INTRODUCTION outlets all over the globe. EXECUTIVE

INTRODUCTION

Primark is an Irish clothing retailer with
operations in the UK, France, Germany, Italy, Spain, and Ireland (operating as
Penneys) and recently the USA. It is a subsidiary of Associated British Foods
after being acquired in 2005. With global turnover totalling £5.4billion for
the year ending 2015, Primark has enjoyed tremendous success in the last couple
of years. Primark’s value proposition of low
prices has ensured it becomes the low-cost
leader in low-priced, “disposable”
fashion. This has attracted a lot of customers especially due to the 2008 fiscal
crisis and consequent recession, which as a result, made Primark enjoy consecutive
income progress and productivity since 2007. It is termed to be the second
largest retailer by volume. It is one of the major European brand which are
operating in almost 189 retail outlets all over the globe.

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EXECUTIVE
SUMMARY

Primark is confident enough about its products
and about its affordable prices which entices and influences the more increase
in consumers. Primark has an initiative to apply style, price, and quality all
in one shell. The company is known as the clothing retail brand taking over a
wide range of women’s wear products, men’s wear, children’s wear and home
products at extremely affordable prices with a wide range offers and discounts
schemes which prove advantageous to the consumers. Primark has not only limited
itself to the manufacturing of clothes, but also deals with wears and
accessories offered to all human shapes and sizes.

PESTLE
AND SWOT

The PESTLE
analysis discusses the impact of certain factors such as political, economic,
social and technical and how they inter relate in the business activities and
the company can draw in changes to take advantage of the opportunities and to
undertake measures from various threats while preparing the strategic plans for
the business activities.

The impact of politics on Primark’s business policies are subject to government
rules and regulations, the company should challenge and ensure that it is
abound to the rules and regulations which are laid by the government to sustain
the smooth running of its business. In June 2016, Britain voted to leave the
EU, in a move that was predicted to cause both political and economic upheaval
and uncertainty. Unsurprisingly, Brexit sparked political turmoil across the UK
with British Prime minister David Cameron resigning afterwards and Scottish
Prime Minister Nicola Sturgeon calling for a second Scottish independence
referendum to protect Scottish interests in the EU since majority of Scotland
voted to remain (Douglas and Gross 2016). Further, the whole Brexit saga has
caused a lot of uncertainty for businesses like Primark who have operations in
Europe too. While some firms like Primark have benefited from a weak pound
which fell against the Euro and Dollar following Brexit, Primark parent company
ABF have stated the decision to leave the EU has created uncertainty in the
business environment and financial markets. ABF noted that there would be an
adverse transactional effect on the profit margin on Primark’s UK sales next
year if Britain goes ahead and leaves the EU (McGregor 2016)- PESTLE
and SWOT Analysis of Primark 2016-2017

Economic
entity influences the growth and the stability of any business operations.
Similarly, in the case of Primark, the firm has established itself to provide
affordable products to its consumers and it must set standards of price range
that the company can also achieve maximum profits even out of the reduced
prices and offers which are set. For achieving the economic growth, they must
first examine the price of the products of their competitors and then take an
advantage of the opportunity in setting up a price range which is lower than
that of its competitors like Prada, Top Shop, Marks and Spencer, New Look, FCUK,
etc, which will lead to the progress of the company and will rise the profit
margin.

About the social factors, Primark must set a
good profile as to understanding the needs and requirements of their customers having
the social aspect in mind and should deliver the products accordingly, putting
into consideration the growth of plus
size fashion, ageing UK
population,etc and also use their clothing styles to inspire buyers.

Innovative technology arises new trend and
leads to swift progress in the organisation. Primark should focus on what
technology to use to adapt a blogging software and select the right technology
which will make the process easier. The hastening advancement and progress of electronic
commerce is continuing to open up more competition for ‘traditional brick and motor’ businesses in the UK clothing retail
as evidenced by the emergence of online fashion markets such as Pretty little
thing, ASOS, Shein, Boohoo, even Amazon, among others. This new channel of
distribution is opening the competitive space due to its comparative comfort
and low cost operational base. The fact that a traditional Brick and Motor
clothing retailer like Primark doesn’t operate an e-commerce website makes it
vulnerable to a decline in store sales as such technological developments
continue to shape the retail environment (Mintel
2015).

Legally, one
of the most recent employment regulations affecting the clothing retail
industry in the UK was the introduction of new Workplace Pensions legislation
that makes it mandatory for all companies to contribute 3% to their employees’
workplace pension for eligible British workers (Department for Business, Innovation & Skills 2016)

Lastly, current
fashion trends that are prompting UK clothing retail industry include the increase
of morally and environmentally aware consumers who recurrently demand firms to
adopt practices such as paper packaging and use of recycled materials. Some
retailers like H&M have already launched sustainable clothing lines made
from organic cotton, and other environmentally friendly materials. Many
retailers are also faced with government pressure that demands proper waste
disposal.

