Strategic Management Analysis of Primark

This report provides a strategic management analysis of Primark, a fashion retail organization in the UK. It includes an analysis of the different types of organizations, their legal structures, and the relationship between organizational functions and objectives. The report also includes a PESTLE and SWOT analysis of Primark's external and internal environment.

Running head: STRATEGIC MANAGEMENT ANALYSIS OF PRIMARK
STRATEGIC MANAGEMENT ANALYSIS OF PRIMARK
Name of the Student
Name of the University
Author Note

1STRATEGIC MANAGEMENT ANALYSIS OF PRIMARK
Task 1
Introduction
The study that will be made in the report will be mainly built on the organization
named Primark Fashion which operates in the retail industry of the United Kingdom. The
most significant quality of the company is thereby built on the methods by which the firm is
able to provide the latest and trendy products at lowest prices. The company thereby
manufactures different types of merchandise for the purpose of fulfilling the needs and the
demands of the consumers (Primark.com 2018). Primark was established in the year 1969 in
Ireland by Micela Mitchell and Arther Ryan. The firm had been able to grow in an effective
way the help of its own brand based stores and the business centres that are located in the
regional and the local areas as well. The international and domestic expansion based process
of the company has thereby led to the opening more than 300 stores in the world and the 184
stores in the United Kingdom (Primark.com 2018).
Different purposes and types of organizations: public, private and voluntary sectors,
legal structures
The organizations that are mainly set up for the purpose of making profit in the
industry are not affected by their size and the scope of their operations in the industry. The
different sizes of the organizations mainly include, small sized, medium sized and large sized.
The factors that are mainly used for the purpose of distinguishing between these
organizations are mainly related to the number of owners, the number of employees and the
number of shareholders are developed by them in the industry (Barros, Hernangómez and
Martin-Cruz 2016). The legal status of the company is also an important factor which is used
for the analysing the differences that exist between the different types of organizations.

2STRATEGIC MANAGEMENT ANALYSIS OF PRIMARK
The different types of organizations and businesses based on their size mainly
include,
 The partnerships
 The sole traders
 The companies
 The charity based organizations
 The franchising based organizations
The partnerships are those types of companies which contain two to twenty partners.
According to the partnership based act which has been established in the year 2002 the
process of partnership has been made legal for some types of organizations (Begg 2013). For
example, the large accountancy based firms have more number of partners who enjoy high
levels of liability. The people who are thereby involved in the business partnerships are able
to share the workload levels and the skill. The financial capital of the company is also raised
quite easily with the help of different partners in an active way. The development of
partnership is thereby based on the deed based on partnership which is completed under a
solicitor. The significant details that are related to the deed are thereby provided at the time of
development of the deed (BPP learning Media 2013).
The sole traders are those who are able to conduct huge number of activities. Most of
the sole traders operate within the construction based sectors of different countries all over
the world. The levels of complications which are involved in the partnerships that are
developed among the sole traders are quite low. The sole traders are thereby able to maintain
close levels of contact with the customers. The profits that are made by the business
organizations are also transferred to the sole traders which is a major advantage that has been
gained by them (Chienwittayakun and Mankin 2015). On the other hand, a major

3STRATEGIC MANAGEMENT ANALYSIS OF PRIMARK
disadvantage of the sole traders is that they need to take the entire responsibility of the
business organizations. The sole traders thereby need to work much more longer and harder
as compared to the other types of business organizations.
The companies on the other hand are those entities that are owned in an effective
manner by the shareholders. The directors of the business and thereby responsible for
providing direction to the operations that are performed by the organizations. The companies
are considered to be legal entities which have their own individual rights and they are also
separate from each other. The shareholders of the company can put funds within the business
in order to conduct the business operations effectively (Cosenz and Noto 2016).
The franchising based processes are those which are implemented by the companies
which have a value of their brand in the industry. The process of franchising has been able to
affect the brand based values of the company. This business method is becoming much more
popular in the current business based environment. This model is able to influence the
methods by which the business organizations are able to increase their awareness in the
industry (Daniels, Radebaugh and Sullivan 2012). The organization which sells the franchise
is known as the franchisor and the company which sells out the franchise is known as the
franchisee. The benefits that are received by the franchisee from different trading based
activities help them to enjoy the levels of monopoly in the industry. The training based
process are organized by the franchisors so that the different franchise operations can be
conducted in an effective manner (Durand, Grant and Madsen 2017).
The charity based companies can also be termed as the non-profit organizations. The
organizations can thereby operate on a public and private level as well. These organizations
are thereby able to operate in such a manner which are able to provide effective support for
the public interest. The different factors that are able to affect the charity business operations

