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. The company was founded in 1975 by Amancio Ortega in Spain. Trendy clothing brand Zara is known around the world for dressing men, women and children in a sexy retail environment that feels a lot more expensive and exclusive than it is. Truly a global brand, Zara has hundreds of retail locations everywhere from Abu Dhabi to Uruguay and is the largest division of Inditex, one of the largest fashion retail groups worldwide.
It is claimed that Zara needs just two weeks to develop a new product and get it to stores, compared to the six-month industry average, and launches around 10,000 new designs each year. Zara has resisted the industry-wide trend towards transferring fast fashion production to low-cost countries. So far, the company has satisfying progress towards completion of defined goals. Inditex as a group has been recognized more co-friendly than competitors and now has gained a repute of being sensitive and rational towards the community and environment welfare issues. 1)http://www.brandchannel.com/features_webwatch.asp?ww_id=190 2)http://en.wikipedia.org/wiki/Zara_(retailer)
PEST analysis is a business analysis model. It examines the external environment and the global factors that may affect a business. The PEST Analysis is done under the following headings:
Government is the major and silent factor in a business; in form of policies they may support an industry. Zara has been in Spain till now and only one more major distribution centre for Europe. For expansion of business in more countries, political support provided should be evaluated critically. Zara has options to expand its business in European countries because of their safe and predicable economic circumstances. ECONOMIC FACTORS:
Zara has been dealing in a single currency since its origin. The economic conditions of overall world have been fluctuating in last few years but Zara is successful in getting market share and has not been affected by the recession. The main reason behind was that Zara is not currently dealing in dollars and is using a relatively safer currency for its dealings. Before entering new markets, the currency rates and the economic condition of that country is evaluated. Spain has a stable market and predictable demands in market.
Zara is currently operating in a single county and that’s why faced a social influence that was already coped by Inditex group for its other brands. Zara luckily got a country based on independent cultural roots. Spain has a long history, with fabulous contributions in artistic and designing domain. This country has a calm social environment, attracting tourists on large scales, having lots of bright cultural events. Strong tourism exchanges enables retailers like Zara to get obtain customers and then retaining of customers is done by quality satisfying customers’ needs. Zara’s strategy of higher turnover encourages sale of items in a single visit and thus tourists become customers. Fashion at lower prices makes it easy to purchase for shoppers. TECHNOLOGICAL FACTORS:
Spanish retailing companies have often gone through technological improvements. Many of the competitors of Zara have brought new technological concepts in market in sales point atmosphere and manufacturing processes. Zara has launched its technological growth in form of eco-friendly stores openings. Moreover, manufacturing processes have been made easy and simple by breaking process into simpler tasks and then done by machines and final assembly is done by workers.