Strategic Perspectives Essay Example | Topics and Well Written Essays - 4000 words

Strategic Perspectives - Essay Example The paper also reveals the strengths, opportunities, weaknesses and threats of the Company. The value chain analysis and the resource capability analysis of Zara reflect the systematic and effective management of the products and services which has helped the company to achieve a successful position in the retail industry. This paper also provides insights on the current issues regarding the violence of the CSR activities by the company. It has been identified that the company should plan for an effective cost structure to overcome the recent problems. Recommendations have been provided using porter’s three generic strategies and Ansoff’s matrix to help the company make suitable strategies for achieving competitive advantage through market penetration and product differentiation. Table of Contents Table of Contents 3 Zara: A Company Overview 4 External Analysis 4 PESTEL Analysis 4 Industry Analysis: Porter’s Five Forces Analysis 6 Value Chain Analysis 7 Resource Capability Analysis 9 Issues related to the PR crises of Zara 10 Strategy Recommendation 11 Strategy Evaluation 15 Conclusion 16 References 17 Appendix 20 Zara: A Company Overview Zara is a well known Spanish clothing and accessories retailer. It’s headquarter is located in Arteixo, Spain. The company was founded by Amancio Ortea Gaona. It is one of the renowned brands of Inditex which was founded in the year 1975. The company had a slow growth in its initial years of operations but expanded to a great extent after the 1990’s. Zara is successfully operating in more than thirty different countries. Presently it is one of the leading fashions designing as well as manufacturing companies successfully providing services to the customers. External Analysis The environmental scanning of Zara will be done using the PESTEL Analysis. Pestel Analysis helps in analysing the issues related to the macro environmental factors (Lorat, 2009). PESTEL Analysis Factors Analysis Political UK is presently facing various problems related to high public debt, high unemployment etc. The government has taken important measures like cutting down the budget to an extent of 23 percent for media department, 22 percent for sports and culture department in order to reduce the overall financial deficit caused due to the sovereign debt crisis and the economic recession (Lynn, 2010). The Government has also planned to decrease the corporate tax rate in order to facilitate the companies operating in the country to recover from their financial crisis condition. Economic The economic recession has affected the European countries including United Kingdom. This recession has resulted in the increased unemployment rate for UK. Economists have also forecasted the future rise of the unemployment rate in the coming years. The recession has resulted in the decrease in the purchasing power of the customers as well. Thus the fashion retailers will have to face a situation of demand crunch du e to their operation in UK. Social The sovereign debt crisis along with the budget deficit in UK has decreased the purchasing capacity of the individuals and has also created a challenge in maintaining a standard life style. The working age population in UK is rising. The fashion retailers should focus on bringing a change in its product portfolio in future in order to satisfy the needs of the aging population of the country. Technological The retailers in UK are