Marketing Strategy Of Zara Company: PESTLE Analysis And Environmental Issues

Description of Company

Discuss about the Marketing Strategy of Zara Company.

With the increasing ramified economic changes, each and every organization needs to take proper strategic decisions to run the business effectively. Each and every organization is affected by several internal and external factors which need to be undertaking by management before implementing the effective strategic decisions making. There are several strategic tools which could be used to assess the internal and external business factors before implementing the effective strategic decision making. There are several internal and external factors have been analyzed which assists in grabbing more potential market.  In this report, PESTLE analysis have been undertaken to identify the political, social, environment, technological, legal and economic factors of Zara Company. after that environmental issues of the company has been analyzed to determine whether Zara Company has good potential in the market or not.

It is Spain based clothing and accessories Retailer Company founded by Duo Amancio Ortego and Rosalia Mera under the umbrella of Inditex Group. Zara Company has opened up more than 1700 stores. Zara Company has been indulged in selling clothes and modern designs that public needs at affordable price to attract wide range of clients on international level. Fashion director Louis Vuittond has been described it as one of the most devasting retailer in the world (Zara Company. (2017)

It is the one of the most popular tool that helps to analyse external factors affecting the organization. PESLTE is ideally used when manager attempt to identify factors pose as threat to Zara Company or opportunity which company could use to climb the ladder of success path.  However, in order to analyse these all external factors, the below give table have been used (Zara Company. (2017).

With the changes in time, there are several environmental issues which have been faced by Zara Company while running its business. There are several factors which are included in climate change, pollution, environmental degradation, depletion of resources and other resources. Zara Company has been running its business on international level therefore, management needs to undertake proper strategic program to undertake proper strategic decisions to expand its business (Shen, et al., 2012). However, Zara Company has hired expert persons in its KMP department who takes all the imperative strategic decisions to run the business effectively.  It is analyzed that Zara Company has to comply with the several environmental programs and policies to strengthen the business work program.  It is analyzed that on international level, fashion brands and big companies indulged in the fashion business have produced high amount of pollution, dirt and hazardous substance which may negatively impact the environment at large (Lopez, and Fan, 2009). It is considered that Zara Company has already set up several Eco-System and development program to save the environment from all kind of negative impacts in environment. In Spain, government has mandatory for the companies to set up the eco-system to lower down the negative impact of their business activities on the society and environment. It is further observed that there are several environmental damages such as water pollution, dirt and emergences of hazardous substance, contaminated waste, and air pollution. These all substances not only negatively impact the environment but also lower down the outcomes of the organization at large. It is analyzed that other toxic chemicals used by the organizations indulged in fashion cloths manufacturing include sodium hydroxide (caustic soda), and sulphuric acid which are also very hazardous for the environment at large. The management decisions taken by the key managerial persons of Zara need to analyses all these factors and its impact on the society and environment at large. The corporate social responsibilities and activities plans have also been operated by Zara to meet the environmental regulatory requirement.  Managers are the person who takes all the imperative decision for the betterment of the organization. However, if they undertake all the environmental issues and problems then they will have to restrict their independent decisions by undertaking environmental issues as well (McCornick, Awulachew, and Abebe, 2008). For instance, the management of Zara in the recent case were about to use viscose stuff in its clothing fabrics which might be negative for the human body if they wear these clothes for long run as viscose stuff  is made of several hazardous substance such as sodium hydroxide (caustic soda), and sulphuric acid.  It is analyzed that if these factors are analyzed it is found that management had to restrict the use of viscose stuff in its clothing products (Kozlowski, Bardecki, and Searcy, 2012).  However, it had impacted the quality of is fashion clothes but have resulted to saving human from the body infection and other aching issues.  As per the management decisions taken by Zara, it was found that the key managerial person of company in the best interest of environment had taken initiative to make their stores more green and opened up several first flagship stores of their kind. They have committed that all the Zara Stores opened up will use 30% less energy and 50% less water to operate these stores (Frostenson, Helin, and Sandström, 2011).  However, it is fact that major of its fashion stores might face issue of pollution. There is another example of the environmental friendly work program such as H&M’s recycling program, or Forever 21 building the largest solar powered system in LA which has also strengthens its working program and work effectiveness in determined approach. These all the initiatives taken by the management of Zara focuses on the reduction of the negative impact of its business operiatons on the environment. These environmental issues have also influenced the management decision and business policies of Zara on domestic and international level. The recent online dashboard mechanism started by the Zara has shown the initiative to reduce the pollution and environmental friendly practice (Jang, et al. 2012). This practice will allow clients to directly connect with Zara fashion wardrobe for their shopping. It will not only save their time but also reduce the pollution spreading in the environment. The greenhouse work program undertaken by the Zara is the big initiative for supporting the environment rather than just evolving more environmentally friendly business practice. The management policies prepared by the management department of Zara have been designed to make its fashion outlets more eco-friendly to consumers on their surface. Nonetheless, in the management decisions, it is considered that the green work program undertaken by company is the right initiative in itself which is vital for reducing the negative impact of its business operations on the environment.

