Pestle Analysis Of Zara

1902 words - 8 pages


Sources of Competitive Advantage

Assessment 1

Group Presentation

PESTEL – Analysis



1 Introduction 3

2 Overview 3

3 Business Environment 3

4 Political 4

5 Economic 4

6 Social 5

7 Technological 6

8 Environmental 6

9 Legislative 8

10 Conclusion 8

References 9


The global apparel market is a consumer-driven industry. Also, globalization and new technologies have allowed consumers to have more access to fashion. As a result, consumers are changing, competition is fierce, and companies are evolving to meet these demands. Zara, a Spanish-based chain owned by Inditex, is a retailer who has taken a new ...view middle of the document...

Main competitors: H&M, Gap and Benetton (Ghemawat & Nueno, 2006)

Dynamic and innovative sector (Nordas, 2005)

High quality fashion market vs. lower quality products (Nordas, 2005)

Production in Europe vs. Production in low cost (Nordas, 2005)



The key pull factors that explain the internationalisation of Zara include Spain’s entry into the European Union in 1986, the globalisation of the economy and thus potential economies of scale, the homogenisation of consumption patterns across countries – Zara’s belief is that “national frontiers are no impediment to sharing a single fashion culture” – and the abolition of barriers to export as well as the development of information technology (Lopez & Fan, 2009).

Indian Market:

India provided open market for Zara as Indian government is willingly to provide foreign investment in their country, but Indian Govt. Has their own policy which are to be adhered by organizations as Zara formed joint venture with TATA (Shah, 2011).


Production NOT transferred to low cost locations

Zara resisted the industry-wide trend towards transferring fast fashion production to low cost countries like for example China. Zara states that this gives the greater control as it controls most of its steps on the Supply Chain, designing, manufacturing and distributing of products (CNN, 2001). In the UK 50% of the product Zara sells are manufactured in Spain, 26% in the rest of Europe and 24% in Asian and African countries → clothes with longer shelf life like for example basic t-shirts are outsourced to low cost suppliers mainly in Asia and Turkey (Business Week, 2006).

Zero Advertising Policy

The most unusual company policy is its’ no advertising policy. It is worth noticing that Zara competitors rely heavily on costly advertising campaigns. However, Zara prefers to invest money in opening new stores instead (CNN, 2001).

Producer of about 11 000 items annually

The product range of Zara company is significant. It produces nearly 11 000 items annually whilst its competitors produce only about 2000 – 4000. Moreover, Zara changes its designs every 2 weeks which encourages customers to repeated visits and builds the brand loyalty. An average high street store in Spain expects customers to visit three times a year. It is 17 times for Zara. (The Guardian, 2002).

Shortening Product Life Cycle

Additionally, Zara needs just 2 weeks to design a new product and get it to the stores whilst industry average is 6 months (Business Week, 2006).

To sum up, Zara breaks all the rules but this strategy proves to be successful as Zara is one of the biggest retailers in the industry.



Rising of income

With the rising of disposable personal income, people began to pursue a high quality and comfortable life. This tendency provides Zara quite wide market share. Personalized consumption become the mainstream...

Other Papers Like Pestle Analysis of Zara

Pestle Analysis of Hilton Hotel

614 words - 3 pages Hilton Hotels PESTEL Analysis PESTEL abbreviation is interpreted as political, economic, social, technological, legal, and environmental factors impacting businesses, and PESTEL is an important framework for assessing external factor impacting business practices. POLITICAL FACTORS Political stability is the key to the success of any industries and it is applicable to hotel industry as well and it needs to cope with political situations

Marketing Strategy Essay

2215 words - 9 pages studies of marketing strategy. By analyzing and discussing the case of Zara, we will be able to have a more in depth analysis of companies and their marketing strategies. In the background section, basic knowledge of marketing strategy will be introduced. In the discussion section, an analysis of Zara’s existing product and service will be listed and an S.W.O.T. analysis is done to figure out the company’s current situation and position in the

The Strategy of Zara

2144 words - 9 pages . Procedure and Findings……………………………………………………………7 2.1 SWOT Analysis……………………………………………………………….7 2.2 4Ps Analyze …………………………………………………………………10 3. Conclusions………………………………………………………………………12 References……………………………………………………………………………13 1.0 Introduction 1.1 Purpose As a fast fashion of the global retail market, ZARA is a famous and successful case in the international market. To prove Zara has the prospect of sustainable

Zara, Success Story

908 words - 4 pages Assignment “ZARA” 1.Zara designs majority of it cloth in Spain (about 80 percent). It focuses on shorter response time enabling it to meet the constantly shifting fashion trends. However such moves do not take months, but this process is complete within in 30 days; during which Zara identifies the latest trends, design it clothes and supply material to its


