Business Report: Zara's SWOT, PESTLE Analysis & Leadership Style

This report provides a comprehensive analysis of Zara's business strategies, utilizing SWOT and PESTLE frameworks to evaluate the company's internal strengths and weaknesses, as well as external opportunities and threats. It delves into Zara's competitive advantages, such as its fast-fashion model and online presence, while also addressing challenges like sustainability and changing consumer tastes. The report further examines Zara's approach to political, economic, social, technological, legal, and environmental factors, highlighting its efforts to comply with trade regulations, adapt to consumer behavior, and embrace corporate social responsibility. Furthermore, the report suggests the adoption of an affiliative leadership style inspired by Daniel Goleman’s model to foster trust and harmony within the organization. The analysis concludes by emphasizing the importance of integrating environmental and social considerations into Zara's business practices to ensure sustainable growth and maintain a competitive edge in the global fashion industry. Desklib offers a range of solved assignments and study tools for students seeking to explore similar business analyses.

BUSINESS

TABLE OF CONTENTS
BUSINESS.......................................................................................................................................1
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
SWOT Analysation of Zara.........................................................................................................3
PESTLE Analysation of ZARA...................................................................................................5
Leadership style from Daniel Goleman’s ...................................................................................6
Corporate Social Responsibilities of ZARA................................................................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
In general, a business or an organization requires numerous strategies and theories to
implement on the occupation from which they can obtain the higher success. Choosing an
organization named ZARA which is a Spanish apparel and mainly deals in fashion-clothing,
accessories and footwear located at Spain. The parent organization of ZARA is Inditex company
which is a multinational clothing organization(Green, 2020). The company has 2,270 stores in
the entire world and providing the best clothings and products. Here, the report is illustrating the
ZARA company business strategies from which they can gain competitive advantage and
develop themselves at higher peak. Along with this, is also mentioned the leadership style which
also influence the business and its result. In this report, it has also mentioned the importance of
corporate social responsibilities which can influence the business.
MAIN BODY
SWOT Analysation of Zara
The SWOT refers to the strengths, weaknesses, opportunities and threats to the firm. The SWOT
helps in examine the internal environment of the company. The elements of the internal
environment can be managed within the company. In order to understand this with clearance,
here is the SWOT Analysis of Zara.
Strengths of the company- The strengths determines those factors that adds glory in the
performance of the firm. Here are the strengths of the Zara.
Pioneer advantage- The company has been proven effective enough in producing the
fashionable products. This is one of the strength of the firm as the customers are highly
influenced by the fashion. And the products of the firm is providing the complete assurance of
the latest fashion.
Online platform- The firm is highly active on the online platform as the large number of
customers prefers the online shopping (Teoli, Sanvictores and An, 2019). Now days, the
consumer has been shift towards the online shopping more. It has been found from various
studies that, the online growth of the firm has resulted in gaining large number of customers in
the favour of the firm.
Designer team- The organization has been proven highly effective in terms of converting the
desires of the customers into the latest designs. The firm has approached the various designer

team. And all of them working effective in order to add those designs in the clothes that has been
demanded by the customers.
Weaknesses of the firm
Sustainability- The company is keeping their head high with maintaining the fashion trends in
the market. At the same time the fast-fashion concept of the company acting as a barrier in
managing the concept of sustainability. The company is producing large number of fashionable
products but, this is somewhere affecting the sustainability concept of the firm.
Changing taste of customers- Fashion industry is one of that industry that keeps changing as no
fashion lasts for a long time. Therefore, it has been considered as one of the weakness of the firm
(Vlados, 2019). It is hard to immediately adopting the changing demand of the customers.
Therefore, the company has approached the designer teams.
Opportunities to the firm
Adopted the eco-friendly environment- In order to change the weakness into the strength the
company is focusing on performing the corporate social responsibilities towards the
environment. As a result, this leads to increasing the goodwill of the company in the market.
Customers and investors are getting attracted towards the company.
Rapid delivery cycle- The customers visit the Zara stores at online and offline platform numerous
time. The company never fails to deliver their product on time. This creates the opportunity in
relation of increasing the sales (Vlados and Chatzinikolaou, 2019). As a result, the company
makes more sales at both the platform and earns high profit.
Threats to the company
Competition- Shein is the biggest competitor of the Zara. The company has a threat from the
competitor firm as the Shien also ensures the latest fashionable brand to the customers. But,
rapid delivery style along with adopting the effective designer team enabling the firm to face this
threat.
Price war- As the company has its brand value in the market. The company is assuring quality
product along with including fashion (Abugalia and Mehafdi, 2018). Therefore, the prices of the
firm is high. This act as a threat to the firm. But, the trust of the customers towards the firm helps
in maintaining this threat.

