Business Environment and Ethical practice

1. BUSINESS
ENVIRONMENT
AND ETHICAL
PRACTICES
SWOTANALYSIS OF ZARA
Submitted to – Mr. Vivek Verma,
Assistant Professor- Management
Submitted by- Danish
Chandra
Roll no.- 06117703521

2.  Founded in 1975 byAmanico Ortega and Rosalia Mera
 Zara is Spanish clothing and accessories retailer based inArtexio, Galicia
 It is the flagship chain store of the Inditex group, the world’s largest
apparel retailer.
 Zara is renowned for its ability to develop a new product and get it to
stores within two weeks, while other retailers take six months .
 Chairman :- Pablo isla
PROFILE OF THE COMPANY

3. “GIVE CUSTOMES WHAT THEY WANT , AND GET
IT TO THEM FASTER THAN ANYONE”

4. Conceptual framework
 SWOT is an acronym for strengths, weaknesses, opportunities and threats. By definition , strengths (S) and weaknesses (w)
are considered to be internal factors over which you have some measure of control.Also by definition, opportunities (O)
and threats (T) are considered to be external factors over which you have essentially no control.
 ASWOT analysis is a technique used to determine and define your strengths , weaknesses, opportunities , and threats.
 SWOT analysis is a framework used to evaluate a company’s position and to develop strategic planning .
 It assesses internal and external factors, as well as current and future potential .
 SWOT analysis was first used to analyse business. Now , its often used by governments, non profits and individuals,
including investors and entrepreneurs. There is seemingly limitless applications to the SWOT analysis
SWOT
ANALYSIS

5. T H E SW O T A N A L Y SI S O F
Z A R A

6. ZARA’S STRENGHTS
 FASHIONABLEAND STYLISH CLOTHING : -
Zara makes a wide variety of superior quality clothes for all ages, including casual wear, business wear, and even some
formal outfits. One of the main goals of Zara is to create trendy and distinct clothing for everyone, and it is able to
accomplish this thought through the skills of its team of designers who understand the need of the market very well.
 BRAND VALUTION : -
According to Forbes, Zara is the 53rd biggest company in design and business, and this is largely due to its brand valuation .
Zara has been consistently profitable and growing since it was founded. In recent years Zara has achieved success and
continuous consistency in products has given a boost to the company’s profits.
 VISUALMERCHANDISING : -
Zara is spending much on visual merchandising, lot of effort in creating an aesthetically enticing image in all its stores.
From the lighting and layout to the mannequin displays, decorations, Zara understands that all these elements play a role in
luring customers in to make a purchase.

7.  HIGH-END PRODUCT : -
Zara creates high end fashion with stylish products and reasonable prices. The brand does not want to develop low –
end fashion because they want to stay on the top end of the market .
They focus on developing their reputation and style and therefore do not aim to create an image of being cheap. Their
target customers are also educated and aware of the latest fashions.
 AFFORDABLE PRICES :-
People all over the world like the fact that Zara sells affordable clothes at low price. They are not the only retailer to
offer low prices. However, there is more competition at lower prices than at higher ones. This makes it easier for
customers to find what they want without paying too much.
7

8. WEAKNESSES
 LACK OF PRODUCT INFORMATION :-
The lack of product information on the site can be a weakness because it might mean that Zara doesn’t have the details about a
particular item that customers need to know before they buy. This might make it harder for the customer to make informed buying
decisions.
 MINIMALPUBLICITYANDADVERTISING :-
The Zara SWOT analysis indicates the company does not have much public or media attention, which can be problematic for
the brand. This leaves the market with no information about what’s coming from the company, making people think that Zara has
little to offer. The brand needs more publicity to grow and reach consumers worldwide. Hence, Zara needs to change its marketing
strategies if they want to increase the number of clients and its profits.
 UNDER DEVELOPED LOGISTICS NETWORK:-
Zara’s products are shipped directly from the manufacturer to the store. Since this is a low-cost, high-volume operation, there are
no logistic chains built-in to help ensure quality control. This means that if something goes wrong with a product, there is no place
for them to get it fixed or repackaged. If there are problems with their manufacturing or distribution processes, these issues can be
carried forward until the next season.