SWOT
analysis is the evaluation and examination of the data governing the business
activities.

Primark’s principal strength of offering affordable clothing has additionally empowered
the brand to surpass the Arcadia Group to become third largest clothing and
footwear retailer in the UK. Price is a major attractiveness to their brand as
they deal with affordable products and lots of discounts which increases the
number of customers daily. Also, the brand name speaks well for it around the
globe as well-recognised and lastly, they have diversified their product range
which is a major strength as consumers can get varieties all under one roof.

A major weakness
Primark faces is that it depends on the UK market which makes more than half of
Primark’s global business. They also suffer from consumer perceptions that they
are a basic brand and not as stylish also, that their products are not durable
and people fail to trust the quality of the products, which may lead them to
losing out to young and upcoming fashion brands that offer low-price value
proposition e.g. Boohoo.com. and prettylittlething.com, etc.

The high rise in obesity level is a fantastic opportunity for Primark because, they
can cater to plus-size consumers at same prices and quality. With half the UK population predicted to be
obese by 2050, clothing retailers need to start investing in plus size clothing
ranges (NHS 2015).

Their threats
are their competitors selling the
same products. As they must be aware of their competitors’ pricing strategies, and
to maintain their products at cheaper prices than that of their competitors.
Also, the Brexit saga has caused a lot of uncertainty for businesses like
Primark who have operations in Europe too.

STRATEGIC
ISSUES FACED BY PRIMARK

Through their weaknesses, there is quite a lot
of issues that Primark must investigate, from their customer experiences, to
customer positioning… even to their quality, but then, there is no doubt that
the Primark brand has done an excellent job in the European fashion market and if
for any other reason, their major issue is the Sustainability Effort of the Brand i.e. How are they going to keep
up in the nearest future? Are their sustainability efforts enough to make a difference in the
clothing retail industry? Can they really offer responsible fashion at amazing
prices? How well will customers position them in the longer period?

For the sustainability,
growth and progress of the brand, it is only necessary to put into
consideration what need be. I choose to base the sustainability focus on the
market analysis. The market analysis of Primark could
be studied more greatly by using Porter’s Five Force model which is as follows:

Threat
of new entrants: Entry of new sectors in market has
been the key reason in decrease of autonomous clothing retailers. Primark is
also dealing with competition from many new entrants in the market and the practically
quantified and unified behaviour is demonstrating advantage to the chain stores
over independent retailers.

Competitive
Rivalry: This is a major concern for every oligopoly
company, as competitors are on the watch for how to overtake one another.
Although Primark is very attractive to its customers, there are also other
brands, which are going through the steps of Primark to attract customers and
are ready to use their strengths over Primark like the quality, trends, etc. At
this point, it is only necessary for Primark to up its game.

Bargaining
power of suppliers: Bargaining power of suppliers act as
a reciprocal role for the company. Firstly, if the company nosedives to seek
the product from the supplier, then the consumers would choose the product of
that of the competitors which would indeed prove a loss to the supplier as well
as its product. Although, it is good as Primark keeps it clean with their
suppliers and supply chain, so the bargaining of suppliers would not really be
an issue.

Bargaining
power of customers: Customers have a extremely slim
chances of bargaining power in retail stores and since Primark already offers
sales at really affordable and discounted prices, there are no chances for
customers to have bargaining power.

Threat
of substitutes: Primark not only specializes in
clothing. Apart from that, it also concentrates on the apparels, accessories
and household products considering human sizes. Similarly, the products which
are offered by Primark are also offered by many of its competitors. Therefore,
it proves to be a threat to such stores and retailers who distribute the
products which are unique can only have an edge over its competitors.

MARKETING
OBJECTIVES

The company’s mission states to give ordinary
people a chance to buy the same stuff as rich people do. i.e. at a cheap and
affordable price. The company’s objective retrieves to always be the first
choice of the consumers and make sure that the consumers do not opt for the
competitors’ products.

RECOMMENDATIONS

Maintain exacting
standards when it comes to ethics and sustainability in supply chain: abide by
supply chain codes of conducts and have clean records of supply chain. Ensure
every tier is well investigated to avoid modern slavery and bad publicization.

Evolvement: Follow
fashion trends and, evolve socially, environmentally and technologically. Be
innovative, try out contemporary trends and be aware of what customers want at
every point in time. Be ready to offer steadily.

Increase in varieties:
There should be increase in the varieties of clothing most especially that of
office wear, and party wears to increase range of customers. Also, fashionable
gym wears and matching accessories that will make the customer consider
stopping at their store, to get anything clothing and accessories for all
occasions and not having to reconsider.

Maintain low prices
and balance value propositions: Customers already know Primark to be the most
affordable, but then, there is more to a customer’s needs than just low price.
The durability and quality of whatever is being purchased is very essential to
the minds of the consumers, so in the process of satisfying customer’s pockets,
ensure to balance good price, with good quality and also good services.

