Table of Contents
Retailer Primark specializes on apparel, accessories, and footwear, and is one of the largest in the world.
Introduction of Primark
Retailer Primark specializes on apparel, accessories, and footwear, and is one of the largest in the world. The Weston family in Dublin, Ireland, founded the business in 1969. In the wake of its success as Penneyโs, the company branched out into new markets. The shop presently has 398 locations around the world. Customers who are looking for the latest fashions at reasonable prices appreciate the company’s low-cost offerings.
Primark’s annual revenue in 2020 was estimated by Statista to be 5.9 billion pounds, down from 7.79 billion pounds in 2019. However, the daily operations of the retail fashion brand are managed by around 78,000 employees.
Section 1
1.1 SWOT Analysis of Primark
1. Strength
Market In Europe
Primark is one of Europe’s leading clothing retailers. 392 stores are estimated to be in operation throughout Europe by the company, which includes the United States, the United Kingdom and other countries in Europe, such as Slovenia and Spain as well as the Netherlands and Italy. One of the most popular retailers in the United Kingdom, Primark’s products are very affordable. As a matter of fact, it offers products at a 30% to 40% lower cost than their American counterparts (Sandra Halliday,2020).
Marketing By Word Of Mouth
A lot of money isn’t spent by Primark on promoting their products. When it comes to word-of-mouth marketing, the retail fashion industry treats its employees and customers significantly better than it treats the company itself. It aids the company in reducing expenses and making lower-priced products available to its customers.
Rate Of Growth Is Extremely High
Prior to the covid-19 outbreak and the subsequent global lockdown, Primark had been growing significantly. In 2019, the fashion store made 7.79 billion pounds in annual revenue. An expansion of the company’s customer base was the goal. On the other hand, the business plans to restart its expansion. (Mary Hanbury, 2021).
Portfolio Of Products
Primark has a vast variety of products and services for customers to choose from. Accessories, footwear, underwear, and apparel are all part of the assortment. Since it offers a wide range of products, the business can appeal to many different types of customers.
2. Weakness
Excessive
Manufacturers for Primark come from Bangladesh, India, Pakistan, and China; these are the nations where Primark sources its products. Many low-cost workers can be found in these countries. However, several customers have complained that the company’s products have fallen in quality due to over-outsourcing. Most crucially, the lack of trade and energy in third-world countries results in a fluctuating supply of products (Camilla Hodgson, 2020).
Controversies
Over the years, Primark has had to cope with various problems. For example, 260 of the brand’s franchisees have been paying their workers less than the legal minimum wage.
Threat To Suitability
Primark’s cheaper prices are undeniable, but the company’s products have suffered as a result. There are two reasons for this: first, the lack of required skills in third world outsourcing countries, and second, the lower quality of the materials.
3. Opportunities
The Fitness Industry
Clothing is an area where Primark is already active. To remain relevant in the ever-changing world of fashion, the organisation should now look to grow into the sportswear industry.
Consulting & Expanding the Market
As a first step, Primark should survey Latin American and Asian countries like Brazil and Argentina to learn more about their consumers’ preferences. The information gleaned from the study would aid the organisation in determining its target market for expansion.
4. Threats
Insufficient Supply Line
With its supply chain and product line fragile, natural calamities and international trade concerns are a constant threat to Primark. It’s because the retail clothing brand relies on products manufactured in Asia. There are a variety of things that could go wrong during the manufacturing process and the transportation of the final product.
Competitors
Retailers such as JC Penney, Forever 21, Amazon, Gap Inc. and Walmart’s Old Navy are some of Primark’s main rivals in a variety of categories. The company’s ability to operate and expand its business is hampered by their presence on the market.
1.2 PESTLE Analysis
Political Factors
It’s important to note that in UK, dealing with political risk can be tough. The system of administration has frequently led to tensions between the national government and the governments of the provinces and localities. In addition, there are continual disagreements over which legal frameworks should be employed to resolve individual problems. It’s also unclear who should enforce or not enforce what legislation, resulting in an enforcement gap in the United States. As a result, it’s difficult to know with certainty what rules will be in effect, so learning about the applicable laws is essential. The available industries have hardly begun to approach nationalization. As a result, many hazards exist, including the confiscation of investments, the refusal to permit currency conversion, and the possibility of economic agreements being repudiated.