932 words - 4 pages Sukkur IBA | Case Analysis – ZARA | Strategic Marketing Management | | Bashir Ahmed NarejoFazul-ur-Rahman NarejoHamid Ali ShaikhRakesh Kumar DodejaShair Zaman BhuttoTariq Ali Soomro | | | ZARA – Brief introduction Zara started its journey in second half of 1980s. Having its headquarters in Arteixo, Zara is a subsidiary of Grupo Inditex which actually serves in the selling of clothing, footwear, and accessories for women, men

Zara Customer Survey Analysis Report

1627 words - 7 pages season well in advance and then held in distribution facilities until periodic shipment to stores. * Thus, Zara has a competitive advantage especially in the area of product development ZARA CUSTOMER SATISFACTION ANALYSIS What we did in the project: COLLECTED SECONDARY DATA We collected secondary data for the reference of further analysis using following modes: * Desk Research * Online Journals * Collected reports

ZARA: Fast Fashion

4518 words - 19 pages Group 14:Suo Lu 7430327Sourav Rahman 7354338Syed Ammar Qaiser 7593115Imran Afza Khan 7116907Muhammad Mohsin Virk 7591000Qasim Qayyum 7587417EMP 5100Introduction to Engineering Management1I. Executive SummaryInditex, founded by Amancio Ortega, operates six different chains: Zara, Massimo Dutti, Pull&Bear, Bershka, Stradivarius, and Oysho. Each chain addressed different segments of the market, but all share the same goal: to dominate their

Zara Supply Chain Strategy Case

1831 words - 8 pages Case 1: Zara, H&M, Benetton Supply Chain Strategies | Executive Summary The performance of many organizations is highly dependent on utilizing the correct supply chain model. This report focuses on the analysis of the supply chains of three clothing companies: Zara, Hennes & Mauritz (H&M), and Benetton. The analysis was focused on three aspects. First, the supply chain models of the three retailers were compared and contrasted

Zara Fashion

3795 words - 16 pages weekly, unlike most of the competitors weekly schedule. Key Success Factors: ❑ Market Research ❑ Ready raw material base ❑ Multi-functional quick decision making ❑ Vertical integration to ensure control over supply chain, and proximity ❑ Technology ❑ Cost Control, despite flexibility ❑ Technology and Infrastructure SWOT Analysis 2013 on ZARA Strengths 1. They have about 74

Csr and Its Importatnce in Your Business

852 words - 4 pages Report Israel Country Profile. May2014, p14-48. 35p. Abstract: The article presents an analysis of the political, economic, social, technological, legal and environmental (PESTLE) structure in Israel, explored on four parameters, such as current strengths, current challenges, future prospects and future risks. Topics covered include the nature of coalition politics in Israel which caused regular ideological conflicts, the risk of a mortgage

Zara & H&M

2271 words - 10 pages Table of Content 1. Executive Summary 2. Introduction & History of Zara 3. Introduction & History of H&M 4. Products Offered By Zara & H&M 5. Marketing and Communication Strategy of Zara 6. Marketing and Communication Strategy of H& M 7. SWOT Analysis: Zara 8. SWOT Analysis: H&M 9. Conclusion Executive Summary This report will examine and make comparison of the communication

Related Essays

Pestle Analysis Of Nokia

1047 words - 5 pages Introduction After conducting a Porter's 5 forces model on Nokia, I felt a PESTLE analysis would analyse the macro environment of Nokia. These are all the external forces that are out of Nokias' control but have a significant effect on how the company operates and the strategic decision they make. This model looks at the Political, Economical, Social, Technological, Legal and Environmental factors relating to Nokia and the industry they operate

The Analysis Of Zara

4708 words - 19 pages within the marketing environment of ZARA. 1 1.1 Introduction of marketing environment 2 1.2 Macroenvironment-----PESTLE analysis of ZARA 2 1.3 Microenvironment analysis of ZARA 4 1.4 Poter’s three generic strategies on ZARA 4 1.5 SWOT analysis of ZARA 5 2 The importance of market research,marketing mix and service innovation for Zara 6 2.1 The importance of market research for ZARA 6 2.2 The importance of Marketing mix

Comparative Analysis Of Zara And Topshop

544 words - 3 pages Study Proposal A comparative case analysis of Zara and Topshop Company I. Rationale As of the present, fashion industry market is growing and booming with the presence of low cost fashion companies such as Zara and Topshop. These kinds of companies have the possibility to dominate the industry of today and in the future and the situation for competition in the fashion industry can be set on high demand on such products and services

Pestle Analysis Of Italy

1529 words - 7 pages PETRODOLLARS AND ASIAN DOLLAR Introduction: A petrodollar is a United States dollar earned by a country through the sale of its petroleum to another country. The term was coined in 1973 by Georgetown University economics professor, Ibrahim Oweiss, who recognized the need for a term that could describe the dollar receiving by petroleum exporting countries (OPEC) in exchange for oil. The term, petrodollar, should not be confused with