PRIMARK: COMPANY OVERVIEW

One of the top-ranking businesses in the UK's retail apparel sector is Primark. Over 350
outlets are owned by the firm. The firm was started in Ireland in 1969, and since then, it has
expanded significantly in size. The firm offers a range of items for the home as well as
clothes for men, women, and children. The business's successful and well-known
fundamental strategy of providing good quality garments at a reasonable cost has made it
popular.

The company's net value climbed to 378.8 billion British Pounds in 2016, giving it a market
share of 7% in the apparel sector as of 2017. The corporation had 368 outlets as of 2018, with
Market Street in Manchester housing the biggest number (approx. 155,000 sq. ft ).
Additionally, the business has employed nearly 70,000 people. The business specializes in
selling apparel, cosmetics, and home goods.

Since Arthur Ryan founded the corporation in 1949, despite its success, there have also been
a number of scandals. The firm has been accused of paying salaries below the minimum wage
and exploiting child labor for cheap labor, which sparked a BBC investigation. Additionally,
the company's image has been damaged by the fatal building collapse at Savar and the SOS
letters sewn into the clothing of a Chinese torture victim.

The retail clothes sector of Primark is a participant in the Ethical Trading Initiative, a group
of companies working together to address labor rights concerns in their supply chains. In
fact, Primark created an ethical approach to raise awareness of labor rights concerns inside
its company. The ethical implications of employment for human labor rights must be
articulated in connection to specific rules and codes of behavior. Initiating and defining its
ethical trade strategy in 2006, Primark concentrated on evaluating employees' working
conditions, addressing issues with factory operations, and making essential improvements.
The Ethical Trading Initiative Board should be provided with Primark's yearly report of
activities.

Additionally, Primark is committed to the idea that cooperation and shared learning are two
of the best strategies to move supplier factories forward consistently. However, as Primark
deals with the difficulties given by the global commercial market, the climate both inside
and outside its surroundings evolves. Let's investigate the intricate environment of Primark's
retail clothes sector using PESTLE and SWOT analysis.

While the SWOT analysis helps us evaluate an organization's internal strengths and
weaknesses and further identify threats and opportunities external to its environment, the
PESTLE analysis enables us to investigate the external elements impacting an organization's
environment.

Thus, these techniques enable us to recognize and analyze the good and bad elements
influencing the internal and external environments of a company like Primark.
Furthermore, corporate operations are influenced by the economy, environment,
regulations, and technology, which are all interconnected. The business health of a
particular company, like Primark, may be greatly influenced by the economic stability of a
certain region. On the other side, technology has a significant impact on the state and
growth of corporate operations and marketing initiatives. It creates new trends quickly,
which will obstruct the growth and development of companies if they are not aware of
them.

Primark must thus always evaluate its strategy in light of the PESTLE, which are external
variables that have an impact on both its internal and business operations.

INTERNAL ANALYSIS: SWOT ANALYSIS

Strengths

Being the biggest company in Ireland and being well-diversified into other markets has
allowed the company to build client confidence, especially in public areas. Through
acquisitions and partnerships with other corporate stakeholders, the corporation has grown
its market share. Their ability to market a variety of goods under one roof gives them an
advantage since clients may purchase a variety of goods under one roof. Due to their high
profitability margins and little risk, they are very profitable. Last but not least, the business
has highly qualified management and personnel that are eager to go above and beyond to
ensure their success (Kraft Manfred and Mantrala Murali K., 2006).

Weaknesses

Due to the financial crisis, the Company's return on capital employed and sales have
decreased. Due to obstacles in those areas or because the parent firm operates in those
nations, they will likewise have trouble breaking into overseas markets. In the same market,
they also work with extremely profitable businesses and organizations with significant
financial investments. As opposed to stockholders, the corporation has raised money from its
banks (Easy M., 2002).

Opportunities

Through carefully positioned outlays, the Company has been gaining market share. They
have also been keeping an eye on how consumers' lifestyles are evolving. To stay competitive
and fight off market rivalry, the corporation has embraced innovative technology.
 STRENGTHS WEAKNESSES

 Primark is a premium retail chain that  Limited market share growth is a result of the
employs more than 50,000 people worldwide. premium fashion industry's fierce rivalry.
 outsourcing the production of clothing
 It has a wide selection of apparel, including controversy about poor pay
men's and women's clothing, footwear  Quality problems
accessories, hosiery, and home wear.

 The company is well-represented in Europe,

with more than 500 locations.

 The corporation generates about $7 billion in

revenue each year.

OPPORTUINITIES THREATS

 Primark may keep concentrating on Europe,  Rather little global footprint to the international
Asia, and America by expanding its shop count in players
several places.
 In comparison to some of its biggest competitors,
 Partnerships and acquisitions can aid in the the company's brand recall is a little bit lower.
company's business growth.
 Due of consumer restrictions, economic crises
 The corporation may increase income by like recessions or pandemics can cause
expanding its product line and using the internet businesses to fail.
as a sales channel.


EXTERNAL ANALYSIS

We must take into account a variety of aspects while evaluating the political, social, and
economic elements outside of Primark's surroundings. Government laws and regulations have
an impact on Primark's corporate operations. The business organization should adhere to the
rules and regulations set forth and enforced by the government and bodies responsible for
making policy. In addition to adhering to the rules and regulations, the organization should
take on social responsibility as required by the general public. Business sectors are becoming
heavily involved in social initiatives to advance social awareness and equality rather of
focusing on producing linkages of profits and income. It's crucial to take into account the
cultural and social preferences of various clients when starting a business or expanding it in
the global market.

Economic factors

While the UK's choice to leave the EU has caused uncertainty in the economic climate
and financial markets, Associated British Foods pointed out that the depreciation of the
Sterling since the referendum vote has had beneficial effects. For instance, if the present
currency rates hold, Primark and other apparel merchants will gain from translation
for the rest of the fiscal year (McGregor 2016).