4STRATEGIC MANAGEMENT ANALYSIS OF PRIMARK
are related to the location of the charity and legal definition as well. The tax based
implications of the charity are able to affect the functioning of the charitable organizations in
an effective way (Ethiraj, Gambardella and Helfat 2017).
Scope and size of the different types of organizations
According to Fratričová and Rudy (2015), the business operations that are conducted
by the sole traders are quite small in size and is able to create self-employment based
opportunities for owners. The business operations related to sole traders are thereby helpful
for the people so that they are able to develop work based opportunities. The services can be
provided by the sole traders to the larger organizations and the individuals as well. The scope
of business of the sole traders is based on a simple structure that is helpful for the
entrepreneur so that he is able to bring effective levels of capital. The different roles that are
thereby played by the company mainly include, controller, operator, financier, decision
maker and responsible for the failures and the success of business based operations.
As discussed by Gallus and Frey (2016), the partnership related business operations
are conducted with the help of two or more than two people. The partnerships that are
developed by the individuals have unlimited levels of liability based on the debts that are
thereby incurred by an organization. The different types of partnerships which are developed
within the profit based organizations include, the limited partnerships, the general
partnerships and the limited liability based partnerships. The partners in this case are thereby
able to take the decisions based on the suitable steps which can be taken for the different
affairs of the business. The structure of business operations of the partnership organizations is
also considered to be quite effective and simple in nature.
The companies are considered to be those types of organizations that contain around
2 to 200 shareholders. The total number of shareholders are able to determine the size of the

5STRATEGIC MANAGEMENT ANALYSIS OF PRIMARK
companies. The companies which contain least number of shareholders are considered to be
small in size and those which contain more number of shareholders are thereby considered to
be quite large in size (Gans and Ryall 2017).
The franchise is considered to be a system in which the entrepreneurs are able to
purchase the different rights which are essential for opening and further running the business
based operations of the larger companies. The process of franchising is quite widespread in
the United States. This is able to deliver effective chances to the different organizations in
order to function in an effective way (Hanson et al. 2016).
The charitable organizations are those which is considered to be non-profit based
organizations. These organizations are quite different from the normal non-profit
organizations. The NPOs are mainly based on the different philanthropic goals which include
the social well-being, educational, charitable operations, religious, charitable operations and
religious operations. The charitable organizations thereby depend on the donations that are
provided to the different non-profit based organizations (Hill, Jones and Schilling 2014).
Relationship between organizational functions and their link with organizational
objectives
According to Hill, Jones and Schilling (2015), the organizations in the modern
business environment need to perform different functions that are based on the methods by
which they are able to sell their products and services. The six major functions which are able
to affect the business operations that are conducted by the organizations are as follows,
The production process and design
The finance related operations
The human resource based operations
Marketing and sales based operations

