Nowadays, it may seem quite challenging to enjoy various aspects of life and be thankful to the government for solving a vast number of issues in the correct ways. What is more, it is difficult for people to take active roles in policymaking and be activists because they have their jobs and household responsibilities taking all their time. However, as noticed by anthropologist David Graeber, the concept of ‘political happiness and pleasure’ is quite possible to be achieved. At the same time, Graeber discusses “bullshit jobs” and their harmful effects on society.
First of all, it is necessary to address how Graeber makes an argument about political happiness. When discussing this phenomenon, the speaker provides an example of some other countries where people are actively involved in the political process (TEDx Talks, 2013). They enjoy the meetings, participate in them, and address their common problems together. Consequently, according to Graeber, political pleasure is when “there is a sense of common purpose, there is a sense that you trust the people around you,” and the differences between people become their source of power and determination (TEDx Talks, 2013). Further, people trust each other because they are all dedicated to solving a mutual issue.
In addition, another modern concept Graeber talks about is “bullshit jobs.” When explaining this phenomenon, the specialists mention that some people have meaningless and ineffective job positions, and while being aware of their unnecessity, they still try to find the meaning behind their work (Media.ccc.de, 2019). Overall, it is possible to say that these two concepts can be connected. For instance, it is appropriate to suggest that if such people were freed from their work, they would have more energy and self-confidence to be more active in public and political affairs. Consequently, the more “bullshit jobs” the community creates, the less “political happiness” there is in the world.
References
Media.ccc.de. (2019). 36C3 – from managerial feudalism to the revolt of the caring classes [Video]. YouTube.
TEDx Talks. (2013). The possibility of political pleasure: David Graeber at TEDxWhitechapel [Video]. YouTube.
Zara: The Product-Oriented Strategy
Introduction
Zara is one of the most recent successful fast fashion company brands globally. It emerged in Spain and has spread globally, with over 10,000 stores distributed. The fashion company’s origin is traced to early 1963. Its emergence was majorly associated with the dressmaking business. Currently, the business has a strategic focus on offering a higher number of quality products to its customers. Recently, fast fashion companies have adopted a competitive strategy to attain their company’s vision. Zara’s mission is to ensure maximum production and a regular supply of clothing needs to customers. For instance, Zara has incorporated a voluminous distribution approach to attain its vision. Zara has established a customer-centric approach to avail products closer to their customer’s actions which have enabled the effective achievement of the company’s mission of producing 10,000 prices a year. Further, Zara has objectively aimed to make the production chain sustainable to meet the rising customers’ demands; to achieve this, it has adopted a continuous improvement approach to its supply chain and production systems (Oliveira-Dias et al., 2020). Comparatively, the highlighted aspects have been pivotal to Zara’s profitability which is also the fundamental element of its objectives.
External Analysis
Being the best-selling fast fashion brand, Zara was subsequently met with a list of external factors implicated by the PESTEL analysis below. Firstly, Zara’s political environment is majorly associated with the European trade agreement. Being a Spanish brand Zara company is privileged to enjoy all benefits that include operating outside the European Union. Under the external economic environment, Zara’s company is positively associated with a low labor cost. Technologically, Zara Company has adopted the use of big data to expand its reach. As the global most popular fashion reseller, the company boasts of its huge database and adequate funds to attain necessary data to improve operations. Zara’s company is negatively impacted by its legal environment, particularly on aspects of copyrights.
Strategically, the competitors of Zara have limited influence, particularly on the product. Being a component of stiff competition, Zara’s focus will lie on product improvement and effective pricing strategies to continue being the market leader ((Mahardika & Wayansantika, 2021). Zara holds the largest segment of the global market; hence the influence of the competitors will relatively be limited on a comparative basis. Further, continuous improvement in design and trends with the help of big data analysis will place Zara ahead of its competitors.
Internal Analysis
Based on strategic capabilities, Zara companies boast vast financial resources which have highly enhanced data collection as a strategy to improve the customer experience and satisfaction (Johnson et al., 2019). The company has a dedicated staff whose target is to improve and renew customer satisfaction consistently. Below is the best-stipulated SWOT matrix adopted by the Zara Company.