PESTLE Analysation of ZARA
PESTLE refers to the political, economic, social, technological, legal and environmental factors
that affects the business. It helps in determining the external environment of the business.
Political factor- The company performs its operations at the global level. Therefore, it is
important to maintain the trade regulations. The trade regulations keep fluctuating. This works as
a barrier in performing the trade activities for the firm. The company puts a keen focus over the
activities of the international market (AKMAN, 2020). So, the company can become aware about
the changes that can take place.
Economic factor- The company has its brand value and the prices of the firm product is high.
This acts as a barrier in some market. The demand ratio for the Zara has been decreased in those
market which are not stable. The company often introducing the affordable price for certain
products in order to solve this factor.
Social factor- The changing taste of the consumers impacts the performance of the firm. The
company has adopted the concept of studying the consumer behaviour in order to know the
aspects that affects the purchasing power of the customers. As a result, the company is
effectively managing the demands of the customers.
Technological factor- The company gathers the data with the help of making research. The
organization is one of the leading firm in fashion retailers. The company makes the observation
over the market and gathers the data in their software (Adagba and Shakpande, 2017). But, there
is a risk in relation of less accuracy of data. This can impact the performance of the firm.
Legal factor- The company has to face the copyright issues. The company is making fashionable
products. Therefore, there is a threat of getting the blame in relation of creating the duplicate
products. As a result, this affects the image of the company. Therefore, the company is
effectively maintaining the laws and regulations that has been created for the fashion industry.
Environmental factor- The company has to face the certain allegations in relation of harming the
environment. The fashionable products cannot be recycled. Therefore, the company has to face
the obligations. In order to solve this factor, the company has adopted the effective concept of
performing the ethical consideration towards the environment (Zinecker and et.al., 2021). As a
result, the company is performing their corporate social responsibilities towards the nature. The
company often takes the sustainability pledge and promoting the afforestation and providing the
assurance of not harming the environment.

In the above research, it has been founded that ZARA company has improved their strategies
from which they can be able to deal with the threats and can achieve the better opportunities in
the future. I observed that, during the pestle the company has enhanced the understanding of the
different sectors which involves the political, environment, legal, technologies, economy and
social. Looking at political factor, I founded that ZARA is a huge company requires trading of
their products, and they apply their transportation by following all the rules and regulation of
government (Boyle, Gonyeau, Flowers, and et.al., 2018). Similarly, In the social approaches, the
ZARA organization focus in collecting the knowledge of consumer behaviour from which they
have an opportunity to grow. Technology is also helping and aiding them to grow and develop
with the utilization of data and software which is also creating a huge opportunity to expand their
business to an individual with the social websites. I also observed that, ZARA have an
opportunity to grow their business by reducing the environment effects and follows the corporate
social responsibility in their company. During the research, I studied that the organization is
having an opportunity by keeping their process of the material and goods at low from which a
consumer will be able to purchase accordingly and it might affordable for them. All these
activities can change into threat if ZARA will not focus on these factors and start only focusing
on their benefits. In my opinion, an organization has many responsibilities to drive their
business, but they also had a responsibility of taking care of the environment and social
requirements from which they can enhance their growth and development with a speedy manner
(Sorour, Boadu, and Soobaroyen, 2020). The ZARA has a threat on their opportunities when
they do not focus and concentrate on the consumer desires, not aware of environment, not
applying the legal and political factors. Nowadays, there is a huge competition in the clothing
retail industry and the rivalry company can take the advantages from not following and focusing
on these factors. I founded that ZARA has growing and developing in a very effective manner by
understanding the importance of pestle factors in their company.
Leadership style from Daniel Goleman’s
It has been recommanded that Zara organization needs to adopt the affiliate leadership style in its
organization. This styles majorly focus on the relationship and people. They are required to keep
a good and healthy bond with their team members so that they can feel happy and put their best
efforts n the development of the Zara (Iqbal, Javed, and Muhammad, 2020.). This leadership

