HND Business Assignment: Zara Company PESTLE and SWOT Analysis

This report presents a PESTLE and SWOT analysis of the Zara company, focusing on its operations within the UK business environment. The PESTLE analysis examines the political, economic, social, technological, environmental, and legal factors influencing Zara's business decisions, particularly in light of Brexit and other relevant UK economic conditions. The SWOT analysis delves into Zara's internal strengths, such as its innovative fashion trends and strong supply chain, and weaknesses, including limited presence in some markets and low-scale marketing. It also highlights opportunities like leveraging artificial intelligence and expanding retail channels, alongside threats such as intense competition and regulatory challenges. The report concludes with a bibliography of cited sources.

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PESTLE AND SWOT ANALYSIS

Contents
Pestle analysis.......................................................................................................................................3
Political-............................................................................................................................................3
Economic factors...............................................................................................................................3
Social factors.....................................................................................................................................3
Technological factor..........................................................................................................................4
Environmental factor.........................................................................................................................4
Legal factors-.....................................................................................................................................4
SWOT analysis of ZARA company......................................................................................................4
Strengths............................................................................................................................................4
Weaknesses.......................................................................................................................................5
Opportunities.....................................................................................................................................5
Threats...............................................................................................................................................6
Bibliography..........................................................................................................................................7

The company where I interned was ZARA. The ZARA company is one of the biggest
international chain of apparels. It is the Spanish based organisation that is affected by the
internal and external environment of the country.
Pestle analysis
Political-
The political environment affects the functioning of the enterprise in many ways. During the
recent years the UK environment had been in the continuous state of flux due to the Brexit
philosophy. The UK has the modern parliamentary democracy that is marked by the
constitutional monarch but the monarch’s role is highly ceremonial in nature. There four
important political party in England that are largely on front for fighting off the elections. In
recent times, there has been the high degree of political instability which was created due to
the decision of the Brexit. The Brexit decision caused the large scale of mass violence and
conflicts among the states in the country. The political instability resulted in disturbances for
the business to perform successfully. The UK also maintains good relations with various
international organisations such as UN and WHO that grants its power and autonomy to get
the things done.
Economic factors
The second important component is the economic factor that affects the business decisions.
According to the current GDP UK is one of the largest economies in the world but in past the
episodes of recessions has affected the economy in many ways but it achieved the great peace
among the countries. In 2017, the household sector of British faced with the inflation that
affected the consumers buying power. In the current time, the inflation rate of the British is
1.7% which is optimum rate but in the 2017 the rate was 3.1 percentage. Some experts
claimed that the rates will increase in the future thus affecting the buying power of the people
around.
Social factors
UK is considered one of the most important consumer markets in the globe. In the recent
decade, there has been 5 percent surge in the consumer demands in the various products. The
UK has offered the breeding ground for various real estate, travel and tourism, and
healthcare companies. The UK has been called the diverse country where people of diverse

religion reside that gave the opportunities to various companies to produce the specialised
products for the market segment.
Technological factor-
The UK is considered one of the most technologically advanced countries that has imbibed
the latest technologically updated ways of doing things. In UK, London is considered the
technological hub of the nation where the big business tycoons have invested millions
amount to it. In the past, the Country has attracted the huge technological investment that is
28 billion euro. Although it has achieved great heights but the countries like USA, Japan and
south Korea are far ahead of it in the technological sector.
Environmental factor-
In the past, In UK there were some of the environmental issues that were faced by the UK
that affected its economic growth in the long run. The climate change meetings had focused
on reducing green house gases emission for which UK was in the top of the target list
(Bolton, 2015). The pressure on the UK to reduce the green house gases emission affected the
economic growth of the country negatively.
Legal factors-
The legal factors also influence the working of the business in the particular country. Due to
the changing the governments, the laws keep changing that affects the stability of the
business in the long run (Cavaleri & Shabana, 2018). Some of the laws include Employment
act 1996 that protects the rights of the employees in the company or business. Such laws give
power to the employees to fight against any misconduct by the business.
SWOT analysis of ZARA company
Strengths
High innovation in fashion trends
Zara brand has been associated with the latest fashion trend that makes it highly profitable in
its operations. In most of the areas, it has defied the conventional fashion trends thus making
it one of the trendiest brands. The Company has been listed number of times under Forbes 50.
The high rate of innovation in fashion trends has affected the social environment by changing
the preferences of the consumers (Cleary, 2017).