6STRATEGIC MANAGEMENT ANALYSIS OF PRIMARK
Administration operations
Development and research
As discussed by James (2016), the different functions that are thereby conducted by
the organizations are able to affect the processes of the companies in an effective way. The
different functions of the companies are affected by the ways they are able to work together
in an effective manner. The levels of communications that thereby exist between the
functions are further able to develop the effective objectives of the company. The objectives
thereby need to be divided in order to relate them to specific functions of the company. The
regular reviews are thereby required in order to decide the ways by which different functions
are performed in an effective manner.
According to Johnsen (2015), the overall objective of the functions is built on the
ways by which the company can be provided with an active direction. The proper
development of the products or the services of modern companies are based on the methods
by which the functions of the company are completed effectively. The development of
financial operations of the organizations are also affected in a huge manner by the different
functions. The human resources of the companies are required to be considered for the
employment process. The functions that are thereby performed by the organizations are also
based on the effective communication between the different functions that include, the
finance department and the administration of the organization as well.
For example, in case of Primark the production process and design based activities are
able to play a key part in the effective revenue generation based process of the company. The
marketing based function is able to provide effective levels of information to the customers
based on the services and products of the company. The activities related to marketing are
able to affect the relationships that are developed between the organizations. The expenditure

7STRATEGIC MANAGEMENT ANALYSIS OF PRIMARK
or the effective usage of resources is a significant factor which is able to influence the finance
based processes of the company (Lasserre 2017).
As discussed by Merigó (2015), the human resource management process also plays
an important role in the operating process that is conducted by Primark in the fashion retail
based industry of the United Kingdom. The strategic plans and objectives that are thereby
developed by the company are affected by the integration of different functions that are
conducted by Primark Fashion.
Figure 1 – Relationship between structure and business functions
Source – (Merigó 2015)
Conclusion
The report can be settled by stating that the diverse types of organizations that operate
in the industry are developed with the help of different legal structures. The size and the
scope of the organizations are analysed in an effective manner. The three different types of
organizations which are thereby analysed with the help of this report mainly include, the

8STRATEGIC MANAGEMENT ANALYSIS OF PRIMARK
public organizations, the private organizations and the voluntary types of organizations as
well. The analysis has also been able to provide effective picture based on the ways by which
the functions of the organizations can be linked with the different organizational objectives
and the structure which has been developed by the organizations as well.
Task 2
Introduction
The macro environment based aspects are able to affect the processes of the
organizations in an effective way. The external factors can have an impact in the revenues
and profitability based levels of the modern organizations. The company that has been
considered for the examination is Primark which operates in the fashion industry of the
United Kingdom. The environment of the company will be examined with the help of the
PESTLE framework. On the other hand, the SWOT framework will be used for the purpose
of analysing the internal environment of the organization. The external and the internal
environment of the company will thereby be linked in order to analyse the objectives of
Primark in an effective manner (Michael, Storey and Thomas 2017).
Positive and negative impacts of macro environment on the business operations
PESTLE analysis of Primark Fashion
Political factors – The United Kingdom had voted to leave European Union in the
year 2016. This step had been able to affect the economic and political environment of the
country in a huge manner. The regulations that are followed by the United Kingdom and the
trade activities are mainly based on those which have been developed by the European
Union. The exit from EU has however made huge number of changes in the different trade
related factors which have influenced the policies in the United Kingdom. The Brexit based

9STRATEGIC MANAGEMENT ANALYSIS OF PRIMARK
process has been able to cause high levels of uncertainty for the different business
organizations that have their operations in the United Kingdom (Morschett, Schramm-Klein
and Zentes 2015). The fashion retail organizations like Primark Fashion have been able to
benefit in an effective manner from the weak pound. On the other hand, the parent company
of the organization named ABF has been affected in an adverse manner by the exit of the
United Kingdom from the EU. The parent company of Primark has mainly noted that the
Brexit process can have a negative effect on profit based margins on the sales of the company
in the UK (Nickols 2016).
Economic factors – The Brexit implementation in the European Union has affected
the value of pound in a huge manner. The value of the currency of the UK has plunged to the
lowest which has further led to a huge turmoil in the country. The financial turmoil had a
major pressure on the status which has been developed by London as the financial hub of the
European Union (Palmer and Hartley 2011). The parent company of Primark has thereby
indicated that the decision that has been taken by the United Kingdom to leave EU has been
able to cause huge levels of uncertainty in business operations of different organizations. The
changes which can take place in the exchange based rates in the country are able to influence
the revenues and levels of profitability of Primark Fashion (Sanchez and Hang 2017).
Social factors – The socio-cultural trends have also started changing as the clothing
retailers have started facing the effects of the rise in obesity and the ageing population in the
United Kingdom. The new name which has been given to the United Kingdom is the “fat
man of Europe” where almost 7 out of the 19 total British men and the around 6 out of the 10
women are overweight and obese in nature. This has been able to affect the fashion related
choices of people of the United Kingdom. The female customers tend to avoid shopping from
some of the retailers due to the demand of plus size based clothes (Shah et al. 2015). Primark
has made huge amounts of profit due to the demands of plus size based clothes. The company