Table 1. SWOT analysis
| Strengths
Dedicated staff Adequate financial profile Brand royalty and loyalty |
Weakness
Ever-changing trends that render products absolute |
| Opportunity
Growth opportunities due to market supremacy |
Threat
Increase competition from new entrants. |
A SWOT analysis on Zara implicated the existence of significant strengths as increased customer loyalty to the company’s brand; the loyalty highly enhances profitability. The company’s major weakness is the ever-changing trends that limit its ability to optimize the sales of particular brands. Further, competition poses a critical threat to the operability of the business (Lynch, 2015). Additionally, high prevalent legalities such as copywriting act as Zara’s threats that limit the company’s ability to replicate the external best-selling brand without evasion of copyrights. Also, competitors pose critical threats that restrict the company’s ability to optimize sales in the market. Finally, the company boasts of existing growth opportunities. For instance, Zara’s market supremacy and loyal customers highly enhance the company’s ability to penetrate the markets and succeed globally.
Strategic Option
Zara Company has adopted a product-oriented strategy to mainstream its operation. The strategy aims to incorporate promotional approaches and sales improvement. For instance, the company’s primary focus is on producing numerous types of items, which is evidenced in the ability to generate between 2000-4000 unique types of clothing every year. Zara in 2020 reached a $254 million profit from the business (Heuritech Solutions, 2020). Further, the company has adopted a vertical integration management level whose focus is mainly on product design production, management, distribution, and shipment (Dess et al., 2020). Zara has adopted the following Ansoff matrix to mainstream its objectives as a future growth strategy.
Table 2. Zara Ansoff matrix
| Market penetration | Product development |
| Market development | diversification |
According to the above Ansoff matrix, Zara focused on first market penetration. The company primarily focused on increasing its ability to enter new markets, motivated by the desire to gain control of the global market to enhance profitability (Forbes, 2019). Secondly, the company focused on product development as its primary strategy. It adopted product-oriented strategies to actively enhance the development of newer product lines while improving the already existing ones through innovation. Zara Company had a strong belief in consistency and growth in vital areas, including the company’s products.
Moreover, market development has become a significant concern and instrumental for Zara’s company growth. Under this, the company argued that sustainability of the external markets was only possible through radical development and improvement of the market development. Therefore, the company focused on continuous improvement of markets to instate sustainability globally. Finally, on diversification, Zara Company adopted an unrelated diversification strategy which spearheaded the attainment of growth in both products ranges and the entire business growth. In this, the company ventured into home décor diversification to increase the range of products it was dealing with. Conclusively, the Ansoff matrix was instrumental as it intimated and sped up the company’s growth and diversification, which highly marked its success.
Outsourcing has been the vital strategy that Zara has adopted to execute its operations. The desire to enhance design was attributed to incorporating outsourced technical expertise. Efficacy of the staff handling and management strategies is evident in the company’s ability to roll out the production satiety, which aims at offering a higher number of available products than the competitors (Mintzberg & Quinn, 2003). Zara’s generic strategy of cost leadership is much more effective as it stimulates the pricing strategies adopted by the company. The adopted cost leadership strategy has placed Zara ahead of its major competitors (Moya & Camacho, 2021). Nevertheless, Zara highly engages in product differentiation in its production line; such measure has effectively enabled the company to abide by the legal formalities. Differentiation strategies have also been applied in the pricing of the products; equitably, the company has gained continued loyalty from the customers from its specialized prices, which are pocket friendly and well embraced by the customers (Porter, 2004). Mover, Zara’s primary focus has been on products and customer satisfaction; such has enabled the business to streamline all the production actions to benefit the customers. Such has directly resulted in tremendous sales across the globe. Recently, the company’s strategic focus has shifted to inline trends. Such has insisted the fully operational global scale marketing. Such actions have increased the agreement of the company’s products globally.
Similarly, the adoption of digitalized marketing platforms has improved the company’s sales to a broader market, an implication of unimaginable success for the company. Therefore, the adopted cost leadership stage has stimulated continuous growth and improvement of the company’s ability to roll out newer products with a higher acceptability degree on the target customers. Further, strategy has enabled the business to record tremendous growth and expansion through its higher market penetration ability.
