Introduction
The pandemic and the Russian-Ukrainian War have significantly negatively influenced the global capitalist economy over the past three years. Inflation and issues with global supply chains are only a couple of the effects that these factors have had on businesses all around the world. The fashion business has not been an exception, and it has had to implement a number of strategies to deal with the effects of these issues. As an observer of a fashion business, I have considered similar effects and strategies to cope with these issues. This informal report will discuss the impact of the above factors on the day-to-day activities of a Zara fashion business and provide recommendations for improvement.
Discussion
The disruptions in the supply chain have been a major challenge for the fashion business. Due to travel restrictions and shutdowns, finding essential fabrics and accessories for products has become increasingly difficult. As a result, they are experiencing production delays and extended waiting periods, which has made it harder to meet client demand. The impact of inflation on business operations has been severe (Smith, 2022). Production costs have risen due to increasing costs of raw materials and transportation, which has forced them to raise prices, thus reducing competitiveness.
Fashion businesses have taken a number of steps to cope with the fallout of these factors. Diversifying the supply chain is one of Zara’s main strategies. To lessen reliance on any single supplier, the company has begun acquiring fabrics and accessories from a variety of providers in other nations. This assisted in reducing the negative effects of travel restrictions and lockdown procedures. In addition, Zara company has begun to invest in automation and digitization to reduce reliance on manual labor. Productivity has increased, and company manufacturing costs have decreased as a result, which has helped Zara stay competitive in the market.
Recommendations for Improvements
Despite the implemented measures, there are still opportunities for improvement. An essential recommendation for the fashion business, especially Zara, is to redistribute its finances to finance the selling of goods. It is important to emphasize that during the pandemic period, the demand for buying clothes and accessories through online stores has increased significantly (Kahn, 2021).
Therefore, as a recommendation to Zara, one can consider additional financial support to operate the company’s website. Improving its design in line with modern trends and implementing marketing tools will improve the company’s position in the online sales market (Lata & Chandhok, 2022). The second recommendation is the creation of a charity fund to help war-affected Ukrainian refugees and their families (Bravo, 2020). Zara can use this approach to sell their products and improve its reputation in the context of charity.
Conclusion
In conclusion, the worldwide pandemic and the Russian-Ukrainian War have significantly impacted Zara’s fashion business operations. Particularly, the supply chain has been disrupted, inflation has occurred, and consumer behavior has changed. To overcome these obstacles, they have implemented a number of strategies, such as diversifying the supply chain, investing in automation and digitization, and putting a priority on innovation and product development. However, considering the abovementioned recommendations, Zara can combat current obstacles and act effectively to solve problems with supply chains and other aspects.
References
Bravo, L. (2020). How to break up with fast fashion: A guilt-free guide to changing the way you shop – for good. Headline.
Kahn, B. E. (2021). The Shopping revolution, updated and expanded edition: How retailers succeed in an era of endless disruption accelerated by COVID-19. Wharton School Press.
Lata, S., & Chandhok, M. (2022). Goyal’s target CUET (UG) 2022 section II – business studies. Goyal Brothers Prakashan.
Smith, M. (2022). Ukraine War: What are the impacts on the world today? The IRC. Web.