PESTLE analysis

The management decision of the Zara Company has been highly influenced by the greenhouse gas emission program and environmental issue program which are given have been divulged as below (Klaas Jagersma, 2008).

Zara Company has promoted use of fibers in its manufacturing factories and stores which would be more energy efficient. It will not only save the energy but also lowe down the complexity of its business.

It is analyzed that Zara Company has pioneered commercialization of the recycled textiles that would be used at par with the quality of new minerals. It will lower down the wastage of the resources and increase the efficiency of the manufacturing chain of the Zara as well (Li, et al. 2014).

With the scarcity of the resources, management department needs to bifurcate the potential work functions in its stores which will be used to strengthen the business outcomes. It has set  up the proper work chain and internal control system to lower down the complexity of business to create synergy in its business (De Brito, Carbone, and Blanquart, 2008).

The boards of directors have established the collaboration with the various other organizations to share and adopt best business practice in energy management (Kwan, Yeung,. and Au, 2013).

Zara has also invested 2 % of five year average net profit in Sustainable Development Goals (SDGs) put forth by the UN for the betterment of the environment and society at large (Moro, Mendes, and Neto, 2015).

The latest packaging policies undertaken by Zara on international level have also changed to green to pack program leverage which makes the packing thinner to make more loading onto one shipment. It will not only require less shipment but also lower down the hazardous gas emission and fuel pollution (Vu, and Medina, 2014). 

There is another investment made by Zara in the closing loop which makes effect on the up cycling initiative with a focus on the circular economic and lower down the negative impact on the environment at large (Lai, Wong, and Lam, 2015).

This waste collaborating management program with the several research universities have also impacted the business organizations to develop innovative materials and technologies that allow easy recycling of wastage and textile wastage. This recycling program not only strengthens the work program to make the good uses of scarcity of resources (Anwar, 2017).

The management decisions have also influenced by the use of the recycling resources which may negatively impact the future growth of the Zara. However, most of the investment has been made by Zara in its future eco system process which lowers down the negative impact of its business operations on the environment.  The main influence of this eco supporting system will be on the cost of capital of the business. These will not only reduce the overall return on capital employed of Zara but also negatively impact the project acceptance decision of company (González, 2017).

Environmental issue

The environmental reporting of Zara has also shown that company has been planning to implement the more supporting program for the better work program which will strengthen the eco-supporting program of company at large.  The communication of the efforts undertaken by Zara for the environment protection and reduce the environment issues have been done by using the independent environmental reporting frameworks. This will not only make the business of the Zara more transparent but also strengthen the work process system as per the government and stakeholders. Currently, Zara has promoted the stakeholders oriented work policies program which not only increases the overall outcomes but also increase the efficiency of the business (Truong, 2016). The main environmental protection program which was designed by the Zara was related to change its business policy for using the carry bag. The management department of Zara has also included the investment program which adds value to environment protection and also increases the value to society at large. It is analyzed that environmental related policies developed by Zara focuses on using the paper bag instead of using the Polly bag (Boucher, et al. 2018). The initiative undertaken by the management of Company was to promote the Environment supporting program which strengthens the work culture and environmental issues. It has also lower down the negative impact of the environmental work program which will strengthen the work policies. The increased investment capital of company in the environmental program has also increased the brand image of company on international level. Most of the work program and policies designed by company have been made with a view to make the positive business outcomes (Fernie, and Sparks, 2014). It has designed the system process which could add value to environment protection work and increase the overall process quality. For instance, the greenhouse gas emission program undertaken by Zara is one of the best programs which add value to society and lower down the negative impact in determined approach (Nissen, et al., 2018). The main responses of the Zara are related to establish the better integration of the suppliers into internal control system which supports the transparency and regulatory compliance program. The newly developed reporting frameworks increase the transparency of the regulatory compliance and also share all the imperative information with the stakeholders at large. It has been evaluated that the auditing and training program implemented by Zara focuses on making the environment protection laws compliance program mandatory.  The buy- back program of the clothing is also designed with the sharing economy via clothing libraries. Another environmental issue protection program adopted by management of Zara has been designed for the betterment of the environment protection work. It is analyzed that cannibalization process has been adopted by the company in the adopted work policies (Amatulli, et al. 2017).

