Innovation and Sustainable Organisation: Zara Case Study and Analysis

This report delves into the intersection of innovation and sustainability within the context of business organizations, with a specific focus on Zara. The report begins by establishing the significance of innovation and sustainability for long-term market viability, referencing the Brundtland Report and its emphasis on technology, business strategies, and sustainability. It explores how technological advancements have positively impacted businesses, enabling them to target a wider customer base and improve resource management. The report then examines Zara's business model, highlighting its fast fashion approach, global presence, and financial performance. It analyzes Zara's sustainability initiatives, including its 'Leading the Change' strategy, use of renewable energy, and commitment to supply chain transparency. The report also discusses the importance of sustainable economic growth, considering factors like economic growth, social inclusion, and environmental security, as outlined in the 2030 agenda for sustainable development. Furthermore, the report provides insights into the circular economy, highlighting its role in extending product life cycles and reducing environmental impact. The report also provides a comparison between Zara and H&M, in terms of their sustainability initiatives, and concludes by emphasizing the importance of sustainability in the fashion industry.

Innovation and The Sustainable
Organisation

Table of Contents
PART A...........................................................................................................................................1
Section #1....................................................................................................................................1
PART B............................................................................................................................................2
Section #2....................................................................................................................................2
Section #3....................................................................................................................................3
Section#4 ....................................................................................................................................5
Section #5 ...................................................................................................................................5
Section 6#....................................................................................................................................8
Section 7#....................................................................................................................................8
Appendix..........................................................................................................................................8
1. The Case of Energy................................................................................................................8
2. The Case of Waste and Limits of Growth...............................................................................9
3. Clean and Green Innovation: Closing the Loop......................................................................9
4. The case of Zero Emission Vehicles (ZEV)...........................................................................9
5. Business Model Innovation for Sustainability......................................................................10
6. Critiquing a Sustainability Report.........................................................................................10
REFERENCES..............................................................................................................................11