Increase customer
satisfaction and encourage customer experience: As stated in the weaknesses,
customers are not really satisfied as most of the time, the stores are untidy
and always have long queues. It is only necessary to make customer shopping
experience to be outstandingly amazing. This is what urges customers to come in
again and again.

Incorporate an
environmental friendly organization and do more Corporate Social
Responsibilities: Awareness and involvement of the society increases and even
boosts the customer perception. Old stock or out of fashion styles could be
given out to charity, improvement in adapting to societal voice out of
recycling would make the society feel appreciated and increase the position of
the brand in the hearts of the customers.

Providing online
shopping: As regards to the issue of bad customer experience and also
discomfort of the atmosphere while shopping at the main Primark store,
customers could be saved the stress and will even be more satisfied by being
able to shop online as this is the most comfortable way for most customers and
will even sell over the new brands which are ventured into online shopping
sales such as Boohoo.com, etc.

Expansion of the business: The company aims at
expanding its business activities therefore, their objective would be to open
more number of retail outlets in almost every cities and towns and providing
its customers with wide range of products and making its products easily
accessible to its target segment. Expansion
of stores around the globe, to Asia (most especially to India and China as
these are where their factories are located, Africa and other continents for
wider range of customer satisfaction and market range.

Increasing sales: The objective of any business
organisation would target to increase sales of the company and achieve higher
profits. For achieving this objective, it is necessary for the company to reduce
the prices and ensure that the product are available at a price which is lower
compared to that, of the competitors so that the consumer will automatically
prefer the product bearing lower price and this would increase the sales of the
company.

Retaining the existing customers: it is very
important for any business organization to sustain its consumers i.e. the
company should arrange its products in such a way that the customers would choose
its product and would remain brand loyal throughout. So to attain profits, Primark
should retain its existing customers by offering them products at a reasonable
and discounted prices.

CONCLUSION

In conclusion, Primark is at the radiant and promising
side of the market and the company has proved itself to be successful by
setting up proper standards and positioning itself in a differently from its
competitors, the company has well defined its target segment and has been
successful in satisfying its consumers which has resulted in high sales,
goodwill and the company has now risen the bar for its competitors.

 

 

 

REFERENCES

·        
Barrie, Leonie (2015) “How Primark’s
cut-price clothing could shake up US retail” Just Style Magazine,
available Online at http://www.just-style.com/analysis/how-primarks-cut-price-clothing-could-shake-up-us-retail_id126430.aspx

·        
Douglas, J., and Gross, J. (2016)
“‘Brexit’ Sparks Political Turmoil across U.K.” Wall Street Journal,
Online at http://www.wsj.com/articles/brexit-fallout-roils-u-k-labour-party-1466937187

·        
Department for Business, Innovation
& Skills (2016) “The new State Pension” Online at https://www.gov.uk/new-state-pension/youve-been-in-a-workplace-personal-or-stakeholder-pension

http://www.ciao.co.uk/Primark_Shop__Review_5590653

·        
http://www.marketing-intelligence.co.uk 

·        
http://www.open2.net/moneyandmanagement/management_organisation/money/briefs_20051206_primark.html

·        
http://www.primark.co.uk/page.aspx?pointerid=eb44df4565934edca627dac6ec12145a

·        
http://www.telegraph.co.uk/news/uknews/1498651/Prada-No.-Top-Shop-No.-Its-Primark-darling.html

·        
Johnson, G., Scholes, K., and
Whittington, R. (2005) “Exploring corporate strategy” FT Prentice Hall

·        
McGregor, Kirsty (2016) “Primark
owner boosted by stronger euro” Drapers, Online at http://www.drapersonline.com/news/brexit-to-have-positive-and-negative-effects-says-primark-owner/7009053.fullarticle

·        
Mintel (2015) “UK Clothing
Retailing” Mintel: London

·        
NHS (2015) “Britain: ‘the fat man
of Europe'” Online at http://www.nhs.uk/Livewell/loseweight/Pages/statistics-and-causes-of-the-obesity-epidemic-in-the-UK.aspx

·        
Office for National Statistics
(2015) “Ageing of the UK population” Online at

·        
http://webarchive.nationalarchives.gov.uk/20160105160709/http://www.ons.gov.uk

·        
Statista (2016) “Primark/Penney’s
global turnover 2007 – 2015” Online at http://www.statista.com/statistics/383785/primark-revenue-europe/

·        
Toplensky, R., Martin, K., Lewin,
J., and Rennison, J. (2016) “Sterling falls to new low in wake of Brexit” Financial
Times, Online at http://www.ft.com/cms/s/0/f6880350-428a-11e6-b22f-79eb4891c97d.html#axzz4EHCJCyiQ

·        
UK Essays. November 2013. Marketing
Plan Phase Primark International. online. Available from: https://www.ukessays.com/essays/marketing/marketing-plan-phase-primark-international.php?cref=1
 

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