PESTEL, CAGE Analysis, Supply chain, Human Resource plan and Cultural Web diagram

2. TEAM MEMBERS
Cagil Ilce
Daria Egorova
Ekaterina
Perelygina
Jim O’Shea
Julia Werner
Muhammed
Arshad
Thondikkodan
Muhammad
Yousaf
Munawar
Orlinsa Christian
Sara
Bouabdeli

3. MAIN PERSPECTIVE
”THINK GLOBAL, ACT LOCAL”
- To be loyalty Company Objectives and goal
- Creating strategies within possible future
scenarious
- Reliable on Company’s Culture and Values

4. INTRODUCTION
• Zara was founded by Amancio Ortega Gaona in 1975 in Spain.
• One of the most successful brands owned by Inditex group, alongside other fashion
brands as Bershka, Pull & Bear, Massimo Dutti etc.
• International expansion started in 1988 and now is present in nearly 100 countries
like Singapore, Mexico, China etc with 2000+ stores.
• Ability to produce and deliver garments in 3 weeks to respond to demand.
• Production is primarily based in countries like Turkey, Morocco, Spain and Portugal
whereas long shelf products are produces in Asia.
• In 2014 introduced RFID (Radio-frequency identification) on its products to control
supply and demand.
• As of 2016, ranked 27th on Interbrand’s list of global brands.

5. PESTEL ANALYSIS
Political Factors
• Threat of EU brake up + Protectionism, Taxation EG: BREXIT, France(National Front Party),
Italy… Zara’s supply chain is highly integrated within the EU!
Economic Factors
• Benefitted from Euro/single currency. Threatened by GBP£ exchange rate volatility.
Threatened by lack of faith in Euro currency. However, reports earnings in Euro so cheaper
Euro means higher sales figures!
Social Factors
• Spending trends/propensities of their chosen markets. The high paced trend of what people
deem fashionable. Must keep up and balance both.

6. Technological Factors
• Digital Communications:
Facebook, Instagram, Twitter, Pinterest, Youtube Channel, App
• Zara Social Media System
Environmental Factors
• Zara subjects itself to a high amount of corporate environmental responsibility.
Heavily monitors energy consumption, Fuel consumption of fleet, Packaging...
Legal Factors
• Regulations regarding clothing manufacturing. Child labour, Health and Safety.
BREXIT many change laws
PESTEL ANALYSIS

7. AMBITIOUS
• Based on Competitive
movement
• Following the competitive
advantage with main
competitives (H&M, GAP etc.)
POSITIONING
• “Warm style” in the industry
• Try to response every age ,
female and male target market

8. ORGANIZATION
The organization manage with a
lean corporate structure which
based firstly on high
performance. This structure
works as managerial hierarchy
levels and decentralize decision-
making.
SYSTEMS
The system of ZARA call “fast fashion” which
is similar to FMYCG( Fashion comes and
goes.)

9. SCENARIO ANALYSIS
Scenario 1 Description
Positive
The scenario can make a good
profit on factories and labour costs.
Neutral
The profit of production provides a
match of missing requirements.
Negative
Missing requirements give negative
image in the market and in the
stores.
Scenario 2 Description
Positive
The second scenario can make
customer satisfied with their
demand.
Neutral
Satisfied demands keep
customer loyalty within
company investment.
Negative
New sources of the different
products need extra labour cost
and investment.
Scenario
3
Description
Positive
Following low labour costs provides
high profit for the company.
Neutral
Their international many stores bring
the company as a best known situation
within hard management of cultural
diversity.
Negative
The distance from production and
stores bring high transport cost and
economical and governmental issues
which are hard to manage.
Scenario 1 The first scenario is
about supply and demant. If there is
a demand the company keep
supply low to stores so that price is
high then the company gives rest of
supply to external links to feed back
in the supply chain.
Scenario 3 The third scenarios is
about globalisation and labour
costs.
Scenario 2 with the external retail
customers in its püre form means
making everything in-house which
even for a homogenous product
group like clothing is a challenge.

