Introduction Of The Organization: Zara, Pestle Analysis (Other (Not Listed) Sample)

Introduction of the Organization:
A Spanish clothing brand since 1975 founded by Rosalia Mera and Ortega Gaona is one of the most famous selling brands worldwide. The 86 countries are having more than 1500 stores all over the world selling trendy men, women clothes and accessories. It is one of the most profitable businesses from Inditex SA having unique value proposition goal.
The ZARA came up with the mission of developing sustainable society through their business model and envisions the continuous innovation of business through new designs and providing quality to their customers.
As a profitable business throughout they have focused on a strategy of providing innovation in clothing with reasonable prices but changing trend and fashion. This goal has given them an opportunity to provide frequent good quality and trendy clothing and products than its competitors. Adam, P (2013)
External environment analysis:
The external environment of ZARA can be critically analyze through PESTLE analysis model. The PESTLE analysis can give clear understanding of the factors that influence the business strategies.
PESTLE Analysis: the PESTLE analysis comprising of the six components given:
Political:
The government policies and intervention through economic affairs in the business has a great impact on the overall business model and no model can be develop without taking insight the political situation of the countries the business is based in. For its parent country where the business originate ZARA will less likely face any controversies and it has fair chance of growth in the European Union for expansion of its business due to stable political situation of the countries while establishing new outlets in third world countries and countries in warzone are more challenging to ZARA.
Economic:
As long ZARA is using stable currency that is pound/Euro and not Dollar the business remained unaffected in the current recession and drop of Dollar. But it could be challenge in future if ZARA is dealing in the local economy of the countries where it has franchised outlets other than European countries.
Social:
ZARA a brand in a Spain would have the local adoptability and acceptability but in the global context the designs and acceptance for international product is a challenge which needs to be strategized.
Technological:
The new technology in manufacturing has been developed and adopted by competitors around ZARA in the market but ZARA has focused on eco friendly technology and by dividing the task of manufacturing in systematic tasks.
Legal:
The country support industrial businesses which favor the ZARA growth and its expansion in market.
Environmental Issues:
Across the boundaries expansion needs market insight studies, modification according to local market and strategies to cop the challenges of global markets like its competitors should be its strategy. Keller, A. A. (2012
Porter’s 5 Forces:
The feasibility and quality of industry can be analyzed through five forces of business to evaluate its weight in market. The Porter’s five force analysis of ZARA is given as:
* Buyers Power: As long the ZARA is providing innovative products the influx of the buyers will converge towards it. But having a strong market completion buyers force is moderately strong on ZARA.
* Rivalry: one of the quality which can keep it ahead of its rivals is uniqueness of its products.
* Substitutes: Good substitutes in the market are might costly or of poor quality which is giving an edge to ZARA over competitors.
* New entrants: Currently the ZARA along with few more like H&M and Gap are contemporary and the new entrant have to be cost effective with innovative with technology to beat the existing brands.
* Suppliers: ZARA has all the licenses to deal with supplier which is not a pressure for the business at preset and near future. David, F. (2013)
Strategic Capabilities Analysis:
The distinctive capabilities of ZARA as unique brand involves the organizational resources of market oriented strategies, staff education, eco friendly strategies, production strategies and value chain improvement. By preferring the customers need ZARA has always make loyal customers and have reached their demands like big brands. Keeping in view its customer services ZARA has prioritized the staff training to educate its staff. In an aware society of Europe it has adopted a policy of eco-friendly production and like every big industry it has won the customers trust for environment protection. With its research in innovating new designs and around two weeks time of producing new designs value chain which is unique than any of its competitors has earned it the customers loyalty and product value. Web (2016)
SWOT Analysis:
Given table shows the SWOT analysis for ZARA: Zara’s Fashion 2013
Strengths:

Weaknesses:

Opportunities:

Threats:

Competitive Generic Strategies:
According to porters the generic strategies involve the cost leadership, differentiation and segmentation, on the base of which the ZARA business strategies analysis has been given:
Segmentation strategy: Although ZARA has divided its whole range of products into men, women and children but has ignored extensive segmentation of the product in the specific segment of women according to the age group. It is one of the lacking in the business strategy of big global brand.
Cost leadership: ZARA is offering products at low prices than other competitors but many researchers have discussed them as lacking the strategies of cost effective productive and need leadership in cost management for their products worldwide.
Differentiation: Variation in trend on daily basis is a trend mark of ZARA as it changes its fashion according to day-to-day need. But to stay in market it has to differentiate its product in international market and countries outside Europe.
ZARA has followed two more strategies in its business which has given boost to the business, increased sales and minimized production cost. The strategy of outsourcing and assembly has reduced the manufacturing time and cost but it has made it completely dependent on its supplier. The strategy of eco-friendly production has increased its sales by getting the LEED (leadership in Energy and Environmental design) certificate from Inditex.
Other strategies giving an edge over its worldwide competitors involve the quick and timely service delivery, taking constant feedback from customer, staying in touch with customers, addressing their needs in short term goals and providing long term stylish products. Keller, A. A. (2012
Evaluation of Strategies:
ZARA has planned remarkable strategies and seems giving an edge over competitors worldwide at present but the strategies and possible choices which ZARA has adopted are not clear for future growth and day-to-day changing market and technology advent. The best option to evaluate the business strategies of ZARA its sustainability, acceptability and feasibility should be evaluated which will give clear insight of the product future positioning.
The SAFe analysis:
Sustainability: The ZARA has adopted a business model of Inditex which has kept the Clients on top followed by stores, design and then production. So where in business model the top level is client or customer the production will adjusted according to customer demand in turn giving a brand long market life and value.
Some other strategies which has fair chances of sustainability adopted by ZARA are the centralized distribution for keeping quality of the product, international expansion for brand recognition and business growth. The international expansion is done through joint ventures, franchising and owned companies which has spread in 86 countries with more than 1500 stores now opened worldwide. Adam, P (2013)
Acceptability: The acceptability of brand can be analyzed by its current outlets worldwide. The key markets of ZARA is present in five continents of Europe, America, Africa, Asia Pacific and Asia. Here is data of the current lead market space occupied by ZARA as brand worldwide:
* 452 Stores in Spain
* 165 Stores in China
* 128 Stores in France
* 102 Stores in Italy
* 95 Stores in Japan
The 88 countries with above 1500 Stores worldwide clearly shows its acceptability aming customer and market.
Moreover the Inditex policies are shareholders friendly which has been adopted by the ZARA business model attracting more shareholder and trusted partners. Keller, A. A. (2012
Feasibility: The manufacturing, organizational and financial feasibility is very much visible in this case.
For technology and manufacturing it has focused on outsourcing cutting down the manufacturing time and technological heck but it has increased its dependency on suppliers. The organizational structure along with staff training has been prioritized and ZARA has the most competitive staff also ZARA has strategy of training staff on regular basis. The financial feasibility is visible as it has chosen its currency as Euro and not dollar which is more likely stable as compared to dollar and also the manufacturing costs has been replaced by assembly strategy to speed up innovation.
Optimum Strategy:
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