The environmental dimension inditex environmental policy of the Zara have found several issues which are committed to taking environmental issues into account when planning and carrying out our activities and undertake the strategic program with other business partners. It encourages compliance with the environmental laws that governs activities, work system and pollution control program which strengthen the work policies and CSR work program of Zara (Armstrong et al. , 2015).

There are other several responses of Zara which have been undertaken by the management such as following the international corporate social activities program in which installation of Eco-developed system process have been done. This eco-system not only strengthens the environment protection but also increases the overall quality of the work process which will mitigate the negative impact of hazardous substance in society (Lueg, Pedersen, and Clemmensen, 2015). The human rights abuses, design piracy and unsafe work environments are the major factors which are considered by Zara in its environment protection policies. This will not only lower down the negative impact of its business on environment but also increase the efficiency of its business at large (Adams, Font, and Stanford, 2017).

 The main environmental issue for Zara is related to its operation activities plan and high energy consumption program. In the operational plan of company, it is found that there is a toxic chemical used by the organizations indulged in fashion cloths manufacturing include sodium hydroxide (caustic soda), and sulphuric acid which are also very hazardous for the environment and may negatively impact the clients and employees while handling the same. If Zara wants to save itself from the possible issues and negative impact of these hazardous substances then it will first have to focus on adopting new value chain system process and design new process chain (Ho, 2014).

There are several environmental issues which have been faced by Zara while running its business on domestic and international level. It is analyzed that company should adopt the notion of green washing environmental policies program to make the business more effective. This notion of green washing and environmental friendly work system will apply to the other efforts by Zara Company to position itself more favorably in the eyes of consumers. There should be proper compliance program in the working system of Zara which increases the overall outcomes complied with the heath safety standards and legal policies program. It has been observed that Zara Company needs to use the sustainable fabrics and textiles in its clothing products which are not harmful to human body (Pedersen, and Solerød, 2016).  The working process and operational plan of company should comply with the environmental laws and regulations which strengthen the work policies program to make its business more sustainable in long run. The main benefit or advantage of complying with the environmental laws and regulations is related to sustainable business practice. Zara should keep the consistent plan to meet the applicable laws for setting up the environmental protection practice for the betterment of organization at large. Every action of Zara should be ethical which undertakes the best possible course action for the betterment of the society and environment at large (Chow, et al.  2017).  The management department of company needs to increase their efforts to be more sustainable in terms of adopting the environment friendly work program, improving process system and adopting the environmental protection policies. The decision of the management needs to be undertaken with a view to establish the linkage between the organizational development and stakeholder’s growth. Company should expand its business by using the effective work program for the sustainable future of its business but at same time it should give back to society what it has taken while running it business. The management policies prepared by Zara should be designed to make its fashion outlets more eco-friendly to consumers on their surface. The main focus of company should be to promote its business online which will lower down the pollution and negative environmental impact of its business on the people (Schneider, and Jastram, 2018). The online business program and window shopping program will assists people to go for shopping without tapping the market. This increased offered and online shopping supporting program will assist organization to implement people’s oriented work program. It is considered that Zara Company should set up proper Eco-System and development program to save the environment from all kind of negative impacts in environment. The use of paper bag and environment friendly work policy will assist Zara Company to manage its work program to increase the sustainable business practice (Sebastiani, et al. 2015).

Conclusion 

There are several finding which have been observed in this report that could assist Zara to make the effective strategic planning. The Zara Company is running its business on international level and also used online dashboard mechanism to increase the visibility of its clothing and accessories. However, the government intervention in Spain is less which may be positive factors for company to expand its business in market. It is analyzed that the initiative of company to make their stores more green and opened up several first flagship stores of their kind will be the best suitable course of action which will add value of company on sustainable basis. If these sustainable programs are implemented in the business of Zara Company, then all the Stores opened up will use 30% less energy and 50% less water to operate these stores. These sustainable future work practices has played good role in the sustainable future of the business. The undertaken work program will not only reduce the environmental issues and also increase the overall quality of the process system of the business functions of Company.

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