THE INTEGRATED BUSINESS: A REPORT ON ZARA

CLOTHING COMPANY
Table of Contents
1.0 Introduction...........................................................................................................................................3
2.0 Discussion........................................................................................................................................4
3.0 Team Reflection...............................................................................................................................8
4.0 Action Plan.......................................................................................................................................9
References.................................................................................................................................................11
1.0 Introduction
The concept of integrated business is a strategic methodology that entails the

amalgamation of all business functions, such as marketing, operations, finance, and human

resources, with the aim of accomplishing organisational goals and objectives (Bigelow, 2021).

The implementation of this approach necessitates a synchronised endeavour among all functional

areas to guarantee that commercial activities and undertakings are congruent with the established

strategy of the company. Waite & McDonald (2019) posit that the business environment of the

21st century is not only full of opportunities but also challenges that bother rapid technological

changes, the economic security of enterprises and customer satisfaction, among others. However,

organisations that implement Integrated Business Planning can realise a number of concrete

benefits, including reduced inventory costs, improved customer service and demand fulfilment,

accelerated product launch schedules, and a more robust alignment between demand forecasting

and fulfilment (Talapatra et al., 2019). The primary benefit of implementing Integrated Business

Planning lies in its capacity to enable the harmonisation of a firm's immediate operational

activities with its enduring goals and tactics. This report is a discussion on how Zara Clothing

company can use strategic innovation and business ideas to solve its present challenges.

The Zara Clothing Company is a fast-fashion retailer based in Spain, with a global

presence of more than 2,000 stores across 96 countries (Quickbooks, 2018). The organisation

has effectively executed an integrated business strategy to attain a competitive edge within the
fiercely contested fashion sector. The organisation's distinct operational strategy, which

prioritises vertical integration and a responsive supply chain, has facilitated the prompt delivery

of fast fashion to consumers and resulted in elevated levels of customer contentment and brand

allegiance. However, there are pressing challenges facing the company that demands urgent

attention.

2.0 Discussion

a) Despite the challenging economic climate due to the COVID-19 pandemic, Zara has

remained productive and increased its exports. However, the company is still facing

challenges, such as inflation, which is set to increase. As a result, it is important for Zara to

address this issue and take steps to maintain its profitability in the current economic

climate.

There exist multiple strategies that Zara might consider in order to tackle the issue of

inflation and economic downturn resulting from the COVID-19 pandemic. Jovanovic (2022)

suggests reducing costs, including inventory level reduction, supplier contract renegotiation, and

supply chain streamlining. Zara may contemplate a strategic increase in prices to mitigate the

effects of inflation while retaining its customer base. In addition, the exploration of new markets

can aid in the diversification of revenue streams and mitigate dependence on a singular market.

Furthermore, enhancing operational efficiency represents an alternative strategy that Zara

can adopt to tackle the challenge of inflation. According to Shabir and Aibishri (2021), a

company can enhance profitability and minimise expenses by optimising its production and

supply chain procedures. The implementation of technology, specifically the investment in

advanced production technologies such as automation and robotics, is a viable approach to

attaining this objective. In response to the Covid-19 pandemic, companies have implemented a

strategy of workforce reduction through the replacement of human labour with robotics and

artificial intelligence, as reported by Semuels (2020). Zara has the potential to utilise data

analytics and machine learning techniques to enhance its supply chain operations and optimise

inventory management.

b) Zara is facing serious allegations of misreporting its finances by the Finance

Director and excessive expenses by the Business-to-business sales account team.

Additionally, the share price has devalued, which could result in a loss of investor

confidence and harm the company's reputation with key stakeholders.

It is recommended that the organisation collaborate with the Serious Fraud Office's

inquiry. Undertaking this action would demonstrate transparency and facilitate an internal

inquiry aimed at ascertaining the scope of inaccurate reporting and vulnerabilities in the financial

reporting system (UNODC, 2020). In order to mitigate the likelihood of future occurrences, it is

recommended that Zara incorporate measures such as periodic audits and impartial evaluations

as a means of implementing checks and balances.

Zara can establish specific guidelines pertaining to corporate hospitality expenses and

ensure that all expenses are adequately documented and substantiated in order to address the

issue of excessive expenses by the Business-to-business sales account team. According to Lee

(2020), it is recommended that companies contemplate the adoption of a digital expense

management system as a means of enhancing their ability to monitor and regulate expenses.
Zara could potentially implement this strategy to maintain optimal levels of oversight and

accountability.

The significance of communication with stakeholders during crises is highlighted by

Madden (2020). In light of this, Zara should adopt a proactive strategy to tackle the concerns

raised in order to restore investor confidence and market reputation. This can be achieved by

means of transparent communication with stakeholders, the appointment of an independent

auditor, and the consideration of recommendations aimed at enhancing its financial reporting

system. Zara ought to undertake a review of its corporate governance structure to ensure

adequate supervision and responsibility for financial reporting and expense management.

Additionally, they recommend that Zara establish a code of ethics for employee conduct,

accompanied by unambiguous repercussions for non-compliance ( Eleng et al., 2022)

c) The company is facing a tough challenge as its closest competitor has launched a similar

product range at much lower prices, causing customers to switch. Additionally, other

competitors are investing in innovative digital management approaches to streamline their

businesses and online value propositions.

