Evaluating the Business Environmental Management System of ZARA
To assess the organizations environmental managemental system regarding internal and external condition of environmental resource management, it is very essential tools to use SWOT analysis and PESTLE analysis.
PESTLE analysis of ZARA (Business Environmental Management System of ZARA)
To get a clear understanding about an organization in response to its internal and external factors, the use of PESTEL analysis is widely accepted. PESTEL analysis is combined with six factors and they are political, economic, social, technological, legal, environmental factors. ZARA is a retail company operating its business by offering clothes and other accessories for men, women and children in UK. So, the implication of PESTLE analysis for ZARA will be the demonstration of its different environmental factors affecting to business operation (Achinas, Horjus, Achinas and Euverink, 2019).
| Political | There are some important factors included while considering political factors for business environment analysis. The activities and functional responsibilities of government bodies and the action of opposition parties have huge influence on business operation, likewise it was always preferred to have a political stability for confirming a smooth business operation in s state. Here, the role of government is highly focused. All these factors have huge influence on business of an organizations. In response to these influential factors under environmental resource management, UK have the stable political environment and that is a great advantage for ZARA to operate the business smoothly and ZARA also doing the business by following the government rules and regulations properly. |
| Economic | There are some important economic indicators included while considering economic factors for business environment analysis. All these indicators represent the economic summary of a country. Economic factors like inflation has great impact on purchasing power of buyers and money supply. Likewise, there are some other factors like GDP and per capita income provides the total economic summary. So, the aspect of government monetary policy, fiscal policy, tax policy, and trade policy all these things are influential to the growth of retail business operations of ZARA in UK. In recent times, there is an impact of BREXIT in the business operation of ZARA as they need to purchase material at high price. Now days, corona virus is also slowing down the business of ZARA as so many orders are pending. |
| Social | Social customs, social values, social norms, social beliefs, traditions and lifestyle of a society are considered as social factors. All these factors have huge influence on business of an organizations under environmental resource management because customers are the important part of this society for which business are operated. ZARA as retail fashion business, they are concerned about the change of lifestyle and they are serving the society by keeping all these factors in their business operation and making significant change based on customer needs and choices. |
| Technological | Technology has a great impact on business operation and it is also very important to cope up with the changes of technologies. Adopting a new technology for business growth and positive changes is also important. As ZARA is a renowned fashion retail business, from product design to product distribution, they need to comply with technology. ZARA is utilizing the prospect of technological innovation under environmental resource management for its business growth and serve the customer a better product. |
| Legal | There are some standard code of conduct, legal affairs, business rules and regulations under legal factors. All these things are monitored and controlled by government authority for providing a fair business filed to all business operators. ZARA is strongly committed to follow those co of conduct and no violation of legal affairs imposed by the local government. |
| Environmental | The protection of natural environment from business pollution is important. ZARA has a good recycling plan and waste management department who are committed environment safety and no business pollution. |
SWOT Analysis of ZARA (Business Environmental Management System of ZARA)
To assess the internal and external environment if a business, SWOT analysis is widely accepted to choose. In SWOT analysis, it is analyzed the strengths, weaknesses, opportunities and threats of a business (Pandi, 2020). Here, the implication of SWOT analysis for ZARA will be the demonstration of its internal and external factors related to business operation.
Strengths
- ZARA has unique designs with elegant and superior quality of fabrics men, women and Kids
- ZARA has strong presence across the globe. With more than 2100 stores worldwide and it is expanding its business.
- ZARA has strong brand value and it is ranked number 53 and is valued at 10.7 Billion dollars by Forbes.
- ZARA has superb supply chain which is fully active for ensuring trendiest store in latest fashion.
- ZARA has good push strategy to visit its customer in the store to check out the latest designs.
- Zara is capable for launching so many new designs (approximately 1000) every year
- Zara is god in applying low cost and higher profits strategy for its latest product design and fantastic collection in stores
- ZARA has very good physical evidence of the stores as it has wide and deep store layout (Bhasin, 2019).
Weakness
- Zara has generalised collection but it has no specialise product like shirts, pants, or party wear, therefore a good number of customer switch to other company.
- ZARA has lack of advertising that’s why it cannot capture new customers easily.
- ZARA gas low safety stock but product of ZARA is fast moving. So, if it has low inventory, then it will not be possible to reach its potential customer (Bhasin, 2019).
Opportunities
- ZARA is fully active on Online Ecommerce to take advantage of the online selling of clothes available e-store.
- Zara has the common traits of backing some flagship designs which has huge demand in market for these designs and building a brand identity also.
- ZARA has a growing market potential as it popularity is increasing in clothing industry and efficient to capitalize the growing market potential.
- Zara is best so far to provide better and stylish clothing at premium quality and prices whereas it is able to fog or market expansion though the competition is too high in this industry (Bhasin, 2019).
Threats
- Due to its low advertising it will be becoming difficult for ZARA to each its customer at right time with latest product design as there are so many competitors are focusing on extensive marketing.
- There is always a threat of competition for Zara in this clothing industry.
- Due to Brexit issue and now Corona Virus issue, Costs of raw materials is increasing that makes the cost of production increases, even the business is slowing down, customers are not interested to buy product in this tough situation (Bhasin, 2019).
References
Achinas, S., Horjus, J., Achinas, V. and Euverink, G., 2019. A PESTLE Analysis of Biofuels Energy Industry in Europe. Sustainability, 11(21), p.5981.
Bhasin, H., 2019. SWOT analysis of Zara – Zara SWOT analysis. [Online]
Available at: https://www.marketing91.com/swot-analysis-zara/
[Accessed 29 04 2020].
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