Substitution across the whole industry is extremely high, as individual consumers can choose alternative providers for their fashion needs. Social Factors The social factors that seem to impinge on fashion industry are the spending habits of potential customer that are elastic to the economic stability.
The company has to make sure the coverage of all legal obligations while maintaining the operating costs and making profits. However, although it is not necessary, at a low level, to invest large amounts of capital, the issue of economies of scale is playing an increasingly important role, with consumers constantly demanding cheaper prices.
Customers now have wide access to a broad range of retailers, with internet purchases extending this even further.
This is reflected in the fact that the global average of visits per year per customer is 17 in Zara, as opposed to a general average of Zara pestel, across other similar organisations Bigelow, Furthermore, cost pressures are also being placed on the organisation, which requires the design team to become more efficient when creating designs that can be turned into garments, at the lowest possible cost, without sacrificing ethical standings.
Fortunately, it did not hit Zara as much since the company has a global presence; hence, the capability to curb losses or slow profits is significant Inditex, This deregulation of the textile industry, from a quota point of view, has encouraged greater price competition which has, to a large extent, permeated through the large organisations such as Zara, which are able to enjoy economies of scale, when it comes to large-scale production Lopez and Fan, Several other competitors within the market have suffered negative press, due to the use of suppliers associated with unethical practices.
Zara has achieved a position within the market that encourages individuals to look towards the brand as a means of gaining cutting-edge fashion, at a low cost, and the design of these products is therefore critical, if this position is to be maintained.
This presents Zara with a real opportunity to set itself apart from other low-cost retailers, by developing a specific ethical strategy that will enable it to retain a relatively low cost, but also allow it to sell itself as an ethical producer Okumus A greater focus also needs to be placed on the team that is responsible for producing the designs which will ultimately make it onto the high street.
Furthermore, it has been identified that the ability to bring new products to the market, on a regular basis, encourages greater consumer acceptance and willingness to purchase cutting-edge fashion design. This report will go on to analyse the external and internal environment within which the organisation operates, before going on to look at crises that have been faced by the company, and to produce a strategic analysis of the company, drawing on all of the above information.
Moreover, the organization has introduced a category where people could share their photos where they are wearing the products bought from Zara.
Since Zara has a global existence, the management must take in to account the political situation of countries in order to avoid unnecessary closures of their business in that particular country the organization plans to enter.
Therefore, this reduced timeframe for bringing new designs onto the market is a real strength of the organisation and keeps the ideas fresh in its stores, to such an extent that consumers will be regularly revisiting and restocking their fashion items.
However, there are weaknesses associated with the internal operations of the company. One of the key reasons that Zara has managed to achieve this success is down to its efficient supply chain, which is critical to the current demands of the fashion industry at to meet consumers demand regular updates of products and new and innovative fashion, on a regular basis.
This gives government assurance of the organizations commitment to produce environment friendly products.
As noted in the case study, customers will tend to visit Zara stores considerably more frequently than competitor stores, due to the fact that new products are continuously being launched.
PESTLE Analysis Politically, there has been a general opening of the market, with textiles now being readily available and not subject to quotas. In this context, consumers are reducing the amount of expenditure on items such as clothing and, in particular, fashion items, thus putting pressure on retailers to provide cutting edge fashion at a budget price, something which Zara has become particularly good at and is using this to gain success during difficult economic times.
Zara is a big brand that has a vertical integration system, where the company owns different factories, transport system and their own outlets.
Economic Factors Organizations should take in to consideration the economic growth thoroughly so that the decision makers have adequate knowledge about the inflation rates. Zara not only has access to product designers that enable it to produce desirable high-street fashion, at low prices, but it Zara pestel has a strong supply chain in place which enables it to Zara pestel new products to the shop floor, within a time frame which is four months quicker than its competitors can achieve.
Over the years, Zara has become one of the largest and best known retail brands, on a global scale. Firstly, when looking at the threat of entry, it can be seen that there are relatively no entry barriers for those looking to enter the industry.
Drawing on the four forces above, it can be argued that, finally, there is a large amount of competitive rivalry within the industry the fifth and final force. Despite this, it is important that the organisation recognises the forces that are impacting on the external market and uses its own internal strengths to ensure that it retains a competitive advantage, thus enabling it to maintain its position within the market, as one of the brand leaders.
An International Journal, Vol. Related Executive Summary Zara is an international fashion retailer which has gained considerable acclaim, being one of the leaders of the high-street fashion industry, and regularly producing new products for the market, at a rate that is quicker than its competitors can achieve, due to the strong supply chain in place.
This has made shopping with Zara more interactive and has bonded the customer emotionally with the brand Inditex, For instance it is of great interest for Zara to the population levels as it will aid in deciding that which population should be focused on in terms of producing clothes.Zara is a big brand that has a vertical integration system, where the company owns different factories, transport system and their own outlets.
It is very important. ZARA Case Study- PESTLE - SWOT Analysis 1. CASE STUDY - ZARA - PESTLE 2. Profileof Zara Zara is a Spain-based clothing and accessories retailer founded by husband- wife duo Amancio Ortega and Rosalia Mera under the umbrella of Inditex Group. The following SWOT Analysis shows Zaras, strengths, weaknesses, opportunities and threats importing the brand in Albania.
Strengths Zara is a. Free Essay: Key Elements Which Will Determine Zara’s Profit Growth in the Next Three To Five Years Introduction Zara is a Spanish company that starts its. ‘Fashion is the imitation of a given example and satisfies the demand for social adaptation The more an article becomes subject to rapid changes of fashion, the greater the demand for cheap products of its.
A PESTEL Analysis of ZARA. Zara’s popularity has kept growing during the past few years. It is one of the most known names in the world of fast fashion known for excellent designs and affordable prices.Download