Strong supply and retail network
The Zara boats off the strong supply and retail network where it is able to meet the consumer
requirements in time. It has strong flow of communication thus strengthening the relations
between the suppliers and the consumers. In UK, it has around 700 retail stores thus
increasing the reach of the consumers.
Continuous investment in technology and innovation
Zara has been one of the best fashion brands which was possible due to its high level of
investment in the technology and innovation thus making its products of superior quality.
Due to its high investment in technology, it has achieved the economies of scale (Future
Learn, 2019).
Weaknesses
Lack of presence in some parts of the market
Although Zara has achieved the presence in most parts of the world but there are places
where it has lacked its presence. The stores of Zara are less Malaysia, New Zealand, and
Thailand but are high in numbers in USA, UK, and China (The Business Communication ,
2019).
Low scale marketing campaigns
There have been low scale campaigns of marketing as compared to activities that required
pulling the consumers. Due to the low scale marketing campaigns, the sales of inditex got
affected negatively resulting effectiveness in the things.
Opportunities
Artificial intelligence for customer experiences
The companies can achieve the better consumers experiences by incorporating artificial
intelligence. In its operations. The Zara company has the opportunity to improve the
consumer experiences in the best possible manner. The company has the high level funds
that it can invest in artificial intelligence ( Cinimagestudio , 2104).
Retail channel expansion
Zara has the immense opportunity to expand its retail channels so that the higher consumer
reach can be initiated. It has achieved the presence in China, USA, UK and India. It has the

opportunity to expand it to other markets that include Thailand, Malaysia, and Sri Lanka (The
North Face, 2019).
Threats
High level of competition in apparel segment
There is high level of competition in the fabric segment as new companies keep coming to
ensure that the needs of the consumers are met in an effective manner. Zara also faces
competition from various competitors that include Mango and other famous clothing brands
(aylor, 2017).
Regulatory threat-
Zara is a multinational company that has to operate in various international locations to
achieve the better sales in the market. As it operates, in different countries, it has to face
various issues of regulations as laws of every county is different (Bowling, 2015).

Bibliography
Cinimagestudio . (2104, November 24). Benefits of Motivational Videos for Employees.
Retrieved July 26, 2019, from visual: https://visual.ly/community/infographic/other/benefits-
motivational-videos-employees
aylor, K. P. (2017). . A description of the “event manager” role in resuscitations: A
qualitative study of interviews and focus groups of resuscitation participants. Journal of
critical care, , 39 (1), 254-258.
Bolton, M. M. (2015). Community organizing and community health: piloting an innovative
approach to community engagement applied to an early intervention project in south London.
Journal of Public Health , 38 (1), 115-121.
Bowling, A. M. (2015). The effect of simulation on skill performance: a need for change in
pediatric nursing education. Journal of pediatric nursing , 439-446.
Cavaleri, S., & Shabana, K. (2018). Rethinking sustainability strategies. Journal of Strategy
and Management, , 11 (1), 2-17.
Cleary, M. (2017). Recovery-oriented care and leadership in mental health nursing. Issues in
mental health nursing , 458-460.
Future Learn. (2019, August 1). opportunity recognition. Retrieved August 24, 2019, from
futurelearn: https://www.futurelearn.com/courses/technology-entrepreneurship-start-a-new-
venture/0/steps/45095
The Business Communication . (2019, August 1). Business Communication. Retrieved
August 15, 2019, from thebusinesscommunication:
https://thebusinesscommunication.com/what-is-business-communication/
The North Face. (2019, August 20). Durability. Retrieved August 20, 2019, from
thenorthface: https://www.thenorthface.com/about-us/responsibility/product/durability.html