Primark's Retail Strategy Analysis

This assignment analyzes Primark's retail strategy, specifically highlighting its focus on low-cost fashion. It examines how Primark leverages its supply chain and technology to maintain competitive pricing while addressing consumer perceptions and ethical considerations. The analysis also explores the impact of innovation on Primark's business model and future prospects.

MANAGING INFORMATION AND
TECHNOLOGY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
PRIMARK ITS CURRENT BUSINESS STRATEGY AND PRODUCTS AND SERVICES......3
Overview of Organisation ..........................................................................................................3
Current business strategy............................................................................................................3
Companies products and services...............................................................................................4
PORTER'S FIVE FORCE ANALYSIS...........................................................................................5
PORTER'S VALUE CHAIN...........................................................................................................7
Strength and weakness................................................................................................................8
BUSINESS TO DEPLOY INFORMATION TECHNOLOGY......................................................9
CONCLUSION.............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
Managing information technology is a discipline where all the information technology
resources of a firm are managed according to the organization's needs and priorities. In
assignment is completely based upon Primark Company and will outline all the tasks such as
companies business strategies, its products and services, porters five force model for analysing
competitive environment of Primark, primary activities of primary will be analysed by porters
value chain, analysis of both strength and weakness of the company and lastly way company can
deploy innovative ideas in their business processes.
PRIMARK ITS CURRENT BUSINESS STRATEGY AND PRODUCTS AND
SERVICES
Overview of Organisation
Primark is an Irish fashion retail store and subsidiary of ABF, headquartered in Dublin. Its
first store was founded on 13 June 1969 by a Weston family. Primark has their stores at almost
locations and mostly serves countries like Austria, France, Belgium, Ireland, Germany,
Netherlands, Italy, Spain, Portugal, United States and United Kingdom. It has more than 70,000
employees all around the world with more than 350 stores globally. It is a retail organization
which sells Clothes, cosmetics and housewares (Cook, 2018). Till now Primark has almost 350
stores in more than 10 countries and are still growing.
Current business strategy
Business strategies are a set of written statements that are used by the company in order
to achieve its set goals, so that they can meet their customers’ expectations and gain competitive
advantage in the market. Business strategies are needed by every company so that the can fill the
void in their company and can satisfy their customers’ needs in order to draw profit. Different
companies have different business strategies for success. Strategic market focus on different
ways of developing competitive advantage through different drivers of shareholders. Without
marketing or business an organization can waste their resources, miss opportunities or in the
worst-case scenario it can threaten their survival in the market place.
Business strategies used by Primark are:
 Low pricing competitive pricing strategy is being used by the company.
 They do not believe in investing more money on advertising.
 They use pull strategy for sales promotion.

Further these business strategies are explained below in details.
Likewise, Primark a fashion retail organization also has its own business, marketing
strategies. Primark business strategy is based on their main corporate mission which are:
sourcing products effectively, making cloths with simpler design, use local fabrics and trims,
focusing on the most popular size, not to spend heavily on advertising and allow large volume
buying. Primark has an effective supply chain which is combined with manufacturing of
different countries to various parts of the world.
Its main objective is to be a profitable, sustainable organization that can satisfy their
customers’ needs and requirements. Primark business strategies has helped them to capture
customers confidence which reduces their risk in business. They have built a roadmap towards
attaining their both long- and short-term plans, goals and objectives. Their basic business
strategy is to remain loyal towards their customers, increase transparency in their business,
increase sustainability so that they can smoothly complete all of their business practises and fulfil
all the commitments they have made towards their customers as well as towards their employees
(Arriaga, Andreu Domingo and Berlanga Silvente, 2017). They have created such a loyalty in
their brand that their customers are continuously increasing as well as demand for their clothes is
also increasing. Recently they have also started online shopping for their customers with home
delivery. This business strategy has helped them to gain more customers in order to increase their
customer base.
Companies products and services
Primark sells wide variety of fashion products such as clothing, accessories, beauty
products like cosmetics, footwear's, housewares, confectionery, etc. for children, kids, men,
women. Recently Primark has welcomes Sephora products which are being sold at a starting
price of £1. They sell their clothes at the lowest price possible i.e. below market prices which
attract their customers in many ways.
Primark has tied up with fashion brands such as Zara, H&M and has taken a step towards
contribution to contemporary fast fashion trend. They have also started providing home delivery
service for their online shopping customers who buy their products online. They provide trendy
clothes available at all the prices at lowest prices which attract many customers. All these things
have resulted in a new and fast kind of fashion which forces their customers to heap of items