style of Goleman leads to trust and harmony on each other while workings as a team. An
organization can keep their team members happy by asking them about their reviews,
suggestions and feedbacks from which a management can provide them the best facility
accordingly. Asking and providing them a comfort level with a better together will build faith
and team spirit from which the company can grow and develop at the higher success. It has
already known that working as team results very effective as it also mentioned and performed in
the previous studies (Lauer, 2021). Sometimes, this leadership style can lead to fear because of
lack of productivity and accountability as the team members have a good relation between them,
and they got a priority so that they are not able to put and provide their best efforts and hard
work which can convert it into a beneficial result. This style also brings the people together and
make a good and harmonious environment in the organization which is depended or rely on trust.
Goleman also had founded that providing the members reward, standard can also help them to
motivate and can drive the team work at higher success. Along with this, Zara company will not
have a negative and false environment at their organization from which an individual working
their can feel comfortable and can stay for a longer time. This style requires an artificial
intelligence to understand the people need, desire and their behaviour at majorly. If Zara push
this style without having trust on people and just do this for show off then obviously a company
will not able to obtain the better outcome and may possible that people will start distrust and
become uncomfortable at the place (Moon, 2021). Without being fake providing them and
behaving with a genuine feeling will provide a better result in the company. For example : Zara
is focusing on the team members and providing them all the beneficial and comfort services
along with the reward and incentives, it is might possible that a person will stay at the company
for long-term period and will provide a better result in its journey. In previous studies also, it has
been mentioned that affiliate leadership style has plays a vital role in many organizations resulted
them with very effective and best outcome along with higher development and success. ZARA
should also implement this style so that they can also achieve higher growth and development in
the market.
Corporate Social Responsibilities of ZARA
The corporate social responsibility is a self-made model in a business which aid a company to be
socially accountable to the public and stakeholders. It is am model where company made an
effort and concern to enhance the society and environment. The organization named ZARA

committed to sustain the developments of the society and surroundings. At their stores, ZARA
has putted the efforts in making the store efficient and save a lot of care. They are developing the
efficient model for their stores and managing the all designs and production including lighting or
cooling system by recycling the furniture and decoration equipments. Zara has reduces the waste
of the manufacturing and starts the recycling (Hunt, and Fitzgerald, 2018). For example : Zara
has recycled the hanger and tags of their stores which is explaining the waste management.
Along with this, a company also utilizes the cloth and paper bags to serve the products to the
consumer and avoid using the plastic bags which harms the environment. Biodegradable plastic
bags are made of paper, and they decompose through natural bioecological process which
prevents the environment pollution caused by plastic. Zara also uses the ecological agriculture
and use organic cotton on the production of the clothing items. They provide the 100% cotton
fabric which do not harm the surroundings and complete free from pesticides chemical agents
and bleaches. The ZARA also focus on the production of footwear by non petroleum derivatives
utilizes in the footwear equipments. ZARA is a very responsible and aware of the corporate
social responsibilities and developing their organization without harming the environment and
surroundings (Alam, 2017). Apart from this, the company also follows the animal welfare policy
and do not use the animal skin to make leather jackets or shoes and do not dangered the love of
the animal creature. The organization is appropriately following all the rules and regulation
according to the CSR and providing the healthy and good environment around the people or an
individual. These CSR activities will lead an organization to develop more and provide a higher
success in the clothing retail industry.

CONCLUSION
In this report it has been concluded that ZARA company can be able to develop itself at higher
position with the different business strategies. The report has performed the different area where
the company can build themselves and gain the competitive advantage. It includes the swot and
pestle analysis of ZARA company from which an individual can understand their power and
ability with a differentiation of another company. Along with this, it has been recommanded that
Goleman leadership style should be applied and follow by the organization to keep and maintain
their growth and development. At last, the CSR has been performed which is providing an
understanding that how CSR can influence the business or an organization. Accordingly, ZARA
can obtain and generate their best achievements by following and focusing this business
strategies which has been mention in this report and ensures that it will be very effectual in the
future existence.

REFERENCES
Books and Journals
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