The Business Environment of ZARA in the United Kingdom (UK)

ZARA – ANALYZING BUSINESS ENVIRONMENT IN THE UK
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Introduction
The business environment experienced a paradigm shift due to the pandemic outbreak in the recent epoch. Today, businesses maintain social distancing and transform the business model to digitalization. Companies operating as manufacturers or service providers are compelled to exhibit a digital presence through online channels to reach the relevant target markets and penetrate potential marketplaces to explore new growth opportunities (Amankwah-Amoah, Khan, and Wood 2021). This report aims to examine the business environment of ZARA in the United Kingdom (UK), one of the largest fashion apparel manufacturers and retailers. The applied tools would investigate the internal and external factors in the business environment, followed by different market forces that influence the strategic decisions for ZARA in the British market. The analysis would use the fundamental tools designed for performing environmental scanning, namely SWOT Analysis Framework, PESTLE Analysis, and Porter's Five Forces Model
ZARA is a signature apparel brand of Inditex's largest textile manufacturing and retailing company. ZARA is a pioneer brand in fast-fashion culture. The company has the largest retail store globally in the UK and other regions. In FY2019-FY2020, ZARA recorded total revenue of €7.71 billion and a net income of €3.4 billion in the European area. The brand became a popular household name in fashion apparel (Russell 2019). According to Debter (2020), Inditex became the 11th largest retailer worldwide because of ZARA's unprecedented growth, market penetration, and revenue generation. However, the fashion apparel industry is experiencing significant competition, transformations, and influences in the business environment.
Company Structure
Inditex UK has the following brands under its portfolio:
* ZARA
* ZARA Home
* Massimo Dutti
* Bershka
* Oysho
* Pull & Bear
ZARA and ZARA Home follow a different brand strategy, considered signature brands for Inditex UK. ZARA focuses on creating a fast-fashion culture in the British marketplace. The brand would promote the frequently changing collection with the following tagline:
"Freshly Baked Clothes"
ZARA manufactures fashion apparel for men, women, and children. The brand follows shorter lead-time culture and creates artificial scarcity by selling lower quantities to people and presenting the brand with a luxury image. The lead-time and artificial scarcity principle allow ZARA to keep British customers intact with each collection and persuade the purchase decision to lead the competition. Furthermore, the business model structure also focuses on a range of styles. ZARA is reported to launch approximately 12,000 types each year. The company avoids producing a quantity of a single class. As a result, the customers are more likely to enjoy more choices and feel connected with the brand activities throughout a fiscal period (MR 2021). Figure 1 below exhibits a few signature collections of ZARA for Winter 2021-2022:
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