Strategy Selection & Justification
Zara Company has adopted a strategy to accelerate and broaden its digitalized transformation strategy effectively. The strategy’s primary focus has been to boost online and store platforms actively. This strategy has been implemented to purposefully enhance the use of the online platform to initiate sales of the company products. Also, Zara Company has incorporated technology to digitalize its operation following a recent shift in the marketing structures. Recently, the occurrence of post-pandemic has contributed to a shift in business ideology. Numerous companies have shifted its operation to the newer platform from which customers can access the product and investors can access the business portfolio. Also, Zara Company, just like other companies, has shifted to technology marketing, resulting in online platforms accessible through the internet. The shift in sales approach from the traditional approach to modernized digitalized platforms has significantly impacted the operation of Zara Company.
As a result, the company has prioritized online services as part of its 2022-2023 plan. Following the post-pandemic and recovery, online platforms to sell products have been encouraged to minimize physical interaction. Such actions have further pivoted Zara’s desire to adopt the new technology-driven selling platform to exercise sales. This approach is instrumental as it has broadened the digitalization of the company’s selling concepts and improvement in operational storage such as marketing (Frank, 2021). As a future growth goal, the company has highly invested in digitalization to smoothen the selling and ability of the products to reach global coverage on online platforms. The adoption of digitalized and online platforms has been embraced due to the increased flexibility associated with the same. Feasibility analysis indicated that online platforms provide a reliable user experience. Therefore, the evaluation of the adopted strategy indicated a positive ideological shift that would stimulate rapid growth and improved user experience.
Furthermore, Zara has adopted a highly suitable strategy that entails advances and continuous incorporation of technological innovation in the design. Such has resulted in highly acceptable brands, which are also justified by the customer’s choices (Wenjing, 2021). As a result, the strategy has been feasible in the company’s overall objective. With adequate materials, technology, finances, and market, the company is motivated to increase its production following the newer technology to engulf its competitors. Amplification of the products and continuous quality improvement has been critical for already realized success and the future success of Zara Company. As a result, technology adoption and increased invention are considered the most reliable strategic options for Zara Company.
Conclusion
Finally, Zara has firmly maintained its market influence, in the global constant, since its establishment; the company has highly engaged in the growth and development-oriented targets. For instance, the company has a customer-focused strategy that aims the provision a wide variety of products to meet the diverging customer’s needs. The production storage and processes have been in harmony towards attaining desirable customer experiences. The external and internal environmental analysis have pointed out critical successes and failures, so the company and the most notable was a success associated with brand loyalty. Such has been the driving force of the success attained within the business. Despite the copyright limitation and the threats from competitors and entrants’ firms, the company has adopted a more digitalized strategy to improve its operation. Arguably, the adopted strategy is instrumental as it would drive massive profit inflow and further the company’s leadership role globally. Zara Company has enriched its secret strategy to success. As evident in the future strategy, the company’s focus on technology merged with increased innovation would replicate tremendous outcomes, which will send its sales skyrocketing across. Also, diversification remains to be the most effective growth strategy in which technology would have a significant impact on Zara’s company.
References
Dess. G., McNamara. G., Eisner. A., Lee. H. (2020). Strategic management: Text and case (10th ed.). McGraw-Hill Education.
Forbes. (2019). Zara.
Frank. R. (2021). Strategic management. (5th ed.). McGraw-Hill Education.
Heuritech Solutions. (2020).
Johnson, G., Scholes, K., Whittington, R., Agwin, D., & Regner, P. (2019). Exploring strategy: Text and cases. (12th ed.). Pearson Education.
Lynch, R. (2015). Strategic management (7th ed.). Pearson.
Mahardika, I. P. D., & Wayansantika, I. (2021). Strategies for creating competitive advantage through product development, design and quality (case study on the ZARA brand in Badung Regency). American Journal of Humanities and Social Sciences Research (AJHSSR), 5(1), 279-282.