Social factors

expanding plus-size fashion

The UK's aging population and growing obesity rates may be the two sociocultural trends
that many clothes companies must contend with the most. The UK is currently known as the
"fat man of Europe," with over 7 out of 10 British men and 6 out of 10 British women being
classified as obese or overweight, according to the NHS (2015). Due to a lack of plus size
ranges and sizes, many fat female customers avoid shopping at particular establishments.

Some well-known brands, like Zara and Top Shop, still don't carry plus-size collections,
which is proof of this. However, growing obesity rates actually create a significant gap
market opportunity for apparel businesses (like Primark) that can serve customers who are
plus size (Mintel 2015). Apparel stores need to start investing in plus size clothing collections
since by 2050, it's expected that half of the UK population will be fat (NHS 2015).

UK population aging

The Office for National Statistics claims that the aging population is significantly changing
the UK's demographic and labor dynamics. The median age of the UK population increased
from 33.9 years in 1974 to 40.0 years in 2014, a 40-year span, which is the age at which half
the population is younger and half the population is older (ONS 2015).

For instance, the UK anticipates double-digit increase in the population of people aged 55 to
64 by 2019, with the proportion of those over 65 approaching over a fifth of the country's
total population (2015). But according to statistics, the aging population also presents
business opportunities because people in their retirement years tend to earn more money
because they continue to work full-time jobs for longer periods of time, increasing their
disposable income.

It's interesting to note that 60% of people aged 55 to 64 purchase online for clothing,
demonstrating the importance of this trend and possibilities for development.

technical aspects

As illustrated by the advent of online Pureplay like Amazon, Asos, Boohoo, and others, the
accelerated development and expansion of e-commerce is continuing to increase competition
for established brick and mortar firms in the UK apparel retail industry. Due to its relative
simplicity and inexpensive operational foundation, this new distribution channel is allowing
for more competition in the market. The fact that a conventional Brick and Motor apparel
shop like Primark doesn’t maintain an ecommerce website puts it exposed to a drop in store
sales as such technology innovations continue to influence the retail environment (Mintel
2015). (Mintel 2015).

external variables

The rise of ethically and environmentally conscious customers, who persistently demand
businesses adopt practices like paper packaging and the use of recycled materials, is one of
the recent trends that is influencing the UK clothing retail industry. Sustainable clothing lines
produced from organic cotton and other ecologically friendly materials have already been
introduced by several companies, such H&M. Additionally, the government is exerting
pressure on many stores by requiring appropriate garbage disposal.

Legal

The introduction of new workplace pensions legislation, which requires all businesses to
contribute 3% to their employees' workplace pensions for eligible British workers, is one of
the most recent employment regulations that has an impact on the clothing retail industry in
the UK (Department for Business, Innovation & Skills 2016).

TOWS ANALYSIS

STRENGTH-WEAKNESSES WEAKNESSES-OPPORTUNITIES

 Keeping management costs low and  Create a new customer website for all
cutting the price of operational markets.
procedures.  The materials used to make clothing
 managing customer problems properly should be acquired responsibly or
 Improving the quality of employees' through recycling.
lives

STRENGTH-THREATS WEAKNESSEES-THREATS

 make more eco-friendly clothing  Reduce fashion waste, halve carbon

accessible to everybody. emissions along the value chain, and
enhance employee well-being
 adding in-store food and beverage and
cosmetic businesses to create a  There should be global expansions
complete shopping destination and new store openin

RECOMMENDED STRATEGIC OPTIONS

Chemicals And Materials outsourcing

Primark joined the Zero Discharge of Hazardous Chemicals project and Greenpeace's
Global Detox Campaign in 2014, pledging to phase out specific hazardous chemicals by
2020. (ZDHC). This group developed a list of compounds to stay away from, audit
protocol tools, and wastewater recommendations. Additionally, Primark supports the
Partnership for Cleaner Textile Industry (PaCT), a program that aids Bangladeshi
textile manufacturers in using more eco-friendly production techniques.

The year 2020 is now in the past. Greenpeace considers the campaign to be a success
overall since all committed businesses have made advancements in chemical control.
This does not, however, imply that Primark is now a non-toxic brand. According to
their 2020 environmental report, "more can be done."

DEVELOPING MODELS

When Primark's business model calls for massive quantities of disposable apparel made
from synthetic fabrics and possibly harmful substances in unregulated supply chains
and offered at extremely low costs, no number of incremental improvements or internal
changes can, in the end, suffice. Cheap pricing stimulate impulsive purchases, frequent
consumption, and less thought, which eventually leads to increased waste and landfill
garbage. Primark isn't the only company doing this, but when it comes to high street
fashion businesses, they rank among the top three in terms of stock volume.

The fast-fashion business model is intrinsically immoral since it depends on taking

advantage of others and the environment in order to generate money. Top managers
take advantage of and pay poorly paid garment employees so they may profit.

Primark appears to be making an effort in certain areas, but this can't enough until the
concept is fundamentally altered. Primark won't ever be considered morally or
environmentally sound till that time.

REFERENCES

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Butler, Sarah (2014) “Primark to pay £6m more to victims of Rana Plaza factory in
Bangladesh”

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victims-rana-plaza-bangladesh

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fashionvictims.
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[Accessed 20 July 2016]

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

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

NHS (2015) “Britain: 'the fat man of Europe'” [Online] at

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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
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CITATIONS

HARVARD

Jonathan Kush (2017) "Pestle and Swot Analysis of Primark 2016-2017" 123 Writing
[Online] at https://www.123writing.com/free-sample/pestle-and-swot-analysis-of-primark-
2016-2017