PART A
Section #1
Innovation and sustainability are the two main factors which, an organisation looks
forward to have in order to sustain within the market for a longer period of time (Fellnhofer,
2017). I have found that, there is a report named as Brundtland, which was developed by World
Commission of Environment and Development. It stated that business organisations that are
looking forward to expand its business has kept its focus upon a range of elements which
includes technology, business strategies, sustainability and many other approaches. I also
realised that, report has also given the information that in past, since technology was not that
effective enough, it impacted upon business as well. In this concern, now I can say that
technological sector has developed itself or evolved which has helped companies in targeting
much more customers. This has directly impacted positively upon various factors like
bargaining, availability of the resources, values and way of thinking as well. It can be said by me
is that, in order to improvise the sustainability, it is much more vital for companies to expand
business and this could be done through conducting a range of techniques like research and
development, analysing the business environment, competitors analysis and through using a
range of methods like porter's five forces model. I assume that using these tools and techniques, a
company can sustain within the complex business market for a longer period of time. Away with
this, it is being found by me that customer's behaviour gets changes on a regular basis, and this is
why it becomes much more vital for companies to focus upon those changes in order to gain
competitive advantages. Failure into this, may lead organisations to face a range of issues
regarding the subject. Changes could be done through two different techniques and these are
innovation and invention as well. I consider innovation as best suitable approach, which
organisations can grab or adopt in order to improve sustainability to attain a good position in
specified time frame.
On the other hand, I found that circular economy basically carries a business model
which majorly consist with product. The product that an organisation chooses has a much more
longer life cycle. I examined that once the product had reached its end of life to be reintegrated
in the making process of a new product.
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On the other hand, considering a range of researches, I can say that population of the
world is rapidly increasing and this has given ample number of opportunities for the company
but it is is also impacting negative upon availability of resources. I can say that, both of the
things like circular economy along with the strategies of a business company would require to
make alterations as per the needs of business environment. This will directly aid in reaching to
new heights in specified time frame and I can also assure that, resources
PART B
Section #2
A famous international fast fashion brand performing business in ZARA and offering
customers with trendy clothing products and different range of customer services, Company was
found in the year of 1975 by Amancio Ortega and Rosalía Merafashion. Parental company of
ZARA i.e. Inditex group which is being considered as one of the largest apparel retailer in all
over the world. Along with this, ZARA basically focuses on offering customers with 20 new
clothing collections per year. At the moment, ZARA is having more than 10,000 physical stores
in all over the world which is helping them in expanding business at international level.
In the year of 2018, ZARA'S net sales reached to the amount of 22.17 Billion Pounds
Sterling. Along with this, if it is talked about net profit, then than company has made
approximately to 3.4. On the other hand, Cash flow that organisation has is approximately to 4.4
which could be considered as one of the strongest point within in the clothing sector. Along with
this, 7,475 stores in all over the world including 171,839 staff members working in all over the
world (ANNUAL REPORT 2017, 2018). Including this, it can be said that since business
organisation is looking forward to expand the business with a mission and vision to become a
leading brand within the fast retail fashion industry.
Along with this, considering the sustainability report of ZARA is showing and what other
business organisation within the same industry has developed that, Everyone single individual
looks for a good deal, but this is the section where cost factor comes in front. It can be said that,
companies like ZARA, H&M and many other rivals within the clothing industry has adopted
different range of strategies in order to enhance their own profit margins (Bag and Anand, 2016).
Considering 100% Leading the Change strategy, ZARA basically looking forward to building up
recycled approach amongst public. Values which exactly, ZARA has followed and is sharing
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with others using renewable energy, with the help of different new and updated technologies.
This has helped organisation in building up a much more stronger circular business economy for
themselves.
On the other hand, it can be said that ZARA, would directly grab a good position in the
market through improving sustainability considering transparency of supply chain and rewarding
sustainable actions. Away with this, ZARA has also adopted transparency as well in all of its
departments. This helped them in building trust, enhanced values among customers and it also
reduced risks factors as well like high employee turnover ratios.
Section #3
If it is thought about, sustainable economic growth, than companies are required to focus
upon different range of needs of people. Along with this, in order to improve all over
productivity growth and reductions of poverty in poor regions, people needs to get access to
finances, buy assets and make investments. Along with this, it is being analysed that there are
three different factors which are required to be e considered at the time of focusing upon
sustainable economic growth and these are economic growth, social inclusion and environmental
security. Based on the report given on the 2030 agenda for sustainable development which show
that all the three factors which has been discussed above needs to be properly outlined within the
development goals of sustainability. All this took place in the UN committee and the decisions
were taken by its leaders regarding the same.
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As mentioned in the European parliament, circular economy could be considered as one of the
crucial method that helps in understanding the life cycle of a crucial product which is required to
be e extended rather than losing it forgetting this post in your future. In simple words, it can be
said that product life cycle never gets and because of the modifications the technology E has
given as an opportunity for the business organisations. This has directly e affected the
sustainability as well of the companies in a positive manner (Kuhl and et. al., 2016).
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Considering the above model which is showing that it can give benefit to both
consumers and employer because a product is being recycled or modified as per the requirements
of customers and this impacts positively upon their satisfaction level. This runnable approach if
you still eyes by Business organisations like Zara then it can easily be said that the company
would sustain for a longer longer period of time. In near future, sustainable energy or the
renewable energy will be the two factors that will lead organisations to the new Heights.
Considering the the circular economy, company would directly e reduce all the emission of
pollution, reduction of misuse of raw materials and many more other things (Larsson, 2018).
Section#4
As given by Severo, Dorion and Guimarães, (2017), if an organisation is looking forward to
implement circular economy, then it will be e necessary for the company to focus upon all the
changes that are going to be made in the near future, and the existing as well. On the other hand,
it will also be required for Zara members or staff members to look into competitors position,
their Strategies and perform research as well on a regular basis on the customer demands with
the help of this it can easily be said that Zara will grab a good position in the near future and
meet all the requirements of customers which is related to Lifestyle and behaviour.
In present context, Consumers could be considered as one of the most crucial and vital
stakeholder for Zara because, organisation has given them a perception of the value that human
must learn the recycle approach as it will help them in using the product into different ways
which will directly impact positively upon life cycle of the premium product which has been
chosen by Zara in regards to use circular economy (Severo, de Guimarães and Dorion, 2017).
Section #5
If it is talked about Brundtland Commission, Then it can be considered as a strong. For the
companies that are looking forward to sustain with the market for a longer period of time
because without considering the future and Organisation can sustain with the help of using
different resources rather than keeping them for the near future (Blowfield ,2013), this my
majorly contain arrange of macro environmental factors from economical, political, social,
ethical andmany other elements. It can be said that there are ample number of reasons why
organisations are looking forward to use them because to complete the Desire and the needs of
customers that they have in present time. In the same way other organisations like H&M, 3-
spirit and many other are using the same approach in order to meet their own requirements
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considering the requirements of customers. In this context a small all differentiation is being
done underneath among Zara and H&M. Considering the reports of both of the organisations it
can be said that there is a rise has been found from 35 to 57% which was made in the year of
2018. Out of hundred there are only 63% of the companies has adopted recycling systems in
order to to recycle and reuse all the clothes and other things in order to produce new ones with an
elevator approach (Geissdoerfer, Vladimirova and Evans, 2018).
Zara, in return had made a more developed presentation on their evolution towards
sustainability of their own products, as it presents in their Inditex Group Consolidated Annual
Accounts as at 31 January 2019. According to this, in 2018 company had seen an increase of
284.71% in the number of garments made out of recycled materials, having a less impact on
environment due to use of less water, natural resources and energy used in their creating process.
In addition, Zara has a well established waste and recycling system (mainly paper and cardboard,
wood, plastic, metal and textile remnants) so 88.09% of their Group waste had been forwarded
towards recycling and use again in 2018 (Jorna, 2017).
(Sources : Push for Sustainability in Fast Fashion, 2016)
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Illustration 1: Push for Sustainability in Fast Fashion