Mintzberg, H., & Quinn, J. B. (2003). The strategy process. (4th ed.). Pearson Education.
Moya, S., & Camacho, M. (2021). Developing a framework for mobile learning adoption and sustainable development. Technology, Knowledge and Learning, 1-18.
Oliveira-Dias, D., Maqueira, J. M., & Moyano-Fuentes, J. (2022). The link between information and digital technologies of industry 4.0 and agile supply chain: Mapping current research and establishing new research avenues. Computers & Industrial Engineering, 108000.
Porter, M. (2004). Competitive advantage: Creating and sustaining superior performance. Free Press.
Wenjing, Z. (2021). Analysis on the operating condition of the foreign fast fashion company in China. In 2021 The 6th International Conference on E-business and Mobile Commerce (pp. 88-92).
The US-China Trade War: Microeconomics Principles
Economics is a discipline that may be divided into two major categories, including macroeconomics and microeconomics. While macroeconomics addresses economic-related decisions made by governments and countries, microeconomics studies business decisions that affect individuals’ behavior in relation to supply and demand. However, even though macroeconomics and microeconomics refer to different spheres and subjects, they are interconnected and interdependent complementing one another. This paper will support this statement on the basis of microeconomics principles to substantiate the impact of trade between China and the United States and the trade war in particular on businesses and consumers of both countries.
In general, the disruption of both countries’ economies regarded as the largest ones was unfathomable. Until 2017, China was the United States’ largest trade partner with more than $600 billion in exports and imports (Library of Congress). However, in 2018, guided by “America First” foreign policy based on unilateralism, nationalism, and protectionism, the Trump Administration condemned China for seemingly unfair trade practices and placed non-tariff restrictions and increased tariffs on Chinese imports (Boylan et al. 24). At the same time, it was a ridiculous act of humiliation for China. Although China also introduced responsive measures in relation to U.S. imports, in 2019, Donald Trump “tariffs from 10 to 25% on $200 billion worth of Chinese goods,” including industrial and consumer products (Boylan et al. 24). In the present day, the trade relationships between the two countries remain unstable, especially after the negative impact of the COVID-19 pandemic. Figure 1 demonstrates the continuous decline of Chinese export to the United States with the worst failure during the pandemic when the international trade and global supply chain were corrupted.
It goes without saying that businesses and customers in both countries were almost immediately affected by their governments’ decisions. According to microeconomics principles, supply and demand affect prices, however, prices affect demand and supply as well. In the United States, consumers are more vulnerable to any changes in tariffs resulting from trade wars as “the prices of China-sourced consumer products and components would be expected to rise sharply” (The Economist Intelligence Unit). According to Alex Capri, the representative of the National University of Singapore Business School, in 2018, US consumer price inflation was expected to be 1.5% higher in comparison with baseline forecasts (The Economist Intelligence Unit). Based on the estimation made by The Trade Partnership, a Washington consulting firm, the 25% tariff would cost the average U.S. family consisting of four persons an extra $767 annually (Knott). Only luxurious products, known as Veblen goods, remain unaffected as their demand is not affected by prices and their manufacturing does not require Chinese materials. In addition, domestic manufacturing could not satisfy overall demand as it was not developed or required components and materials imported from China.
As a result, businesses were substantially affected by the US-China trade war in multiple ways. Small companies disappeared without having capabilities for survival while bigger brands had to increase prices, optimize them using inner resources, or temporarily keep them expecting changes in the global environment (Knott). Moreover, in order to remain competitive, they focused on the improvement of their supply chains with machine learning and artificial intelligence solutions as the trade war left “an increasingly small margin for inefficiencies” (Blue Yonder). Retailers aimed to adapt their planning processes on the basis of changes in demand and supply, optimal sourcing options, and material news to react in a time-sensitive manner (Blue Yonder). In other words, companies are expected to attract and retain consumers whose demand had been affected by increased prices through the advancement of their sources of information. These sources would allow them to address people’s preferences and provide quality customer service through demand forecasts and inventory management.