9. OPPORTUNITIES
 GENERATINGATRADEMARK DESIGN:-
One of the biggest opportunities in the Zara SWOT analysis is generating a trademark design. Designs created
by Zara can be easily copyrighted, as they are often unique and original. By doing so, Zara can prevent other
companies from copying their creations, which would help to protect their brand identity. It can also help them
to negotiate better terms with suppliers.
 INCREASING ITS ONLINE EFFECT: -
Zara should continue to increase its online presence to reach a larger audience. By selling its products online, the
company can tap into new markets and reach customers who might not otherwise have access to its products.
Additionally, online sales can help Zara SWOT analysis to reduce its environmental impact by reducing the need
to transport products to physical stores.
 DEVELOPING NEW SUSTAINABILITYINITIATIVE :-
Zara should continue to develop new sustainability initiatives to reduce its environmental impact. The company
has already made progress in this area, but there is always room for improvement. Some possible initiatives
include using more sustainable materials, reducing energy consumption, and increasing recycling and reuse.

10. Rapid delivery cycle :-
One of the opportunities that Zara has is its rapid delivery cycle. This enables them to get new styles into their stores quickly,
which helps to keep customers coming back. They have a network of over 4,000 suppliers in more than 60 countries, which gives
them the ability to respond quickly to trends.
Vertically integrated:-
Another opportunity for Zara is that they are vertically integrated as per Zara SWOT analysis. This means they control every
step of the manufacturing process, from design to production to distribution. This allows them to respond quickly to customer
demand and keep costs low.

11. THREATS
 SATURATED INDUSTRY, MORE COMPETITION: -
Zara competes against a wide range of established global brands. There are
many ways for consumers to shop: online, catalogues, brick-and-mortar stores,
department stores, and even specialty stores. Because there are so many places
where consumers can buy what they want, there is not just one way for Zara to
succeed. Zara has seen an increase in competitors and competition from fast
fashion companies. Some of these include H&M, Forever 21, and Inditex. They
all operate in the same market as Zara. Because of this, Zara may find it
difficult to increase sales.
Additionally, Zara must keep up with the latest trends to stay competitive.

12.  IMITATIONS:-
Because Zara caters to the trendiest markets and keeps up with the latest fashion
trends, the competition is always trying to emulate Zara’s business model and
target these same markets. This can be particularly challenging when new
competition tries to copy Zara’s success.
 INEFFECTIVE EXPENSE MANAGEMENT: -
Zara often pays too much for merchandise and does not manage those costs
effectively. This can be costly for the company. Also, Zara spends less than 1% of
its revenue on employee benefits, which is something we can see in the Zara
SWOT analysis. If they raised their expenses, they’d have to increase prices.
They could also lose customers if they raised their prices too high. So this is a
very weak point for Zara.

13. • Saturated industry,
more competition
• Imitations
• Ineffective expense
management
• Generating trademark
design
• Increasing its online
effect
• Rapid delivery cycle
Lack of product
information
Minimal publicity
Under developed
logistics network
• Fashionable and stylish
clothing
• Brand valuation
• Visual merchandising
• High end product
• Affordable prices
STRENGHTS WEAKNESSES
THREATS
OPPORTUNI
TIES

14. H&M UNIQLO GAP FOREVER 21
ASOS
COMPETITOR ANALYSIS

15. HENNES
AND
MAURITZ
AB
• Huge
discount
•
• Advertising
• Targeting
customers
• Product
distribution
UNIQLO
• Target
customers
• Quality of
product
• Casual
stylish basis
•
• More
Affordable
GAP
• Delivery of
product at
stores
• Dependent
industry
• Unable to
attract
younger
generation
FOREVER
21
• Lower prices
than Zara
• Quality of
clothing
• Unorganised
stores
• E commerce
difference
AS
SEEN
ON
SCREEN
• Lower in
quality and
price
• Dual
business
strategy
• Two –
pronged
marketing
startegy

16. SUGGESTIONS
• Active wear
• Interactive fitting rooms
• Bringing strategies in southAfrican
market
• Advertisement

17. CO N CLUSIO N

18. • Zara has successfully established itself as a very reputable brand in the fashion industry. One of the secrets to its
continued and growing success is that it regularly evaluates its strategies and performance.
• In the Zara SWOT analysis that we have done above, we have revealed that although it does have numerous strengths
that keep Zara in the lead pack in the fashion industry, like its ground-breaking production process and its unique
marketing scheme, this clothing company also has weaknesses that it can improve on, like the absence of facilities
for local production in its different countries of operation. Likewise, it can also take advantage of opportunities like
the vast global market waiting to be tapped and create workable plans to deal with impending threats like the
growing competition and recovering from the pandemic.

19. THANK YOU
QUESTION PLEASE