Economic
Like many other businesses, Primark has been adversely hit by the pandemic. Because of the economic downturn, Primark’s potential customers will have less discretionary income and will be less inclined to spend a lot of money on clothing, which will hurt the retailer’s performance (Buye, 2021). Despite this, Primark’s demand is significantly more inflexible in relation to income than that of some of its garment competitors, giving it a huge advantage over its more expensive counterparts. Consumers will have less money to spend as a result of this. Primark offers stylish clothing at lower prices for fashion-conscious ladies, thus many of them may choose to shop there when they want to appear their best. As for the economy as a whole, gasoline costs are a major concern. Moreover, a barrel of oil hit a price of $147 (the highest it has ever been). When gasoline prices were this high, Primark’s transportation expenses would have skyrocketed. Only two distribution locations are available to Primark: one in Leicestershire, the United Kingdom, and another in Naas, the Netherlands. Fuel costs in the UK and Ireland, Holland, and Spain will be high because of its vast distribution. Due to the rising cost of oil, Primark’s profit margins will be cut. Customers may see a drop in sales if the company decides to pass on the costs. The Bank of England’s reduction in interest rates is an additional crucial economic issue to consider. There have been five cuts in interest rates since October, when they were at 5%. At this point, they’re at 0.5%. For the most part, homeowners will be repaying their mortgages with substantially less money than they were previously because of the historically low interest rates. In this way, consumers will have more resources to pay on clothing, which could result in an increase in sales for Primark. Several of these mortgage holders may already be Primark customers because of their restricted buying power. Now that they also have more money to spend, they may choose to buy at more upscale clothing stores.
Social
Advertising and product promotion are being affected by the global shift in consumer tastes. The internet has a significant impact on how items are marketed. It’s important for the organisation to stay on top of social trends in order to keep its clients up to date. In order to attract new clients, Primark must keep up with the latest fashion trends (Fosher, 2018). Shopping in the UK is dominated by ‘value clothing.’ Two out of every five Americans now admit to shopping at “value” stores. This implies that shoppers are now looking for lower-priced alternatives to designer apparel. As a result, Primark has a significant edge over other high-street clothes businesses in the UK market. According to the style press, Primark was dubbed “Pri-Marni” for copying fashion spin-offs, and became the UK’s most popular discount clothes retailer overtaking Asda in that year. To meet the demands of young ladies who desire attractive attire at a lower price, Primark has produced designer replicas that are constructed of less expensive fabric. An judicious use of this social aspect resulted in tremendous sales. As a modern company, Primark understands that it must conduct business responsibly in order to maintain its good reputation. On their website, they demonstrate this by describing their ethical approach to business. However, the BBC discovered in January 2009 that some of Primark’s suppliers were acting unethically.
Furthermore, Primark intends to take advantage of the growing trend of businesses needing to be more eco-friendly as a way to succeed in the present business climates. Instead of a plastic bag, customers at Primark are given a brown paper bag for the vast majority of their purchases. Primark plastic bags are exclusively used for large items that might tear the paper bag handles if packaged in those bags instead. Paper bags are better for the environment because they are more biodegradable.
Technology
Primark has kept up with the times by developing cutting-edge technological marketing strategies that have resulted in increased revenue for the company. In order to keep clients loyal, they have embraced the use of credit cards. Additionally, they’ve included the internet as a tool to evaluate their products. Having all of their branches connected to the internet has made managing their stock much easier (Sammut-Bonnici and Galea, 2018).
Section 2
Identification of Opportunities and threats due to PESTLE
A PESTLE analysis is a standard method for obtaining a wide range of data. This tool’s primary feature is its ability to reveal the external factors that may have an impact on internal decisions. (Srdjevic, Bajcetic and Srdjevic, 2012). It becomes easier for Primark to prepare effectively when they are aware of the impact these external events have on them.
Even though PESTLE analysis can be used to evaluate individual businesses, it is most effective when applied to a larger, company-wide perspective. Understanding the current and future state of the company environment is a simple method to identify and take advantage of potential opportunities or prevent potential hazards (Journal, Rastogi and Trivedi, 2016).
- It is possible to foresee regulatory hazards based on political characteristics.
- In order for Primark to respond to changing market conditions, they need to know how the economy is doing.
- There are sociocultural elements that could either benefit or harm the business.
- New opportunities are continually being opened up with new technologies and evolving infrastructure.
- Primark can avoid costly fines or penalties thanks to legal considerations.
Section 3
Leadership Style
In their book “Primal Leadership,” published in 2002, Daniel Goleman, Richard Boyatzis, and Annie McKee identified six distinct emotional leadership styles…
Authoritative
When a leader employs the Authoritative leadership style…
Coaching Leadership
Asrar-ul-Haq and Kuchinke (2016) said that…
Affiliative Leadership
Affiliative leadership encourages cooperation…
Democratic Leadership
Democratic leadership emphasizes…
Pacesetting Leadership
Performance and achievement are at the heart…
Coercive Leadership
Autocratic leadership is used…
Best Leadership for Primark
A research conducted by Al-Malki and Juan (2018)…
Section 4
Corporate Social Responsibility
Corporate social responsibility (CSR) uses a self-regulatory business model…
CSR of Primark
Primark’s customers may now select…
Codes of Conduct
The Ethical Trade and Environmental Sustainability Program…
Environmental Stewardship
Primark are not starting from scratch…
Identifying and responding to threats
To keep an eye out for potential threats…
Assessments of the country’s risk
Every country they source from is assessed…
Primark Internal Data Analysis
As one of the most critical resources…
Stakeholders Consultation
External stakeholders are a crucial source…
Consultation with rights holders and worker participation
However, workers throughout the supply chain…
References
Abasilim, U. D., Gberevbie, D. E. and Osibanjo, O. A. (2019) …
