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Discuss the benefits to Zara from improving its ethical behaviour. - Edexcel - GCSE Business - Question 9 - 2016 - Paper 1
Question 9
Discuss the benefits to Zara from improving its ethical behaviour.
Worked Solution & Example Answer:Discuss the benefits to Zara from improving its ethical behaviour. - Edexcel - GCSE Business - Question 9 - 2016 - Paper 1
Step 1
Improved Brand Image
Answer
One significant benefit to Zara from improving its ethical behaviour is the enhancement of its brand image. A brand known for ethical practices is more likely to attract socially-conscious consumers. This shift can lead to increased customer loyalty, as consumers prefer to support companies that align with their values. Furthermore, a positive brand image can also enhance Zara's reputation in the marketplace, making it more competitive.
Step 2
Source of Added Value
Answer
Improving ethical practices can act as a source of added value for Zara. For instance, by adopting sustainable materials and transparent supply chains, Zara can differentiate itself from competitors. This differentiation is attractive in today's market where consumers are increasingly considering sustainability in their purchasing decisions. Such changes can also enable Zara to justify premium pricing, as customers may be willing to pay more for ethically produced clothing.
Step 3
Reduction in Pressure Group Activity
Answer
Another benefit is the potential reduction of pressure from activist groups. By improving ethical standards and being proactive in areas such as labor rights and environmental sustainability, Zara may reduce the likelihood of public backlash or negative campaigns from NGOs and consumer advocacy organizations. This reduction in scrutiny allows for smoother business operations and fosters a more secure environment for brand growth.
Step 4
Increased Competitiveness
Answer
Enhanced ethical behaviour can also lead to increased competitiveness for Zara in the fast-fashion market. As consumers become more informed and concerned about the impact of their purchases, brands that fail to adapt may lose market share. By positioning itself as a leader in ethical practices, Zara could gain market advantages over competitors that are slower to respond to these changes.