Company Analysis Of Zara In The Uk's Fashion Industry

Introduction

Company Background

Zara, a well-known reputed fashion designing and manufacturing company has been declared most efficient and market responding enterprise in UK’s fashion industry. . Zara was founded in the year 1975. It is one of the major selling brands of one of the biggest fashion retailer "INDITEX". Zara is now available in 86 countries with total of 1, 763 stores worldwide

Mr. Amancio Ortega, the creator and initial organizer of Inditex is appreciated for his strategic decisions as well as his market competition winning strategies have been accepted and followed by his competitors now. Zara, one of the brands of Inditex, is the most renowned and famous fashion icon. It is not only generating the highest profit

(Moynihan D. & Titley B. 2000)

Advantages

• Most of the governments companies run on sound business as they as they have their surpluses to their projects.

• It provides a strong competition for the private sector companies

• The formation of government companies is very easy because it is formed like other joint stock companies

Disadvantages

• As many of the government companies take the support of civil servants, they cannot exercise better for the efficiency of the organization because they are not technical persons.(involvement of unskilled employees)

• Government companies are not focused on new innovations and not familiar with new technologies.

Government companies are independence in theory, but in practice it is not independence because political groups obstruct in the day-to-day operation of the companies

 Government

When considering the fiscal since most of the European countries had to face a severe recession in the past few years the purchasing power of consumers had decreased this has hit hard on the company’s across Europe as the return on investment will be poor. Due to the recession the government reduces taxes on individuals & increases government spending so the revenue earned by the government will decrease due to these high taxes will be charged from firms to cover the costs. Also at present since the economies of countries which have been affected by the recession are gradually stabilizing the government charges taxes on individuals & firms since the spending power has increased Revenue income earned for the last two years and the comparison of this income earned. 2013 2014

Revenue £16,724 billion £ 18,117 billion

Reference: - (Zara Annual Report 2014)

Zara was able to achieve a growth in its income in compare to the previous year an increase in income of £ 1393 billion. This is due to Zara having the largest and the most broadly spread emerging market business amongst its peers.

Reference: - (Zara Annual Report 2014 Expenditure incurred by Zara’s for the last two years. 2013 2014

Expenditure £ 14014 billion £ 12798 billion

Taxation £ 688 billion £ 689