Zara is a Spanish fashion brand mainly dealing in the sell of clothes and accessories in many countries. Various macro factors affect the growth of Zara such as high Spain's fast-growing economic environment, increased consumer demand to shop online, among others and using a Pestle and swot analysis, we explain how these factors have affected the growth of Zara.
Peyton Mariam (2019) "Pestle and Swot Analysis of Zara 2018" 123 Writing [Online] at https://www.123writing.com/sample/pestle-and-swot-analysis-of-zara-2018
Zara Strategy Case Study
Key Learning Outcomes
- Understand the broad macro-environment of Zara and the global clothing retailing industry in terms of political, economic, social, technological, environmental and legal factors (PESTEL).
- Use our swot analysis example to gain an overall understanding of Zaras strengths and weaknesses and strategic options arising from the opportunities and threats that have been identified from the analysis of the business environment.
- To apply strategy business models and frameworks such as Pestle, Swot etc to real company cases.
Analyse the macro environment of Zara and clothing retail industry using pestle and the impact of external factors followed by Zara Swot Analysis.
Zara, founded in 1975 by Amancio Ortega and Rosalia Mera is a Spanish fashion (clothes and accessories) retailer based in Galicia, Spain (Forbes 2017). It’s one of eight child brands of Inditex company which is one of the world’s largest fashion retailers according to Inditex.com. It has a global market share of 1% with major competitors Nike, H & M and adidas having 2.8%, 1.4% and 1.8% market shares respectively (Statista 2018). According to its 2017 financial report, its profit margin and revenue (turnover) increased from 6.15% to 8.95% and from $1,740,345tn to $1,853,434tn respectively from 2016 to 2017.
1.0 Zara Pestle Analysis 2018
1.1 Political factors
The free trade agreements in Europe have helped boost Zara UK sales and its overall group sales. With Europe’s free trade agreements, goods can move freely between European countries with no border tariffs, no restrictions on quality or quantity of imported or exported products and a common custom tariff for goods imported or exported to other countries. The European Union being UK’s biggest export market for textiles and clothing accounts for 74% of its exports hence Zara can reach more customers in more European countries without extra border tariffs which has boosted its sales (Geoghegan 2017).
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