Microeconomics principles state that consumers’ purchasing power is determined by their income regulating demand. According to Scott and Mokhiber, “the growth of the U.S. trade deficit with China between 2001 and 2018 was responsible for the loss of 3.7 million U.S. jobs” and losses continued to increase, especially in the industries of electronics, machinery, and metals. Thus, as previously mentioned, the purchasing behaviors of US consumers affected by prices for the majority of products have changed as well. While some people preferred to save money, others started to pay attention to local or non-Chinese suppliers frequently paying the opportunity cost.
In addition, according to the substitution effect associated with the price elasticity of demand, people may prefer alternatives or cheaper substitutes when prices become unaffordable. As a result, a considerable number of customers switched to online cross-border e-commerce as small orders remained practically unaffected. That is why people from the United States and China increased their use of online shopping platforms, such as Taobao/Tmall Mall, eBay, Amazon, AliExpress, and AliBaba. They continue purchasing daily necessities, clothing accessories, furniture appliances, and 3C products as prices there were more affordable (Liu et al. 178). In addition, online shopping became more cost-efficient for personal stores and small entrepreneurs.
At the same time, the stable growth of international e-commerce reflected in Figure 2 was fueled by the lockdown caused by the global spread of the coronavirus. According to Antonella Teodoro, the representative of MDS Transmodal focused on research in the sphere of transportation and logistics, “the shift in consumer spending from travel, vacation and entertainment events to physical goods, mainly bought online, has characterized all the major western economies, in particular the North American countries” (LaRocco). People order products directly from China avoiding tariffs or tolerating with insignificant increase in prices.
Talking about Chinese consumers, the impact of the trade war on them was regarded as less severe in comparison with U.S. citizens. First of all, the United States was not “a major source of consumer goods imports, aside from some luxury brands” (The Economist Intelligence Unit). Moreover, It was easier for China to find alternatives and replace U.S. products with goods from other countries. At the same time, it was more challenging for the United States “to find new, plentiful sources of low-cost consumer products to replace China-sourced ones” (The Economist Intelligence Unit). In addition, China had fewer offshore production facilities to relocate than the United States.
At the same time, Chine consumers’ purchase behavior was less affected by the US-China trade war. Whether prices increased in this country, this tendency was less determined by the prices of American materials or resources. In addition, local companies that lose the opportunity to export products to the United States in the same volumes as before focused on the Chinese market targeting citizens. At the same time, those Chinese businesses that strongly depended on export decided to relocate their businesses to other countries to reduce tariffs.
To conclude, it is possible to say that macroeconomics is closely connected with microeconomics and affects its principles. From the example of the US-China trade war, it is clear that the political decisions of two countries impacted their businesses and citizens. Companies were forced to adapt to new prices and introduce new strategies to attract and retain cinsumers to stay competitive. In turn, consumers from both countriesstarted to search for alternatives and switch to more cost-efficient online-ecommerce.
Works Cited
Blue Yonder. “5 Consumer Perceptions of the U.S. Trade War with China and Holiday Shopping.” BlueYonder, Web.
Boylan, Brandon M., et al. “US–China Relations: Nationalism, the Trade War, and COVID‑19.” Fudan Journal of the Humanities and Social Sciences, vol. 14, 2021, pp. 23–40.
Knott, Matthew. “’Holding Our Breath’: Trump’s Trade War with China Gets Real for Businesses, Consumers.” The Sydney Morning Herald, 2019, Web.
LaRocco, Lori Ann. “China Exports Surged Late Last Year as Consumer Recovery Picked Up Steam in U.S., Other Nations.” CNBC, Web.
Library of Congress. “U.S. Trade with China: Selected Resources.” 2022. Web.
Liu, Li-Chun, et al. “Online Cross-Border E-commerce Consumer Behavior: A Case Study of Sino-US Trade Conflicts.” Journal of Economics, Business and Management, vol. 7, no. 4, 2019, pp. 174-181.
Scott, Robert E., and Zane Mokhiber. “Growing China Trade Deficit Cost 3.7 Million American Jobs Between 2001 and 2018.” Economic Policy Institute, 2020, Web.
The Economist Intelligence Unit. “Unintended Consequences: The Impact of Trade Wars on Consumer Markets.” The Economist, Web.