10STRATEGIC MANAGEMENT ANALYSIS OF PRIMARK
is thereby able to cater to the specific needs of these consumers with the help of their
products. The obese population of the United Kingdom is thereby expected to grow further
by the year 2050. According to information that has been provided by the Office for National
Statistics, the labour dynamics and the population of the UK has been affected in a huge
manner by the rise in levels of ageing population (Simon, Fischbach and Schoder 2014). This
growth has affected the rise in the revenues of competitors of Primark like, Topshop and Zara
in an adverse manner. On the other hand, this has been effective for increasing the
profitability levels of Primark.
Technological factors – The high levels of development that has been seen in the e-
commerce based activities of the consumers has been able to provide huge competition to the
traditional brick and motor based business. The clothing retail based sector of the United
Kingdom is thereby affected in a huge manner by the levels of usage of technologies by the
consumers. The organizations like, Asos, Boohoo and Amazon have gained a lot from the
usage of technology by the consumers (Somsuk and Laosirihongthong 2014). The
competitive space in the country is thereby being opened in an effective manner with the help
of different distribution based channels. The lack of effective presence of Primark in the
ecommerce based industry is a significant factor which is able to affect the loss of sales. The
technological developments in the retail industry is thereby important for the company to
operate in an effective manner and increase its future revenues as well (Steinbach et al.
2017).
Legal factors – The developments that have been noticed recently in the regulations
and laws of clothing retail based industry of the United Kingdom is able to affect Primark
Fashion. The organization thereby needs to comply with the policies and regulations in an
effective way. Primark Fashion thereby needs to contribute 3% of the total revenues to
workplace pension based expenses of the employees (Trigeorgis and Reuer 2017).

11STRATEGIC MANAGEMENT ANALYSIS OF PRIMARK
Environmental factors – The recent environmental trends are able to influence the
methods by which organizations are able to operate effectively. The ethical operations of the
organizations in clothing retail based industry is thereby able to play a major part in the
success and sustainability. The different practices that are thereby being undertaken by the
companies mainly include, packaging based on paper, sustainable lines of clothing and the
clothing based on the environment friendly materials (Wheelen et al. 2017). The retailers
thereby need to face huge levels of pressure from the government which demands the proper
disposal of waste by the companies. Primark thereby needs to maintain its operations in such
a manner which will play a major role in the ways by the company maintain its sustainability
(Worthington and Britton 2014).
Internal and external analysis of Primark
The internal environment of Primark can be examined with the help of SWOT
framework which provides an effective picture of the different factors that are able to affect
the processes of the company. The decision making based capabilities of the company are
thereby affected in a huge way by the internal factors of the company.
Strengths – Primark has been able to enjoy huge levels of success within the past two
years due to the value proposition based on its low prices. The type of products that are
offered by the company to its customers can be named as disposable fashion (Palmer and
Hartley 2011). This factor has thereby attracted many customers after the financial crisis had
taken place and recession had occurred in the country. The consumers of the organization had
increased effectively due to the low prices of products. The growth of revenues and
profitability had increased after the year 2007 (Simon, Fischbach and Schoder 2014). The
core strength of the company is based on the cheap clothes that are offered to the consumers.

