Has the adoption of identified sustainable strategies at Zara Company increased the firm’s monetary growth and brand equity?

Organisational Background

In this section a background review of Zara Company is going to be developed and addressed in detail. The study seeks to undertake a critical comparison research on the evolution of sustainable strategies in Zara amidst the high competition presented by luxury brands manufacturers. Thus, the anticipated course of action is to evaluate the manner which youthful generation such as millennial and Gen Z have maintained an unwavering brand loyalty towards Zara products following its various campaigns and promotions in social media platforms such as Instagram. In this case, the determination of the matter shall lie on the perceptions of the target sample aged 18-30 years as has been detailed out later in the research methodology and the procedures thereof. Zara serves as one of the largest global fashion enterprises and has partnership with Inditex also considered to be the largest distribution groups (Zara, 2021). At the centre of the business model is the customer which incorporates design, manufacturing, distribution, as well as sales via its extensive retail network. Worth noting Zara has presence across major social networking sites namely Newsletter, Tiktok, Instagram, Facebook, Twitter, Pinterest, and YouTube. However, for this dissertation special attention on Instagram and as per the facts on 23rd November 2021 Zara Instagram evidences to have 3,543 posts, 87 following, and 47.4m followers (Zara, 2021). The other observation is that Zara has a diversified product portfolio which includes fashion for men, women, and kids; as well as manufacturing of shoes, bags, and athletics attires (Zara, 2021). Aligned to the information above is that Zara SA under the brand name “ZARA” remains a Spanish apparel retailer domiciled in Arteixo, Galicia, A Coruña, Spain and has its speciality in fast fashion, including products in clothing, footwear, accessories, swimwear, perfumes, and beauty and as mentioned, it is the world largest retailer of apparel. In 2019, it was approximated to have a revenue base of 28,286 million EUR and with 2,270 physical stores, and the parent company been Inditex. In 2020, the revenue was approximated at 20,402 million EUR proving a drop of -27.87% which can be attributed to the Covid-19 pandemic (Zara Annual Report, 2020).

1.3 Significance of the Problem

The gaps in the sustainable strategies adopted by Zara Company in the UK are themselves relevant at the industry level especially considering the forces that emerge from the external business environment. As anticipated to be proven in the later parts of the study, Zara operations must have been disrupted by Brexit outcomes as well as Covid-19 pandemic due to the changes in customer behaviour among others. In this regard, the problem presented in the study adopts a 360 degrees focus on how the internal and external business environment for Zara can be sought as a fundamental synergy towards a stronger, profitable, and competitive performance for Zara Company in the United Kingdom. Moreover, the assessment of the problem presents important academic insights to future scholars in understanding the interplay between sustainable strategies versus business performance of Zara; and the results may be wholly applicable to the fashion industry in the UK in the long-term.

1.4 Statement of Purpose

The review of Zara Company considering its core operation in the United Kingdom is to provide pedagogical and managerial solutions on how fast fashion enterprises can rely on sound sustainable strategies to drive a superior performance compared to their competitors.

1.5 Statement of the Problem

As held by Smith (2015) the assessment of the relationship between sustainable strategies and business performance of Zara as a fast-fashion company has not been fully explored especially in the context of the UK market/region. Moreover, Connell (2018) the methodological gaps in the studies evaluating Zara performance driven by its sustainable strategies still require more justification and conclusive insights meant to create comprehensive growth models for the firm. In the same respect, Diageo (2021) noted on the limited evaluation of Zara sustainable models and how they have been affected by external business environment especially the Covid-19 pandemic due to the ensuing changes in fast-fashion consumption among others.

1.6 Aim and Objectives

The study aims to examine the impact of sustainable strategies practiced by Zara Company in the United Kingdom towards its business performance.

The objectives of the research include the following:

  • To examine the effectiveness of the sustainable strategies implemented by Zara Company
  • To analyse the business performance of Zara Company considering two important events namely the Brexit and the Covid-19 pandemic in the United Kingdom
  • To comprehend the extent to which Zara Company has optimised its sustainable strategies to achieve enhanced performance in terms of profitability or financial stability and growth, lean/agile supply chain, and customer loyalty
  • To recommend viable models for sustainable competitive advantage for Zara Company for the purpose of enhanced performance in the long-term

1.7 Research Questions

The research questions for the study are going to be adumbrated by the qualitative and quantitative aspects of the study, as follows:

RQ1: How has Zara Company managed to formulate viable sustainable strategies that have enhanced its business performance across the period? (Qualitative)

RQ2: What have been the challenges preventing Zara Company to successfully attain a stronger performance in the changing business environment despite the adoption of preferred sustainable strategies? (Qualitative)

RQ3: Has the adoption of identified sustainable strategies at Zara Company increased the firm’s monetary growth and brand equity? (Quantitative)