Company’s overview
Zara is a leading global retailer of outfits and accessories with many stores around the world. Amancio Ortega founded the retail company in the year 1975. Its headquarters is in Galicia, Spain. Currently, the company has more than 1,600 stores in 77 nations. It is alleged that the company can design and produce a new product and deliver it to its numerous stores in a period of one week. The company launches more than 12, 000 new products in the global market annually.
Mission statement
The company’s mission declaration states as follows: “We strive to improve our products and to advance shopping awareness and necessity. Through this we seek to provide our clients with new and economical merchandises manufactured by means of quality resources that embrace current patterns.”
Vision
The company’s vision statement states as follows: “To offer our customers what they require at the quickest time possible.”
Objectives
The company’s goals are as follows:
- To increase customers’ interest and accomplishment by offering them the prospect to get familiar with first-hand extraordinary designer clothes on a weekly basis.
- To expand its presence in urban centres globally
- To increase retail stores from the start of the year 2016 by 80%
- To enhance the general customer experience
PESTEL analysis
Political
The headquarters of Zara is in Galicia, Spain. The company’s home country is an autonomous state and a portion of the EU. Spain is known for being a nation where decrees and legal autonomy are observed, and government stability is not a threat. However, recently the country reported an acute decline in law obedience and political environment. In this regard, the company should review the current political changes. Through this, it will be ready for any possible political changes. Similarly, the company will be able to abide by any changes in rules and regulations.
Economical
With respect to economic analysis, Spain is among the top 15 richest global economies. The country is rated as one of the top developed nations. Zara’s fashion industry is ranked second best after the American fashion industry. Despite the above benefits to the industry, it should be noted that the country has imposed heavy duties on the import and export industries. Through this, the overall cost of production in the country is not competitive. Therefore, the company should note that the cost of production resulting from such levies might affect their global competitiveness.
Social
Compared with other western societies, the Spanish culture is distinctive. As such, family units are essential parts of Spanish life. In this regard, any changes within and outside the family groups are likely to impact on the business mood. In this respect, the company should note that changes in social patterns of Spaniards might have enormous effects on their interest for Zara’s accessories. Therefore, the company should be aware of the changes to make any adjustments required to increase or maintain their sales.
Technological
Ever since Spain joined the EU in the year 1986, its state-of-the-art and scientific frameworks have been demonstrated in the whole of Europe. Currently, consumers in Spain are embracing e-commerce. Internet penetration has increased tremendously in the last decade enabling more users to engage in electronic commerce. Therefore, Zara should ensure that they benefit the most from these advancements in technology. They should utilize advanced technology in their production. Advanced technology should also be used in interaction with global clients.
Environmental
With respect to environmental effects, it should be noted that Spain has more than 8,000 plant species. Forest cover represents about 30% of the country’s land mass. Therefore, in its effort to enhance social responsibility, the company should try to help in environmental conservation. They should also ensure that they embrace eco-friendly technologies in their production.
Legal
Spain is one of the countries that have tried to limit legal duties to encourage business within its borders. Its laws offer embraces criminal procedural standards. Despite its efforts to enhance fairness in business, counterfeit in the apparel industry is still considered a major problem. Before launching any new products in the market, the company should consider the above issue. As such, the company should find ways of ensuring that their products are not counterfeited.
PESTLE – summary
Zara is a leading global retailer of outfits and accessories with numerous stores globally. Based on its PESTLE analysis, it is apparent that Spain’s market setting favours Zara. Compared with other western societies, the Spanish culture is distinctive. As such, family units are essential parts of Spanish life. The country also embraces fashions. In this regard, there are greater opportunities for the company to explore. The country and Europe’s population and per capita are increasing progressively. The above imply that consumer spending is expected to rise steadily in the future. For that reason, Zara should be ready to exploit such opportunities in the future.
Technological advancements like e-commerce also offer the company opportunities to reach global consumers. Hence, Zara should ensure that they benefit the most from these advancements in technology. Nevertheless, the risk of counterfeit is a fundamental problem, which the company must address to maintain their product lines exclusively.
Blue ocean strategy
The Blue Ocean Strategy system is aimed at helping business enhance their abilities in coming up with plans. The system is designed to assure that creative practices in the apparel sector are implemented in hierarchical attitude and processes. Based on the above analysis, the company’s blue ocean strategy is “Fast Eats Slow Fish.” The policy sums up Zara’s competitive strategies. The company’s point sentence is “Fast Fashion.”
Zara is striving to come up with its manufacturing plants. Similarly, the company aims to establish its and logistics frameworks. The above will enable the business to handle clients’ needs with ease, react to market requests with ease, and to offer customers with reasonably quick fashion. The company’s format of the blue ocean strategy is distinctive. In the unsteady corporate sector setting, competition and variations in basis of attentive accomplishment depend on business to market records and varying customer needs. In such a competitive condition, the business emphasis of this system is not the association’s objects or business structure. Instead, the focus is on the capability to respond to customer behaviour.
The company is a client-oriented organisation. Its outlets distinguish themselves from those of competitors by being perfect because of its blue ocean strategy. The other pattern that distinguishes the company from its competitors is exhibited by the manner through which it undertakes its promotions. Compared to its opponents who use 3% to 4% of the promotion money on printing, the company spends only 0.3% of advertising money.