from their stores at much cheaper prices. They always try to bring new trendy, designer clothing
for their customers frequently (Costa, Bairrada and Oliveira, 2017).
PORTER'S FIVE FORCE ANALYSIS
Porters five force analysis is a tool which is used to analyse competition for the business.
It consists of five forces that determine competition intensity, attractiveness of an industry in
terms of profitability, stability as compared to the current completion present in the market. Its
five forces that are used for analysis are: threat to the new entrant, threat of substitution,
bargaining power of customers, bargaining power of suppliers and competitive rivalry. Here,
porters five force analysis of Primark Company will be done in order to analysis the competitive
environment of the organization.
 Threat to new entry: Profitability in any business attract new emerging entrants. New
entrant needs lots of investment in business, need to put lots of efforts in promotion of
their brand and need to work on attracting customers by providing them with different
types of offers, coupons as today competition in retail industry has grown in many ways.
Threat of threat to new entry is much lower for Primark as it is already an established
organization which operates in more than 12 countries. As it is already known that there
are various risks when a new entrant enters the market, this threat is for both the entrant
as well as their competitors. It will be tough for new emerging entrants to compete with
Primark as they have already established a brand image in various countries. However,
new entrants can be a threat for Primark in other developing countries where their brand
is still unknown. In this scenario they need to strengthen their marketing strategies in
various ways so that the force of threat of new entry is weak for Primark globally
(Fontes, Bairrada and Oliveira, 2017).
 Threat of substitution: Threat to substitution also has a weak force intensity in affecting
the retail industry environment of Primark, as they provide the latest trendy clothes at
lowest price. Primark offer wide variety of products that have few substitutes. The
external factors that might affect primary can be moderate availability of substitutes, low
variety of substitutes and high cost of substitute. But one of the main reasons that lowers
the force or impact of threat of substitute for Primark is their products price that they
offer lower than market price of that product. However, some substitute available to
Primark products are good with lower cost but not as much as compared to Primark. Most

of the substitute products available in the market have higher cost and lower quality
which supports competitive advantage of Primark.
 Bargaining power of suppliers: Bargaining power of suppliers also has a weak force of
Primark. There are many suppliers in this retail industry and large organizations like
Primark can easily affect these suppliers as Primark as many suppliers who can be easily
be replace by other suppliers which reduces their force on Primark. Outside factors that
can affect these bargaining powers are: large population of suppliers, tough competition
among suppliers, huge availability of supply. All these factors reduce the impact of
suppliers on the retail company and do not affect strategic growth of the company. In
other words, it can be said that availability of suppliers makes it difficult for suppliers to
impact the work or strategic growth of Primark.
 Bargaining power of customers: Bargaining power of customers has a moderate effect
on Primark company. Buyers are one of the most important part of business to grow.
However, due to large diversity of buyers reduces the effect of their force on the
organizations. External factors that affects the power of buyers are: large and diverse
population of consumers, size of individual purchase. High diversity of buyers makes it
difficult for customers to strengthen their force on the company or influence the business
of the organization. The main factor that influence the power of buyer is their level of
capacity of purchasing as well as their intensity of purchasing. It can further be explained
as there are high diversity of buyers who buy companies product and if few of them stop
buying products from the company then it will not affect the overall progress of the
business.
 Competitive rivalry: Force of competition rivalry is strong in retail industry for Primark.
There are many organizations of various size that compete against each other in this
industry. There are various factors that has the most significant effect on Primark's
strategic movements which are: large number of firms in retail sector, large variety of
products by retail organizations and high aggressiveness of retail companies. These
external factors have a strong impact on the organizations' growth as availability of large
number of firms strengthen the competitive rivalry. These high variety of organizations
imposes a challenge in development of competitive advantages for Primark.

So if overall impact of these forces is seen then only competitive rivalry has a strong force on
Primark, Bargaining power of customers has a moderate impact on the organization and others
have weak force impact on the company.
PORTER'S VALUE CHAIN
Porters value chain is a set of activities and systems that a company operates in, so that
they can deliver a valuable service or product for the market. This concept was first developed
by Michael Porter. In other words it can be sad as a collection of activities performed by an
organization in order to create value for their customers (Koc and Bozdag, 2017). Here, analysis
of two primary activities and two support activities of porters value chain for Primark Company
will be done.
Primary activities
 Sales and marketing: One of the main primary activity of Primark Company is sales and
marketing of their products. They use different processes or methods for marketing and
sales of their products. They sell their products to the customers and manage as well as
generate relationship with their customers.
 Logistics: Logistics is another important primary activity of Primark. It is further divided
into inbound and outbound logistics. In inbound logistics they receive all the materials
from their suppliers and store as well as internally distribute those products or materials.
In outbound logistics they deliver all the products to their stores as well as to the
customers for them to buy their products.
Support Activities
 Infrastructure: Company infrastructure is one of the main support activity of Primark.
Infrastructure helps the organization to maintain their daily operations in an appropriate
manner (Ayers and Odegaard, 2017). This also helps them in maintaining all the financial
management, handle administration etc.
 Human Resource management: Another one of the most important support activity of
Primark company is its HRM. In this development of workforce or employees within the
organization is done like recruiting employees, training all the employees etc. Human
resource management also helps the company in maintaining good working conditions by
managing and maintaining good employee relations within the organization.

