Zara’s Organization Strategies. Its Macro and Micro Environments

Zara’s Organization Strategies. Its Macro and Micro Environments As any business firm that conducts its activity in contemporary world, Zara is comprised of interrelated parts and substructures that are integrated and intertwined with the outside world – the external environment. Since the connection and interdependence here is pretty strong, the environment affects the organization with a wide range of influences - political, economic, social, technological, legal, and environmental, which, in their turn, are the components of Zara’s business environment.
Political environment The most important thing of a political environment Zara operates in is fiscal policies of the governments of the countries Zara’s stores are situated in. Pursuing their objectives, governments can levy taxes that make conducting a business unprofitable in this political system, or, for example, cancel taxation of some firms at all to improve the situation of a company on the market. Overall political situation in the country also affects Zara’s business. Since some countries have unstable political situation (e. g. Somali, Iraq, many African countries), Zara is reluctant to maintain their business there because of unpredictable business conditions. Economic environment Since Zara’s initial purpose is bringing profits to stockholders of its parent company Inditex, all these factors should be carefully considered while acting in a particular economy in order to bring highest profit possible. Size of market, demand and supply trends, inflation rate in the economy, national income, per capita income, efficiency of public and private sectors and many other factors influence Zara’s performance in a particular economy and directly influence its profitability. Moreover, since an economic system of a