12STRATEGIC MANAGEMENT ANALYSIS OF PRIMARK
Primark had also developed a position of the third biggest clothing based organization in the
United Kingdom.
Weaknesses – The most significant weakness of the company is the perception of the
consumers which is unethical in nature. The realisation of public based on the adverse effects
of fast fashion based activities after the fashion disasters that had taken place in different
production areas of the company in developing countries. The disasters had led to the death
of more than 1000 workers of the organization (Michael, Storey and Thomas 2017). Another
major perception of the consumers related to the company is based on the production of low
cost fashion based products that cannot be considered to be trendsetting in nature. This had
led to the loss of the young consumers who mainly expect trendy products. The over reliance
of the company on the market of the United Kingdom is a major weakness of Primark based
on its operations in the industry. The lack of the online presence of the company can also be
considered to be a weakness based on the rise of usage of technology in the country
(Morschett, Schramm-Klein and Zentes 2015).
Opportunities – The rise in the levels of obesity have been able to increase the sales
and the revenues of Primark Fashion in the United Kingdom. More than half of the total
population in the country is expected to become obese by the year 2050. The retailer has
thereby started making effective investments in the plus size based clothing ranges. The
expansion that has been made by Primark into the US market has been able to affect revenues
of the company in a positive manner (Michael, Storey and Thomas 2017). The opening up of
new stores in the US has been an important part of the soaring revenues of Primark Fashions.
Threats – The Brexit related process is an important part of the threat that is posed
towards the effective operations of Primark Fashion. The parent company of Primark named
ABF has shown huge levels of concern based on the decision that has been taken by the

13STRATEGIC MANAGEMENT ANALYSIS OF PRIMARK
company to leave the European Union in the year 2016. The parent organization has thereby
noted that the implementation of Brexit has been able to pose a threat on the operations and
revenues of the company (Shah et al. 2015). The changes which can take place in the policies
and trade based regulations are considered to be a significant factor which is able to influence
the operations of the firm. The profit based margins of the company has thereby been affected
in a negative way by the changes that have taken place in the United Kingdom after the
Brexit process (Worthington and Britton 2014).
Relation of the strengths and weaknesses with external macro factors
As discussed by Merigó (2015), the external environment based factors in the United
Kingdom are able to affect the levels of profitability of the company. Primark Fashion and its
operations will be affected and the profit margins can be reduced. Brexit can have huge
amounts of negative effects on the operating processes of Primark Fashion. The internal
strengths and the weaknesses on the other hand will play a key part in the methods by which
the company is able to face the issues that can occur in the fashion retail based industry of the
United Kingdom. The opportunities and the threats which are a part of the internal
environment are also important for its operations in the country.
As discussed by James (2016), the macro environment based factors are thereby able
to influence the profitability and revenues of Primark in an adverse way. The external and the
internal factors of the company are thereby linked in an effective way and they are able to
affect the ways by which Primark operates and further maintains its levels of profitability as
well. The analysis of the internal and factors and further linking them with the external
factors are able to affect the revenues and the profitability of Primark. The internal
opportunities and strengths are based on the environment which is provided by the social and
the technological environment of the United Kingdom. On the other hand, the internal threats

14STRATEGIC MANAGEMENT ANALYSIS OF PRIMARK
and weaknesses are also based on the political and economic environment that has been
developed in the United Kingdom.
Conclusion
The essay can be concluded by stating that the internal and the external factors of the
organization are related to each other in an effective manner. The SWOT based analysis of
Primark has been able to depict the different internal aspects of the firm. On the other hand,
the PESTLE framework based analysis is based on the external aspects that are able to affect
the processes of Primark Fashion in the United Kingdom. The analysis has been able to show
that these factors are totally related to each other.

15STRATEGIC MANAGEMENT ANALYSIS OF PRIMARK
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