Pestle Zara
Pestle Analysis of Zara
SOE11108
Sources of Competitive Advantage
Assessment 1
Group Presentation
PESTEL – Analysis
[pic]
Contents
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
Introduction
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 approach in the industry. With their unique strategy, Zara has the competitive advantage to be sustainable. In order to maintain that advantage and growth they must confront certain challenges and face traditional retailers in the apparel industry. So, now our group will analysis the PESTLE of Zara Company. (Lopez & Fan, 2009)
Overview
Zara is one of the largest international fashion companies and belongs to Inditex, which is one of the largest fashion retailers worldwide. Inditex operates in textile design, distribution and manufacturing. (Inditex, 2011 b)
Zara operates in 78 countries worldwide with 1557 stores in the world’s largest cities. (Inditex, 2011 c)
The company is founded in 1975 by Amancio Ortega, located in Spain and had in 2010 a net sale of 8.088 million of euro. (Inditex, 2011 a)
The have worldwide 1557 stores in 78 different countries. (Inditex, 2011 a)
Aim: democratize fashion, offering latest fashion, medium quality and moderate price (Lopez & Fan, 2009)
Structure: customer oriented, satisfaction of consumer needs (Mazaira, González, & Avendano, 2003)
Business Environment
Global textile and clothing industry (Lopez & Fan, 2009) with 900 billion Euro in 200 worldwide (Ghemawat & Nueno, 2006).
Main competitors: H&M, Gap and Benetton (Ghemawat
SOE11108
Sources of Competitive Advantage
Assessment 1
Group Presentation
PESTEL – Analysis
[pic]
Contents
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
Introduction
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 approach in the industry. With their unique strategy, Zara has the competitive advantage to be sustainable. In order to maintain that advantage and growth they must confront certain challenges and face traditional retailers in the apparel industry. So, now our group will analysis the PESTLE of Zara Company. (Lopez & Fan, 2009)
Overview
Zara is one of the largest international fashion companies and belongs to Inditex, which is one of the largest fashion retailers worldwide. Inditex operates in textile design, distribution and manufacturing. (Inditex, 2011 b)
Zara operates in 78 countries worldwide with 1557 stores in the world’s largest cities. (Inditex, 2011 c)
The company is founded in 1975 by Amancio Ortega, located in Spain and had in 2010 a net sale of 8.088 million of euro. (Inditex, 2011 a)
The have worldwide 1557 stores in 78 different countries. (Inditex, 2011 a)
Aim: democratize fashion, offering latest fashion, medium quality and moderate price (Lopez & Fan, 2009)
Structure: customer oriented, satisfaction of consumer needs (Mazaira, González, & Avendano, 2003)
Business Environment
Global textile and clothing industry (Lopez & Fan, 2009) with 900 billion Euro in 200 worldwide (Ghemawat & Nueno, 2006).
Main competitors: H&M, Gap and Benetton (Ghemawat
References: The company is founded in 1975 by Amancio Ortega, located in Spain and had in 2010 a net sale of 8.088 million of euro. (Inditex, 2011 a) The have worldwide 1557 stores in 78 different countries Aim: democratize fashion, offering latest fashion, medium quality and moderate price (Lopez & Fan, 2009) Structure: customer oriented, satisfaction of consumer needs (Mazaira, González, & Avendano, 2003) Business Environment Global textile and clothing industry (Lopez & Fan, 2009) with 900 billion Euro in 200 worldwide (Ghemawat & Nueno, 2006). 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 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). 1. Fast production: Deliver within 6 weeks instead of 6 months which is the delivery time from Zara’s competitors (Ghemawat & Nueno, 2006). 2. The shops receive two deliveries from distribution centre. That allows the shops to have low inventory and a high turnaround within the shop (Lopez & Fan, 2009) (Ghemawat & Nueno, 2006). 2. Zara has very short lead times. The Agility of their supply chain enables Zara to deliver from product design to sale within 2 weaks for repeat or 5 weeks for new products (Mazaira, González, & Avendano, 2003).