Strength and weakness
Strength and weakness of Primark Company will be explained with the help of SWOT
analysis. It is a strategic planning technique used to identify all the strength, weakness,
opportunities and threats related to all the business processes and competition in the market.
Strength
 One of the major strength of Primark Company is that it has more than 70,000 employees
globally.
 They have more than 350 stores all over the world.
 They offer good quality of products at a very affordable price.
 It has excessive range of clothings, accessories, footwear's etc.
 They sell their products at comparatively lower price than the market which is the main
reason customers get attracted towards its products (Reinartz, Wiegand and Imschloss,
2019).
 It has increased their ethical programs much bigger by increasing their business in more
than 7 countries which has eventually helped them to source sustainable goods or
products.
 They have no advertising cost as they completely rely on Word-of-mouth advertising.
 This low price strategy, advertising helps them to increase their sales year on year.
 Always try to involve themselves in social service by helping people involved in any kind
of disaster etc.
 They also have very strong presence in Europe with more than 300 stores present all
across the Europe.
Weakness
 Due to Brexit or slow economic growth of Europe they had held back themselves as well
as the profit of the overall group.
 As most of the manufacturing of their products is outsourced they face inconsistencies
within the quality of their products.
 As Primark do not advertise, they give a huge advantage to their competitors directly.
 Poor working conditions as well as disrespecting workers rights is one of the main issue
faced by the company (Ali, 2016).

 Despite being a member of ethical trading initiative member, there has been many
negative reports about their business which concerns about their goods. There had been a
rumour that Primark used child labour in order to produce their goods or products.
 They had been facing competition by many companies who are using low price strategy
as their main strategy which is holding back their sales of the products.
BUSINESS TO DEPLOY INFORMATION TECHNOLOGY
There are many ways in which Primark can deploy IT in their business processes in order
to enhance themselves in this competitive market.
 By using cloud based software that can be used to manage and tract inventories in real
time: This cloud based software will help the organization to understand customers
behaviour as well as will be able to maintain their supply chain properly. It is also help
the organization in improving and managing sales of their products. With the help of this
software company will easily able to track all the changes in their inventories, all the
changes in the demand, allows them to easily respond to the changes in the latest demand
as well as can adopt all the seasonal changes in the trend (Kurnia and et.al., 2015).
 In order to track inventory or stock level Company can use source tagging or RFID: it can
help the organization in improving their supply chain management by monitoring their
products from the movement they leave the warehouse through various software such as
point of sales. With the help of this company can deploy different kinds of tagging
solution which can help them in managing their warehouse and sales. Business decisions
can be taken much easily when all the inventory details are known to the organization.
In order to gain visibility in the supply chain RFID can be implemented which help the
organization to know the exact location of their products through various standards such as EPC
(electronic product code) enabled RFID (radio frequency identification). This increases the
accuracy of tracking inventory items by 99%.
 Using Analytics can also help in understanding customers: Use and study of analytics can
help in understanding all the information regarding customers, customer's traffic,
personal details, their shopping schedule etc. With the help of this major decisions can be
taken by the company in order to improve customers experience. All the customer data,
information can be tracked or shared with the organization in real time (Laudon and
Traver, 2016).

 By customizing and automating customer's experience through Artificial Intelligence: In
retail sector Artificial intelligence plays an important role customizing and automating
retail experience of the customers by making shopping much easier. Implementation of
AI can help Primark to build cashier less stores. They can build completely automated
retail stores which can help them in eliminating check-in or checkout lines for customers.
 Facial recognition: It can help in the organization in understanding all the preferences of
the customers. These facial expression can help the organization to understand where
customers get attracted to within the store mostly and with the help of these
demographics of customers can be determined as well theft in the store can also be
prevented. This will also help the company to understand and make changes in the layout
of the store in order to increase the sales in the store (Basker, 2016).
 HR and payroll software: can also help the organization to compile and streamline all the
HR processes like management, payroll etc. It helps in understanding all the important
processes and their flow within the organization which help helps the human resource in
the company to manage all the employees within the organization globally and all the
other HR related function within the business.
 Implementing robotics within the stores: Implementing robotics within the stores can
help the company in managing all the stores smoothly where robots can manage complete
supply chain, counters, monitoring security of the store, home delivery for the customers
etc. this innovation can help the organization to maintain their stores automatically
without any help even more efficiently.
 Implementing argumented reality: Argumented reality is also being used in many stores
today. With the help of this argument reality technology within the stores, customers can
easily and virtually try cloths or test products on them. By applying filters over live
selfies customers can use and see all the make-up products or try any cloths on them
without actually using or trying it (Esbjerg and et.al., 2016).
CONCLUSION
From the above assignment it has been concluded that Primark has various business
strategies such as low price strategy, no advertisement etc. with the help of which they sell their
products and services. With the help of porters five force model All the internal as well as
external threats of Primark had been identified. Two main primary and two support activities in

porters value chain of Primark are sales and marketing, logistics as primary and Human resource
management, infrastructure as support activities. At last many ways had been identified through
which information technology and innovative ideas can be deployed in their business.

REFERENCES
Books and Journals
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of retail and distribution, pp.38-53.
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the Institute of British Geographers. 43(3). pp.477-495.
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Laudon, K.C. and Traver, C.G., 2016. E-commerce: business, technology, society.
Reinartz, W., Wiegand, N. and Imschloss, M., 2019. The impact of digital transformation on the
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