
operation. The persuade of them as below:
 Positive: NHS has to formulate and design fiscal statements and records each year so that
supervision can administrate a pathway of the taxes that recompense and the profitability
that they receive (Hansen and et. al., 2018).
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 Negative: Modifications in laws and administration laws create adverse impact over
commerce of NHS and prospect of patients.
SWOT Analysis
It is deemed as the tool to measure four aspects like capability, weaknesses growth
options and threats of business enterprise and helpful in making decision efficiently and
effectively. So, the SWOT analysis of Zara and NHS are defined as under:
SWOT analysis of ZARA
Strengths:
Superb supply chain: As Zara, is reputed to get their designs from concept to stores
within two weeks whereas this assumes competitors for at least six weeks or above, involuntarily
it improves Zara the trendiest shop that latest design in fashion. In about 450 million
commodities are framed each year through them. It naturally gets attentions consumers to visit
their store frequently for checking new designs.
Stronger presence: It is also the appropriate capability of Zara because they maintain on
exploring their presence in around entire globe. So, currently it has approx 2259 outlets in entire
globe with having gross sales of 18.4 billion per annum. Also, it maintains extending their
existence each year in appropriate and efficient manner.
Weakness:
Lack of advertising: It is the weakness of Zara as brand may double their revenue and
turnover though advertising its latest compilation (Krajnakova, Navickas and Kontautiene,
2018). So, this is also included to be trendy fashion outlets and may simply get attention several
customers by endorsement and will develop different positive word of mouth for organisation.
Opportunities:
Online e-commerce: Zara may take advantages of online buying trends and explore more
online outlets because it brings a scramble in sales at currently world situation.
Threat:
Competition: It is the biggest threat of Zara because it is not a single one who helps
stylish design but also there is diverse enterprise such as H&M, Vero Moda etc. are
acknowledged for their design (Luiz, Ganson and Wennmann, 2019). But the advantage to
respective entity is that other brands are more costly in comparison to Zara while they help
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efficient designs at affordable cost. Even though, rivalry drives towards saturation into semi
premium segment instantly that influence its margins.
SWOT analysis of NHS
Strengths Weaknesses
 Its majorly capability is that, NHS do
not has any real rivals.
 Even though, private hospitals are
accessible crosswise UK, the company
NHS is acknowledged for their
Accident and Emergency facilities.
 Its major weakness is they do not cope
up with demand as of enhancing
population.
Opportunities Threats
 Its key opportunities are they can use
several advance marketing tactics
because this assists NHS to improve
their profile.
 The major threat of NHS is that it has
high workforce turnover rate.
 Moreover, its reputation gets influenced
through outworkers work.
Interrelation of strengths and weaknesses with external macro factors
International among macro and micro factors of ZARA
Political:
 Strengths: In UK, there is political condition that favorably persuades Zara in form of
enlarging business globally (Syazali and et. al., 2019). Weaknesses: In UK, government modifications in their policies and employment laws
that influence the administration of respective company’s business.
Economic: Strengths: The condition of inflation in UK helps Zara to have effective amount of
consumer to purchase products. Weaknesses: Unemployment rate of respective enterprise influence costs and
profitability such as resident’s authority shift to reprehensible goods (Kokodey,
Gnezdova and Lomachenko, 2018). For this, they will not need to buy goods from
several despicable outlets.
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Social:
 Strengths: There is movement that individual and target audiences choose to purchase
goods in size and from one store that advantages Zara to improve their trades. Along to it,
online shopping option also helps in developing profit and number of customer.
 Weaknesses: The respective venture provides affordable products that outcome into
people performance that product may not be of efficient quality.
Technological: Company, buyers are presented huge tech knowledge and pay through online mode such
as card that make payment procedure easy. Weaknesses: E-commerce that is causes of growth of internet that impact on sales and
profitability of Zara.
Environmental:
 Strengths: The administration of Zara exertion towards wastage minimization and
decreasing carbon foot prints which is the ability of it.
 Weaknesses: Cause of fast fashion organization, the wastage is maximization which
affects environment and economic condition.
Legal: Strengths: The administration of the company include employment, health and safety and
consumer protection act which is the strength of the establishment (Lopez-Rodriguez and
et. al., 2020).
 Weaknesses: Copying garments and stealing designs impact its brand images in
unfavorable form.
International among macro and micro factors of NHS
Political:
 Strengths: Political constancy is one of the major political factors that positively power
NHS and strengths of the company in form of development.
 Weaknesses: Lack of the resources is one of the weaknesses and Brexit arise inflation
that is the weakness of the company (Belas and et. al., 2018).
Economical:
 Strengths: Cause of providing facilities at reasonable cost, the company is acknowledged
for its effective facilities that develop its economic system.
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 Weaknesses: Lack of assets and different financial regulations, the NHS under strain to
reduce the pay of its workers that maximize employee turnover.
Social:
 Strengths: Due to having number of patients in form of its effective services that develop
its brand image and set an efficient position in society.
 Weaknesses: Due to increasing population, they do not cope up with the demand.
Technological:
 Strengths: The National Health care Services has been capable to use technological
instruments to offer quality and quick healthcare to all its patients.
 Weaknesses: Improper enterprise of training affects the utilise of technology by
workforce in their health check services.
Environmental:
 Strengths: The enterprise utilize reusable equipments and medical or surgical equipment.
 Weaknesses: This organization is a main involver to the noxious wastage which is
assembling throughout the globe.
Legal:
 Strengths: The corporation efficiently includes laws in its all business actions cause of
which it’s accounting and financial statement are accurate and tracked through
governmental bodies (Hamilton and Webster, 2018).
 Weaknesses: Patients that are unhappy and unsatisfied with the extent of care through the
NHS are now taking their complaints in legal platforms.
CONCLUSION
This has been summarised from the above mentioned content that business environment
plays important function in to business life cycle. Moreover, this also classified into two
components such as exterior and interior which have instant and indirect impacts on
determination devising of business. So, for a company, it is required to concentrate on strategic
planning tactics that will assist in administrating pessimistic effects of these components.
Further, the interrelationship within diverse functional areas permits company to attain
organisation’s aims because they execute effectively regarding goals. Along with this, SWOT
and PESTEL analysis of macro and micro aspects is executed so that efficiency into companies
can be accomplished.
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REFERENCES
Books & Journals
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