The differing stages of development in organizations

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First stage of strategic planning is mission statement in which company explains its future planning about business. While writing the mission statement of the company it must be kept the following points in its mind.

They should state clearly what they are doing now and what will do in future.

Mission statement must always be in positive sense.

To give a fair review of whole project or business the company should explain the business in small pieces in its mission statement.

While developing the strategic planning company should explain its objectives. In which ways the company going to achieve its aims. For example if a garment manufacturer has aim to capture overseas market with his garments then his objective is must to create good relation with overseas suppliers, arrange research work to find out the customer's requirements and also required to find out a suit able place for overseas head office.


After collecting the necessary data the purpose of the strategic plan is to setting goals for the company based on mission and vision statements. A goal must be described to achieve within time limits it may be for long term and may be for short term time span. A company or group of companies should start by achieving the short term goals then move to medium term and then long term goals.

Action plan:

Every business want to go quickly from down to boom. This is the process where company prepare action plans to achieve its goals. To make its action plans more effective it is necessary for company to arrange the goals first and list them according to their importance




Zara is one the largest fashion companies, it is the subsidiary of Inditex the group of companies and established in 1979. It has a big range of clothing retail store for men, women and children, Zara's a large number of stores in main cities of Europe, America and Asia shows the success of the Zara all over the world. Zara's motive to provide fashionable, trendy designs at reasonable prices. Zara introduces the latest trends and fashions in the market before their competitors that makes it more successful among a big range of people, cultures and generations in presence of large number of competitors in the market.

What is Audit?

Audit is an assessment of an organization mostly in terms of policies, procedures, system and production.

Basically audit is performed to assess to organization's compatibility with standard operating procedures which are pre defined for the smooth and reliable working of an organization. So an organizational audit process starts from planning that how to conduct audit what would be its scope then it moves towards fieldwork which include practical checking of samples which are taken for the purpose of audit, when fieldwork is completed then 3rd stage comes which is reporting which includes findings of audit, and the last step of organizational audit process is follow-up, which is done for the purpose of rectification of finding of audit.

SWOT Analysis:

SWOT analysis is used to identify and analyze those factors which play a critical role in achieving the organizational objectives which may be external and internal. Basically SWOT stands for following:


Includes the overall characteristics or achievements portfolio of a company which distinguishes it from other competitors in terms of profitability, market share and brand worthiness.


Includes those characteristics of a company which place disadvantage to it as compared to its competitors.


Includes those unveiled external chances which if availed they can boost company's profitability and sales.


Includes all those external elements in business environment which can adversely affect the business.

Importance of SWOT in organizational audit Process of Zara:

In this assignment I have tried to show the importance of SWOT analysis for Zara a clothing company & I have identified and discusses the strengths / weakness of the company and examined the opportunities and threats it may face with reference to is importance in audit process. Basically SWOT analysis is used by companies to access and evaluate the industry and to make and developed strategic policies in order to remain competitive in market. Importance of SWOT in audit process of ZARA is critical as SWOT highlights the key internal and external areas where Zara is doing business. SWOT analysis is used in decision making process, as SWOT indicates the loop holes and strengths of company so it helps a lot in audit process


Following are the Zara's Strengths

Targeting the major market segments

Zara is a trend setter not trend follower

Strong experienced Marketing Team

High Brand recognition

Enjoying high reputation in market

High quality products

Marketing strategies

Wide network of stores all over the world

Market demand in all seasons


Following are the Zara's Weakness.

Prices are relatively high as compared to its competitors.

High cost of production.

Not much famous brand.


Following are the main Opportunities to Zara

Growth of internet leads to increase in number of customers who wants to buy online

New Emerging markets.

Opportunities to expand business in Asia


Following are the potential threats to Zara from external Factors.

Rapid change in fashion trends

Rising production costs can affect the profitability of Zara.

Network Breakdown in distribution causes much more disturbance

Launch of new affordable luxury items by competitors on relatively cheaper prices



According to porter's five forces model there are five forces that determine industry attractiveness and long run profitability of industry.

Following are the five forces of porter's model

Threats of new entrants.

Bargaining powers of suppliers

Bargaining powers of Buyers

Industry competitors

Threats of substitutes

Threats of New


Porter's five forces model

Bargaining powers of suppliers

Bargaining Powers of Buyers

Industry competitors

Threats of Substitutes

Threats of new entrant:

The threat of new entries depend on barriers to entry, low barriers high entries, high barriers low entries. Higher the entry in the market, more competition in the market. Due to a good brand name and quality products Zara have no threats from new entries if there any new company come to the market that will take some time to make its place in the market but Zara has some threats from existing competitors i: e Next and Marks and Spencer's, Zara must to improve its product quality and need to provide good customer services to its customers to retain its market in presence of such a big competitors.

Bargaining powers of suppliers:

The term suppliers comprise all type of inputs that's required to provide a good customer services. Supplier bargain power will high if the number of Zara's suppliers are low and vice versa. Zara has no threat from clothing suppliers because it has a large number of clothing suppliers but If Zara need skilled labor then there is some threat from suppliers of skilled labor.

Bargaining powers of Buyers:

In this part of porter's industrial model we will discuss about the power of bargain of buyers. If we see in context of Zara in the retail business then we can see that the bargain power of buyers is very strong in this type of market. Any company does not know exactly what customer's choice is. Most of the time customers are not agree to with the price on the tags. Customers don't want to pay high prices but still insisting for some better quality products. In all these situations management of Zara need some refined strategic plans to overcome all these problems and try to make maximum of their customers satisfy. Zara got a big brand name, so if Zara cut its price of some products then it could be able to attract most of the customers and could be able to retain them.

Industry Competitors:

If we see the retail industry market then there is a perfect competition in the market. Basically Zara deals with clothing industry market and if we see the clothing industry market in UK then there are a huge number of retailers in market and in this situation Zara need perfect strategic plans to stay in

Market. Zara needs not only its existing customers but needs to attract new customers from the market to survive.

Threat of substitute:

A threat of substitute is exits if there is an alternative product is available on low prices. In this situation Zara can improve its range of products with high quality if it seems difficult for company then Zara should marginally reduced its prices to capture the customer market in presence of product substitute. But some people may brand conscious and they may not ready to buy other alternative goods even on low prices. And as Zara is trend setter not a trend follower may they introduce new trend in clothing to survive in clothing market.