Business Environment Analysis: A Detailed SWOT and PEST on Zara

This report provides a detailed analysis of Zara's business environment using the SWOT and PEST frameworks. The SWOT analysis identifies Zara's strengths in design and quality, weaknesses in advertising, opportunities for market expansion, and threats from competitors. The PEST analysis examine...Read More

Business Environment
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Table of Contents
INTRODUCTION.......................................................................................................................3
MAIN BODY.............................................................................................................................3
SWOT Analysis of ZARA-.....................................................................................................................3
PEST analysis of ZARA-(provide definition with reference).................................................................4
CONCLUSION...........................................................................................................................5
REFERENCES............................................................................................................................7
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INTRODUCTION
Sum total of all internal and external factors that influence a business is known as
business environment. Zara is a Spanish brand which deals in fashion such as clothing,
shoes, beauty and perfumes. It is the world's largest retailer. The report highlights
SWOT analysis and PEST Analysis Of ZARA.
MAIN BODY
SWOT Analysis of ZARA-
SWOT Analysis is a framework so that company can identify the factors such as how
much threat they are facing from there competitors. How can they improve in the area
where they are lacking and there strong point with their weak points. (Phadermrod,
Crowder and Wills, 2019.)
Strength-
 Zara is known for their designs. That is why the company get repeated sales
from the same customer.
 People prefer Zara because of their superior quality, their elegant styling and
their finishing. They deal in many varieties of clothing such as casuals, party
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wear, formals and that too for kids, men women and everyone. (Chekh and
Vinnyk, 2017)
Weakness-
 Company does not spend on advertising if they start it they can spread
awareness in the market and increase their profits.
 Company thinks on following the strategy of cost advantage but if they advertise
some of their collection it will help the company to attract more and more
customers and increase the word of mouth for the company.
Opportunities-
 Zara has scope to expand their business in different markets.
 The reason behind this they will establish their business in different markets.
 The company is targeting their market where spending power of people is high
and spend on a brand like Zara so that the company can earn up to their
potential.
Threats-
 Reach of Zara is very less as they sell their products only through their exclusive
stores.
 Company must consider to tie up with other stores so that they can increase their
sales.
 Company want to increase its volume then they have to imply this option
otherwise their competitors will eat their share.
Conclusion of SWOT analysis-
This SWOT analysis has helped to highlight the strength and weaknesses of the
company with opportunities and threats. So that they can take appropriate measures to
improve there portfolio.
PEST analysis of ZARA-
This tool is used by the companies so that they can discover the factors which can
affect the company in near future. (Ochoa, Peñaloza and Casseres, 2018)
Political Factors- It is concerned with the factors such as intervention of the
government in the economy.(Wan, Shen and Choi, 2017)
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Every country has different limitations or drawbacks which affects the operations of the
company who offer their services in various countries. It also results in downfall of the
economy. That is why Zara has a found a way to remove this factor by reducing the
operations of their supply chain so that they can reduce the intervention that
government does in a business. (Saleem, 2017.)
Economical Factors-This factor is concerned with the growth in the economy, rate of
inflation and changes or accuracy of interest rates.(Benjamin, 2018)
This factor tells the spending power of the people in the selected country. It is a crucial
reason but Zara has removed this factor as a problem as they have categorized their
brand as a semi premium brand and when the economic factors of a country is not good
and who prefers to buy luxury clothes they will shift on to Zara.
Social Factors-This factor includes issues such as distribution according to age, their
culture, rate of growth in population and safety. (Bright, 2017.)
Zara always conduct a research before considering to enter into a new market. To
understand the culture of different market is necessary so that the company can know
that if or not they can match their culture or not. After conducting the research Zara
make different products for different countries according to their culture. The company
does not believe in trying out for experiments that is why they conduct a preliminary
research. (Breckova, 2016)
Technological Factors- - These factors are concerned with the change in technology,
research and development and aspects related to automation (Mullakhmetov, 2018.)
Without the help of these factors no company can record the data analytic factor which
is necessary if they want to cope up with market trends and satisfy the consumer. Zara
has used these aspects so that they can increase their profit. Some time ago they also
came in a collaboration with Toyota so that they can use their process of Just in time to
increase their productivity with less time on other resources.
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CONCLUSION
From the above studies it has been concluded that Zara make different products
according to different countries. Zara make their designs so well and that is what has
helped them to gain repeated sales from the same customer.
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REFERENCES
Books and Journal
Breckova, P., 2016. Family Business in the Czech Republic. European Research Studies,
19(4), p.3.
Chekh, N. and Vinnyk, I., 2017. Regulatory environment of business activities in Ukraine.
Innovative Technologies and Scientific Solutions for Industries. (1 (1)). pp.124-
129.
Saleem, M.A., 2017. The impact of socio-economic factors on small business success.
Geografia-Malaysian Journal of society and space. 8(1).
Ochoa, G.V., Peñaloza, C.A. and Casseres, D.M., 2018. PEST Analysis of a Rankine
Organic Cycle for Energy Recovery. International Journal of Applied
Engineering Research, 13(15), pp.11755-11760.
Wan, C., Shen, G.Q. and Choi, S., 2017. A review on political factors influencing public
support for urban environmental policy. Environmental Science & Policy, 75,
pp.70-80.
Benjamin, B., 2018. Social and economic factors affecting mortality (Vol. 5). Walter de
Gruyter GmbH & Co KG.
Bright, W., 2017. Social factors in language change. The handbook of sociolinguistics,
pp.81-91.
Mullakhmetov, K., 2018. Technological Factors and Management Transformation in Social
and Economic Systems. European Research Studies Journal, 21(3), pp.230-
241.
Phadermrod, B., Crowder, R.M. and Wills, G.B., 2019. Importance-performance analysis
based SWOT analysis. International Journal of Information Management, 44,
pp.194-203.
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