According to Falahat et al. (2020), the matter of issue price and pricing necessitates

innovation in situations where customers perceive alternative products to be identical. To tackle

the pricing issue, it is recommended that Zara undertake a comprehensive evaluation of its cost

framework to pinpoint potential areas for cost minimisation. To mitigate expenses, the

organisation ought to consider examining alternatives such as reevaluating supplier agreements,

streamlining its supply network, and enhancing operational efficacy. According to Camileri
(2018), it is advisable to carry out market research to gain a deeper understanding of customer

requirements and inclinations, and subsequently modify the product assortment and pricing

tactics.

Zara may contemplate modifying its marketing and advertising approach to enhance the

communication of the value proposition of its merchandise. The implementation of cutting-edge

digital technologies could potentially mitigate the complexities associated with managing digital

operations for Zara. According to Nakoloas and Kitsios (2023), the implementation of digital

technology, including automation, data analytics, and artificial intelligence, has the potential to

optimise business operations and enhance the online value proposition. It is recommended that

Zara engage in collaborative efforts with digital technology partners and startups, as well as

allocate resources towards employee training, in order to acquire the requisite digital

competencies and expertise necessary to facilitate innovation and transformation. The

organisation ought to prioritise enhancing customer contentment and allegiance by implementing

specific marketing and communication tactics. According to Khan and Ghouri (2018), effective

communication of a product's value to consumers is crucial for differentiation.

d) Warehouse space shortage due to high manufacturing output, quality issues with

sourcing components, and in-house assembly. This shortage is causing stock-outs, longer

lead times, increased consumer complaints, and low satisfaction levels. The lack of timely

and accurate management information is making it challenging to make informed

decisions.
 In order to tackle the issue of limited warehouse capacity, Zara must contemplate the

adoption of a proficient inventory management system that can facilitate the maximisation in the

use of the existing space (Jin & Shin, 2020). One potential solution involves the implementation

of a system that establishes a correlation between production and stock availability, thereby

enabling production to be predicated upon demand. Zara may consider investigating the option

of outsourcing production to external manufacturers as a means of alleviating the burden on its

internal production capabilities.

Also, in order to tackle the issue of heightened consumer grievances and exceptional

levels of discontentment, Zara must enhance its customer service and communication protocols.

It is recommended that the company contemplate the implementation of a comprehensive

customer feedback mechanism that can effectively capture customer grievances and feedback.

This would enable the company to promptly address any issues that arise (Aderogba, 2021).

Zara may consider expanding its product portfolio by introducing novel product lines or

enhancing the quality of its current offerings.

3.0 Team Reflection

Team reflection is a transition phase procedure that is considered vital for team

functioning because it allows the team to analyse prior actions and strategies and make

conclusions for future action phases based on lessons learned (Otte et al., 2018).

The team was assigned to use PowerPoint to provide the Zara marketing and operation analysis.

We had a clear project plan at the end of the first meeting to keep the group focused and on
track. There were regular meetings to track progress and ensure that everyone was on the same

page. The group leader was also very helpful in promoting cooperation and providing guidance

when needed while also empowering team members to take ownership of their positions and

contribute to the success of the project.

One of the difficulties I found was the direct distribution of the tasks to each member of

the group, which encouraged individualism. Because the tasks were distributed and there was a

lack of good communication, the group activities initially looked like individual activities. The

activities, however, were rearranged, and we were paired by the group leader. To keep everyone

informed and interested, a range of communication techniques, including WhatsApp chat, phone

calls, and face-to-face meetings, were utilised to guarantee that everyone was working towards

the task. The team members also demonstrated flexibility and agility in responding to

adjustments, and we were able to stay on schedule. I believe we can do better if we are grouped

again by following the action plan outlined below.

4.0 Action Plan

Action Step Description Responsible Expected result

Person
Conduct a Needs To identify areas of Group leader This will facilitates a clear
Assessment improvement for understanding of the specific
team/group area or goals that need
improvement
Develop a Training To address areas of All g members This will improve the
Plan improvement within the knowledge and skills of
 group members.
Establish Clear and effective Assigned This willm improve
communication communication member communication among group
protocols protocols within the members and tutors
group structure
Encourage Collaboration among Group leader This will improve
Collaborations the group collaborations and teamwork
that will lead to better
outcomes
Implement Team Team building Group leader This will improve team
Building Activities activities to promote cohesion and trust
teamwork, trust and
collaboration within the
group structure
Monitor and Evaluate Regularly monitor and All members Continuous improvement and
progress evaluate progress refinement of group working
towards improving practices
group or team-working
within the group
structure

Table 1: Action Plan.

Through the implementation of this action plan, the group will be able to improve their future

group work, which will ultimately result in a better outcome for the group, higher satisfaction

among group members, encourage more collaboration, and provide opportunities for learning.

5.0 Conclusion

In conclusion, the integrated corporate structure that Zara Clothing Company employs has

proven to be a successful business strategy. The company has been able to respond more quickly

to altering market trends and streamline its operations as a consequence of the integration of

diverse departments and services. This is despite the fact that the company has faced issues in the
press. Zara can optimise its processes and incorporate these values into its overall business

strategy by implementing the recommendation. As the global business environment continues to

evolve, it is essential for businesses to adapt and prioritise responsibility and sustainability in

order to remain competitive and meet consumer demands. Zara can enhance its brand reputation

and contribute to a more sustainable future for all by adopting this strategy. Overall, the

integrated business strategies offer tremendous potential for Zara and other businesses to

innovate and drive positive industry change.

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