Multinational Firms in the World economy

Presentation on 15.12.2022

Topics I have to do:

- EL of Pestel Analysis
- Identification of ownership, internalization ad location advantages of your company
on selected foreign market
- Covid (auf dem PDF in good notes, Einfluss von covid)

Foreign direct investments in Portugal

PESTEL Analysis
Task: Assessment of macroeconomic environment of firm (PESTEL analysis), including
assessment of investment climate and policies towards FDI, on the Portuguese market.

Environmental Factors:

The ecological-geographical factors describe the environment of a company and the

conditions and resources available.

The ecological-geographical factors of influence include:

 Environmental regulations
 Emissions
 Climate
 Infrastructure
 availability of raw material sources
 conscious consumer behaviour
  Energy sources
 Consumption
 Recycling
 Disposal

1. Implementation of sustainable business policies

2. Environmental footprint of fast fashion industry
(Uses organic cotton on its products; interrupt the production of Angora wood)

Environmental: Portugal is a signatory to the Paris Climate Agreement and has implemented
policies to reduce greenhouse gas emissions and promote sustainable development. Inditex
has also made efforts to reduce its environmental impact, such as using sustainable
materials in its products.

Legal Factors:

Legal factors play a major role in a company's room for manoeuvre, because different legal
systems as well as the legal awareness of the population influence strategic decisions.

List of factors:
 Legislation
 Competition law
 Environmental law
 Antitrust law
 Tax law
 Labour law
 Legal system
 Legal awareness
 Product liability

1. Lawsuit filed by Amiri against Zara for copying designs of Jeans

2. Design infringement allegations against Zara by Rains

Legal:
In the case of the Inditex group in Portugal, the legal environment is generally favorable for
the company. Portugal has a well-developed legal system and a strong protection of
intellectual property rights, which provides a secure and stable environment for Inditex to
conduct its business. The country is also a member of the European Union, which provides
additional legal protections and opportunities for the company.
https://www.swotandpestle.com/inditex/
Identification of ownership advantages of the company inditex in
Portugal
(Ownership asset advantages, transactional ownership advantages, institutional ownership
advantages)

As a large and well-established multinational company, Inditex has the financial resources
and expertise to invest in the development of its brands in Portugal. This allows Inditex to
maintain a strong market position in the country, even in the face of competition from other
fashion companies.

Additionally, as the owner of several well-known fashion brands, Inditex has a strong brand
recognition and reputation in Portugal. This can help the company attract and retain
customers, and to differentiate its products from those of its competitors.

Furthermore, Inditex has a large and diverse customer base in Portugal. This allows the
company to better understand the needs and preferences of its customers, and to tailor its
products and services accordingly. This, in turn, can help Inditex to maintain a competitive
advantage in the Portuguese market.

Overall, Inditex's ownership advantages in Portugal include its financial resources and
expertise, strong brand recognition and reputation, and large and diverse customer base.
These advantages help the company to maintain a strong market position and to compete
effectively in the Portuguese market.

Identification of internalization advantages of the company Inditex in

Portugal
(Efficiency advantages arising through internalization of economic activity over the market)

Identification of location advantages of the company Inditex in

Portugal
Economic advantages:

Political advantages:

Social and cultural advantages:

Covid

In total, Inditex has supported the Corona Pandemic in 2020 with 40.4 million euros. The
graph shows in which proportions the money has been used for which aid. More than 177
million units were distributed to people in need through Inditex transport routes. In another
way, 24.6 million euros have been spent to buy and donate medical supplies. In addition to
these commitments, they have donated five automated production lines for the
manufacture of surgical masks worth 1.5 million euros to the Galician Confederation of
People with Disabilities (COGAMI). These can produce up to 15 million masks per month.
They also donated 140,000 waterproof health gowns, which they produced themselves, and
more than one million items to people in need who were particularly affected by the
pandemic. Most of these donations were distributed to those in need through collaborations
with NGOs.
In addition, Inditex, in coordination with a number of NGOs with which it regularly works,
has reformulated its collaboration programmes to help them address the new needs created
by the pandemic worldwide. These initiatives focus primarily on education related to the
health emergency, prevention and awareness campaigns, food security and humanitarian
aid, framed by Inditex's long-standing alliances with organisations such as Entreculturas,
Caritas, Medicus Mundi and Médecins Sans Frontières.
Beyond the donations made by the Company, Inditex has also launched various initiatives
aimed at facilitating employee’s` voluntary contributions to the global effort in fighting
against the pandemic. In a result, these initiatives led by their stuff have raised over 1.4
million Euros through charitable initiatives in the vicinity of our headquarters.
Im Gesamten hat Inditex mit 40.4 Millionen Euro die Corona Pandemie im Jahr 2020
unterstützt. Die Grafik zeigt, in welchen Anteilen das Geld für welche Hilfe verwendet
worden ist. Mehr als 177 Millionen Einheiten wurden über die Inditex Transportwege an
hilfsbedürftige Personen verteilt. Außerdem wurden 24.6 Millionen Euro aufgewendet, um
Medizinisches Material zu kaufen und zu spenden. Neben diesen Engagements haben sie
fünf automatisierte Produktionslinien zur Herstellung von chirurgischen Masken im Wert von
1,5 Millionen Euro an die Galician confederation of People with Disabilities (COGAMI)
gespendet. Diese können bis zu 15 Millionen Masken pro Monat produzieren. Eine weitere
Maßnahme war die Spende von 140 000 waterproof health gowns, welche sie selber
hergestellt haben, sowie das Spenden von mehr als 1 Millionen items an bedürftige
Menschen, die besonders von der Pandemie betroffen waren. Die meisten dieser Spenden
wurden durch Kooperationen mit NGO´s an die Bedürftigen verteilt.
Darüber hinaus hat Inditex in Abstimmung mit einer Reihe von NGO´s, mit denen sie
regelmäßig zusammenarbeiten, die Kooperationsprogramme neu formuliert, um sie bei der
Bewältigung der neuen Bedürfnisse zu unterstützen, die durch die Pandemie weltweit
entstanden sind. Diese Initiativen konzentrieren sich in erster Linie auf Bildung im
Zusammenhang mit der gesundheitlichen Notlage, auf Präventions- und
Sensibilisierungskampagnen, ernährungssicherheit und humanitäre Hilfe, die von Inditex
langjährigen Allianzen mit Organisationen wie Entreculturas, Caritas, Medicus Mundi und
Ärzte ohne Grenzen eingerahmt werden.