Zara case company analysis report - Essay Example

It further looks at the PR of the company and the major crises that have been facing the company over the years. A comprehensive analysis of the company’s strategy is done to establish the root of the company’s success. Lastly, the paper gives suggestions on how the company can improve its operations in the global scene.Zara is the leading brand of Spanish Fashion Group Inditex and a well- established Fashion Company in the global scene (Zara, 2012). The company was established in 1975 in La Coruna and since then, its growth has been sterling.

It had opened branches in major fashion cities including Paris and New York by the year 1990. It was because of their tremendous reputation that Zara Home was opened in the year 2003. In 2007, Zara established their first online shop that specialises in the sale of home products (Inditex, 2012). At the moment, the company operates 1830 stores in different parts of the world. According to recent financial statements, it contributes to more than 64% of Inditex’s revenue (Inditex, 2011). The company distinguishes itself as fast fashion trademark and offers high fashion clothing to reach the public at affordable prices.

Zara’s success has been impressive over the years and this paper analyses its external environment, value chain, leadership, strategies and challenges facing the brand name. External Environment Analysis The fashion industry is ever changing due to contribution of companies like Topshop, HandM and Zara (London Business School, 2008). Consequently, factors affecting the clothing industry will influence trends in the high fashion world. In the clothing industry, customers’ preferences vary according to their ages and body types (Keane and te Velde, 2008).

Furthermore, the demand for clothing is affected by population size and patterns. For example, an increase in the proportion of pregnant women and birth rate will increase demand for maternity and baby clothes (Suttle, 2011:45). It is important to note that demographic trends are the driving force in the fashion industry. The PESTLE analysis will be used to study the macro- environment and the Porter five forces model to evaluate the micro- environment. PESTEL analysis The fashion industry is characterised by high levels of competition among the top fashion brand names and frequent changes in the customers’ tastes and preferences.

PESTEL analysis is used to identify factors that affect the demand of goods produced with regards to the external environment. Political Aspects In terms of the political framework in the clothing industry, workers’ rights and employment regulations are mandatory in the creation of a legal environment in the manufacturing