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Organization Strategies Essay

561 words - 3 pages

Zara’s Organization Strategies. Its Macro and Micro Environments

Zara’s Organization Strategies. Its Macro and Micro Environments
As any business firm that conducts its activity in contemporary world, Zara is comprised of interrelated parts and substructures that are integrated and intertwined with the outside world – the external environment. Since the connection and interdependence here is pretty strong, the environment affects the organization with a wide range of influences - political, economic, social, technological, legal, and environmental, which, in their turn, are the components of Zara’s business environment.
Political environment
The most important thing of a political environment Zara operates in is fiscal policies of the governments of the countries Zara’s stores are situated in. Pursuing their objectives, governments can levy taxes that make conducting a business unprofitable in this political system, or, for example, ...view middle of the document...

Size of market, demand and supply trends, inflation rate in the economy, national income, per capita income, efficiency of public and private sectors and many other factors influence Zara’s performance in a particular economy and directly influence its profitability. Moreover, since an economic system of a country determines “rules, goals and incentives that controls economic relations among people in a society”, this factor influences Zara’s desire or even ability to perform in a particular economy.
Social environment
As nowadays it is very important for some people to follow the latest fashion fads and trends, the philosophy of Zara lies in giving an immediate response to its customers’ wishes. Zara's designers track consumer preferences on a year-round basis and place orders with both internal and external designers, aiming to produce the most stylish and therefore most time-sensitive items. Focusing on the ultimate consumer, Zara “places more emphasis on using backward vertical integration to be a very quick fashion follower than to achieve manufacturing efficiencies”. Because of such approach towards orientation on the customer, Zara is believed to need only two weeks in order to develop a new product and get it to stores versus a six-month period that is average for the apparel industry.
Technological environment
Talking about apparel industry Zara operates in and technological environment there, it can be said that during last 40forty years only minor changes had been made to the process of garment production. New types of clothes are constantly been developed, however technologies remain practically the same as they were several decades ago.
Legal environment
As any business, Zara operates within a strict framework of law, which influences different aspects of the company. Governmental laws regulate “the status of the organization, its relationship with customers and suppliers and certain internal procedures and activities”, influencing the behavior of Zara on the market and specific market conditions.

Amanda Craig, Charlese Jones and Martha Nieto (2004). ZARA: Fashion Follower, Industry Leader. Case Study
Worthington, I, & Britton, C. (2009). Business environment. Financial Times Prentice Hall

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