HOLBOR COLLEGE

PRE-MBA
Student Name: Jagannath Masurkar

Student No.: 0800440.

Module Name: Managing in Business

Environment

Module code: HCBU5003

Module Leader: Paul Booth.

Introduction – Primark.
 Primark Stores Limited is a clothes and linens retailer in
the UK and Republic of Ireland with over 187 branches.

 It is a subsidiary of Associated British Foods plc. which is

a diversified international food, ingredients and retail
group.

 TNS ranks Primark as the second largest clothing retailer

in G.B. by volume in terms of market share.

 It was voted by the GMTV and ITV viewers as the “Best

Value High Street Fashion” and it was placed as the
leading retailer in value clothing by the Verdict Research.
S.W.O.T. Analysis of Primark
Strength
 Primark offers high street quality clothes for cheap prices and quality
services to attract its customers and it also provides clothing for all
ages and sexes.
 The company is part of the ETI (Ethical Trading Initiative) which
focuses on worker’s rights, their production of goods and bringing
businesses together to work on labour rights issues.
 TNS ranks Primark as Great Britain’s second largest clothing retailer
by Volume in terms of market share.

Weakness
 Primark has little in terms of expression and communication as it does
not advertise which is an advantage to its competitor’s.
 Other issues were with poor working conditions and disvaluing
workers rights.
S.W.O.T Analysis Contd…
Opportunities
 To provide high quality clothes to fashion conscious people.

 They now have an opportunity to share their high quality products and
services overseas.

Threats
 The company can also have problems in the area of advertising as
they do not have any advertising whilst their competitors do.

 Primark’s threats are the competition with other companies such as

M&S, Next, Zara and H&M etc. who are already very well established.
P.E.S.T. Analysis of Primark
Political Factors
 Primark’s business operations are the aid of government policies and
regulation for example providing proper working environment for their
workers.
 For dealing with workers and for improving their working conditions,
the company is part of the Ethical Trading Initiative (ETI).
 Primark’s energy consumption in UK is sourced against the green
power generated and sold into the grid by British Sugar.

Economical Factors
 The company targets the young Consumer’s especially the under 35’s.
 In 2008, Primark has now opened over 12 new stores and has now
moved its business around Europe.
P.E.S.T. Analysis Contd…
Social Factors
 Primark has received several awards for being value retailer of the
year and UK retailer of the year.
 It now operates from 5.4 million sq ft of selling space which gives it
the advantage of providing more goods and services.

Technological Factors
 In Primark's bid for world class, cutting edge management of its ethical auditing
programme, it has signed a deal with BSI Management Systems for the
provision of Entropy Software.
 The investment in Entropy Software is a key part of Primark's ethical trade
strategy, allowing all supplier audits, non-conformances and remedial actions to
be managed through the Entropy Software platform, with much greater global
visibility and management control.
Porter’s Five Forces Analysis

Threat of New Entrants

The threat of new entrants is ‘LOW’ for Primark because of the high
cost setup.

Power of the Supplier

Primark does not rely on one big supplier rather they have number of
smaller ones. And so here the bargaining power of suppliers is ‘LOW’
with Primark.

Power of the Buyer

Degree of Buyers power is ‘HIGH’, as there are multi players in the
market and now customer are more sensitive towards the price so they
visit every shop and then make decision and the switching cost is also
not too high.
Porter’s Five Forces Contd…
Competitive rivalry
Competitive rivalry is “HIGH” in case of Primark as there are number of
similar size players in the market with offering similar product and due
to high cost on exit (Exit barrier).

Threat of the Substitutes

Threat of substitutes is “HIGH” because other company are offering
similar products with low price and now it is very easy for customer to
switch from one product to other as they have become more choosey.
Identification of recent development in
the organisation’s macro environment

 Price inflation is one of the foremost aspect which has a impact

in the recent development in the organisation’s macro-
environment.

 In the organisation’s macro-environment, Format development

is also an important issue which trails multi-format single
brand strategy which will be exported to its operations in
different sectors.
Impact of environmental changes on
strategic direction of the organisation
 It no longer targets exclusively the low income customer, and now says
that its primary target market is “young, fashion conscious under 35s”
who want fashionable clothing at competitive prices.
 Fast product design and innovation, effective brand differentiation,
excellent customer service and a positive shopping experience are all
essential for the success against established companies.
 Attracting high quality staff with a range of retailing skills and
experience.
 Publicity featuring celebrities wearing Primark clothing.
 An organisational culture that places a much greater emphasis on good
customer service.
 By being the member of Ethical Trading Initiative (ETI), Primark has
committed to monitoring and progressively improving working
conditions in the factories that supply Primark’s merchandise.
Conclusion
 Primark can easily expand and diversify, giving its rivals a competitive
environment with substantial financial power.

 Primark’s offer to the customer is one of high-quality merchandise, at

value for money, backed by Primark’s service promise.

 A strong consumer proposition has been developed by Primark brand

and embodied in the line “Look Good, Pay Less”.

 This research can be concluded by mentioning that the UK Clothing

retail industry is facing high levels of competition between various
players. But the end result shows, the consumers are most benefited
from it.
References

Book References

 Kotler.P. (2005), Principles of Marketing, 4th European edition, Prentice

Hall Europe.
 Haberberg A and Rieple A (2001), The Strategic Management of
Organization, p: 133. Financial Times/ Prentice Hall

Web References

 http://www.primark.co.uk/
 http://news.bbc.co.uk
 http://fashion-branding.blogspot.com
Thank You ……………….