10. CAGE ANALYSIS
Country Cultural distance Administrative Geographic
distance
Economic distance
Spain Home market for the
largest fashion retailers
Centralised distribution
channels help achieve
competitive advantage
through minimum
distribution.
Consisted from central
unit
located in Spain and
several smaller centres
which support
deliveries from Spain
Maintaining its stable
pricing policy through
high quality and good
design for better
consumers.
China The language and the
culture hard to adopt
regardless the
variances
There are ease of
expanding the business
and has good enclaves.
Good superior ports
and modernization of
infrastructure
It has larger markets
Higher income
Good supply chains
Germany English language as
well as high degree of
React quickly to fashion
trends, rapidly restock
Similar as Spain,
locations and
Affordable and easy to
buying patterns raise the

11. CAGE ANALYSIS
UK Flexibility of the
product
and merchandising.
developed more
fashionable lines and
customized prices to
the British market
Competitiveness
good structure of
locations where the
consumers are more
likely to buy.
More chances of
profitability as
appreciated and
recognized on this
market and high
popularity
among all classes.
Brazil Language variances as
compared to other
countries.
bureaucracy, logistics,
taxation and access to
skilled labour.
Poor infrastructure
and slow custom
process.
More expensive products
then the other countries
due to high import
duties.
India English language
Westernized elites.
It has common law
Good political
friendship
Consists of lower long-
run risks.
Only in two cities
however analysing to
expand in more than
that.
Specialised labour
Profitability
Firm strategy and
upgrading
Capital availability
Soft infrastructure

12. SUPPLY CHAIN
7 Rules of Zara’s Fashion Supply Chain (Benjabutr n.d.)
Overall approach
Keep production
in-house
Automatisation of
production & warehouse
facilities
Adhere to all rules
Management
Centralize design &
development
Utilize work cell
organization
Scheduling & control
Manufacturing
small lot limited supply
«What’s the secret to Zara’s competitive
advantage? Its supply chain».(Lu n.d.)
• 7,013 stores (of which 330 newly opened
2015) (O’Marah n.d.)
• Employee base of 153,000
• Vertical integration in retail
• Use of PDAs (personal digital assistants)
• Unique approach (Ferdows et al. 2004)

13. COMPETITION
• United Colors of Benetton
6000 retail stores in 120+ countries
Focus: High art, Inter-Racial Relations,
Politics and Aids in advertising.
• H&M
Strengths: Collaboration with leading
Fashion symbols: Kenzo and Balmain.
No factories, fast fashion affordable to
different customers.
• Gap:
Focus: the brand’s image through 2
segments: The stores where they retail their
3 brands (Gap, Old Navy and Athleta) and
the online business.
-
High Price
High
Quality

14. HRM PLANThe Guest Model
HRM Practices
- Inditex hires the right people and
allocate them to the right positions.
- Zara train the new employees.
- Appraisal
- Compensation
- Relations.
HR outcomes
- Zara’s employees have a sense of
commitment toward the company.
Flexibility and dynamism at work.
Behavioral Outcomes
- Motivation, teamwork, and loyalty.
> Performance Outcomes
- Positivity and Productivity.
- Innovation.
> Financial Outcomes:
- Profit.
- Increase in sales.
- Return on investment.

15. HRM PLAN
Pfeffer’s best practive
 No status difference: Zara employees can directly
communicate with bosses without getting a
bureaucratic feeling.
 Strong recruitment and selection processes held
by Inditex.
 Employment security
 Extensive training and learning.
 Employee involvement and information sharing.
 Great teamworking
Recruitment and Selection
Zara has no direct contact with candidates (Inditex Group)
- In 2016 in Paris, Inditex organized a Job fair that lasted 4
days.
- Candidates got to introduce themselves and pick their
favorite Inditex’s brands, justify why they want to work there
and convince the jury.
- Inditex selected hundred of candidates out of thousands.

16. CULTURAL
WEB
DIAGRAM

17. CULTURAL
WEB
DIAGRAM

18. FINALISE & CRITISIM
• Fast Fashion Sector Results
• Strategies in the USA, Europe, The middle east and The east of the World
• Loosing brand culture
• Human Rights – less labour costs

19. THANK YOU FOR YOUR ATTENTION