Considering the above graph, it can easily be said that fashion industry where
companies like Zara, H&M, has kept their focus on sustainability rather than focusing upon
short term goals this has let them to become much more influential for the customers and for
the staff members as well of these companies considering both inclusion and Diversity factor
(Tukker and et. al., 2017).
Section 6#
It was the year of 1987 when the Brundtland Report was specifically came in front in all over
the world and from then business organisations like Zara and many more has kept their focus
upon sustainability rather than looking on small targets. This let them to achieve all the negative
impacts to make them positive ones (Zarei, Mohammadian and Ghasemi, 2016). In order to
reach to a whole new level Zara wood required to come up with good strategies light offering
staff members with arrange of training programs. And this is all being done through Range of
campaigns Which Zara has developed in order to gain competitive advantages like stronger
sustainability through using innovative approaches.
Section 7#
Considering the analysis which has been done above for Visa, it can easily be concluded that
organisations sustainability has became stronger and stronger due to the strategies company has
developed in regards to the customers considering both Innovation and the sustainability factor.
Since it is a fast fashion business organisation, Zara wood required to make alterations as per the
requirements of the customers and this is being done through different range of theories and
techniques like 100% circular and renewable strategy, 100% leading the change, and many
more other techniques. Parental company of Zara, is invited is already performing well within
the challenging business market and this has helped Zara as well to become unknown brand in all
over the world in a short span. This has helped Zara in grabbing a good position in the whole
world within fast fashion industry (Geissdoerfer, Savaget and Evans, 2017).
Appendix
1. The Case of Energy
According to the modern days technology is very advanced in an effective manner so that
people uses lot of unique technologies in order to run their business effectively. With the help of
this, people can boost their energy level which enhance their working efficiency in an effective
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manner. In the case of Zara they are always use kind of process by this people do not get any
harm in a effective way. So that it create the good culture within the environment. Therefore,
every people have knowledge about the several harmful guesses like CO2 etc. which can affect
them so that they should follow good environment. That's why changes are must necessary part
of every human life in order to bring attractive and effective environment in a proper way.
Through this concept Zara also can adopt different technologies in order to make people happy.
This will increase the energy level of people and reduce the errors in an appropriate manner.
2. The Case of Waste and Limits of Growth
In the current period of time the growth of population has very much large impact on the
different kind of resources this is because if consumer will be increase than supply of product
can be reduced so that every company should have lot of resources in order to maintain their
organisation growth in an effective way. For example this can be said that if any country has
wide population then there are should be broad accordingly. That's why country also follow
number of places in which farmers can develop their business effectively. Because as population
is increasing day by day so it influence the green house and climates negatively. For this country
should apply effective tools and techniques in order to safe peoples life effectively. Therefore,
according to the country population much place should be there and this is possible by adopting
new techniques in an effective manner. This makes effective development of people and they can
easily survive in the country without any issues in the environment.
3. Clean and Green Innovation: Closing the Loop
There are many issues that are associated for representing waste. But clean and green
innovation is the most common issue that is related in this week case represented by case.
Consumers do not realise the processes by which products suffer while reaching to us in a long
run. There are some products like technological products which require a lot of components.
Some of these are rare and some of these are shaped through a long process such as plastic bags.
All of these need other resources which are scarce such as energy, fossils, water, etc. It is
important for the consumers to know about recycling because this will reduce the negative
impact of consumerism. The organisation produces new products and re-use the old products at
the same time.
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4. The case of Zero Emission Vehicles (ZEV)
Nowadays several companies are investing in cars that are operated on energy stocked in
batteries because investment in car industry becomes easier at every level. Cars represents one
of the commodities by which human aspire as a self satisfaction demand. The cities have become
more saturated by them and this has increased the exhausts and polluting air. This results in more
people are diagnosed with asthma and many other respiratory illness. The energy operated
vehicles are generally considered as green. These are not hundred percent green because they
are used by energy that is provided by burning of fossils. A further research is conducted for
hundred percent green vehicles that these work on hydrogen fuels. This technology is not easily
available because the cost of production is very high. Due to it's expensive cost, every individual
cannot afford it.
5. Business Model Innovation for Sustainability
Considering the information, it can be said that sustainability cannot be attained but in
order to survive a company would required to keep on making alterations and it is also required
for them to develop strategies using collaborative Business models and other techniques. With
the help of this and Organisation can sustain for a long period of time. In present context it is
been found that renewable resources could be considered as the best option for companies to
meet needs and demands of the customers through reducing the wastages without compromising
with the quality. Along with this, it is also required for Business organisations to focus upon
building up promotional activities regarding brand awareness and to promote their products or
services among customers. This activity could help business organisations in reaching to new
Heights considering the sustainability factor as well because without that a company cannot
sustain for a longer time frame.
6. Critiquing a Sustainability Report
If it is talked about availability of the information of the data linked with consumers then
it can be said that business organisations has built themselves nearby to them because then only e
a company can sustain within the competitive business market for a longer period of time. With
the help of this, a company could expand its business and run the operations for decades. this
could be understood with an example where a company like Zara which was found in the year of
1975 and since then the company has earned a good image within the present market and it has
helped them in taking decisions regarding brand awareness. Along with this, it has been found
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that Customers demands gets changes rapidly which impacts negatively upon profit margins as
well for a short period of time. If a company fails to adopt the changes as per the requirements
of customers then it is possible that company might get forfieted in the short span.
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